When we hear about cryptocurrency from anyone the first thing that comes to our mind is Bitcoin, and that is not completely wrong as cryptocurrency is far more a wider concept than just a Bitcoin. So let me explain cryptocurrency meaning to you in a simple language.
Cryptocurrency is a part of Blockchain technology, which is transacted using this technology. Cryptocurrency is also called as Digital Money in the world of investment, meaning this currency is available online.
The Blockchain technology is such developed on the principles of lopsided cryptography, thus the currency that is transacted through this mode of exchange is called as cryptocurrency.
This currency is a decentralized currency which is not controlled by any beaurocracy, hence the transactions are done directly from one person to another and it is not monitored by any country’s government or banks.
Hence today we will discuss about the cryptocurrency & meaning of it, because it the hot topic bragged out in the market now-a-days good and bad, so you can understand cryptocurrency more accurately and also educated others about it.
What is cryptocurrency?
Cryptocurrency is concept which came into existence in 2009 invented by a pseudonym Satoshi Nakamoto, which was Bitcoin the first cypto and it has become popular over the years. It also is the most liked and traded cryptocurrency around the world.
The ultimate goal of inventing such type of currency was to develop an independent mode of currency exchange, which is not controlled by any banks or central authority for any whatsoever purpose, but still should be secure, certain and rigid.
For instance: Like we hear about banks facing losses due to poor corporate governance by the banks, in such cases other account holders of the banks have to face issues with banking activities. So the cryptocurrencies will not to have to deal with these issues.
It is transacted using the Electronic system via internet peer-to-peer transfer without any authority needed to authenticate the transaction. It is considered to be a value to be paid against any purchase or sale, just as we use a legal tender authorised by the central authority.
Unlike Gold, Liquid currency such as INR, USD, EURO, etc. which is regulated by the governments of various countries, crypto currency is not physically accessed by the people or nation’s central authority.
The market has already on a large scale termed cryptocurrency as an asset like others such as real estate, digital gold or even similar to commodity. People know Bitcoin as the only cryptocurrency which is available in the market, and due to it is highly priced they restrict themselves from knowing more about the concept.
There are more than 10000 types of cryptocurrencies in the world market, but only a few are significant and trusted by the millions of investors around the world. There are many other crypto currencies in the market other than Bitcoin, so we will explore more of these crypto currency further.
Different cryptos or altcoins have newer features and work on different algorithms than Bitcoin, various cryptocurrencies have improved speeds of transactions. Some of the latest cryptos have also developed ability to handle more data in a single block which is bigger than the block size of Bitcoin.
Hope so till now you must have got an idea what a cryptocurrency is and the where did it come from!
Bitcoin is well-known cryptocurrency in the entire world, and also majority of the people know the success of BTC and what is it’s market position right now. This article is not about Bitcoin(BTC) but other cryptos.
So now let’s discuss the various other cryptocurrencies in which you can invest if you are looking forward to:
This is also a decentralized blockchain software which was launched in 2014 by Vitalik Buterin. “Ether” is the system currency like Bitcoin which is run without any interference or control by third party. Ethereum is little less popular than Bitcoin but still stands first after Bitcoin in the crypto market.
This is a decentralized computing platform, which allows its users to generate digital tokens which can be used as currency for exchange of NFTs(Non Fungible Tokens) other financial commodities that can be freely accessed by anyone in the world irrespective of nationality, class, power or position. The Ethereum Virtual Machine can run codes and decentralized applications, initially the blockchain delivered 72 million Ether coins when it started.
In 2016, at the DAO(Decentralized Autonomous Organisation) event, Ether currency worth $50 million was robbed, by an unknown hacker hacking the database, hence the Ethereum blockchain system was hard forked to reverse the theft and came out with Ehereum Classic(ETC) to be the original chain.
Currently Ether does not have any kind of cap over its coins supply, unlike the Bitcoin which is caped to a fix supply upto 21 millions as of now. The current market valuation of Ethereum in August 2021 is $289,577,813,635 USD, crypto market rank #2 market dominance of 19% initially in 2021, with 115,630,493 ETH coins in circulating supply.
The Ethereum is looking forward to diverse its algorithm to proof-of-stake, which will enable an improved speed of transaction along with a less energy consumption. The users can stake their Ether in the network with a reward of Ether addition to their accounts.
2. Bitcoin Cash(BCH):
Bitcoin cash is an successor altcoin of the original Bitcoin, which was created in August 2017. Bitcoin Cash is generated faster in the blockchain, faster than Bitcoin(BTC) with lesser energy.
BCH coin can be mined within 10 mins per coin, even when there are multiple number of miners using ASIC. This is a peer-to-peer electronic cash which can be traded anywhere, anytime globally without being restricted by any authorised government.
In 2018 Bitcoin Cash was split, into 2 cryptos Fork, Botcoin Cash and Btcoin SV, again in 2020 Bitcoin Cash was further split in to 2 cryptocurrencies Botcoin cash and Bitcoin ABC. The primary reason for division of Bitcoin cash into multiple blocks is the scalability of the currency.
The BCH increased the size of the block in the blockchain system, form the standard 1mb block to 8mb block, with the scope that larger blocks can hold more transactions making transactions faster.
“Bitcoin Cash(BCH) is like modern Microsoft, which creates documents which cannot be accessed using the older versions”, this was reported by Hong Kong newspaper.
The current market valuation of BCH in August 2021 is $ 19 068 672 124 USD, crypto market rank #11 market dominance of 0.84% initially in 2021. The total coin supply as declared is caped to 21,000,000 BCH coins with 18,726,794 BCH coins in circulating supply.
3. Binance Coin(BNB):
Binance is decentralized cryptocurrency coin, which can be used for trading and payment of fees on the Binance exchange. BNB coins can also be used for exchanging or trading other cryptocurrencies like Botcoin, Ethereum, etc. and the traders on BNB get an incentivised discount for payments made via BNB.
Binance coin was introduced in July 2017 by Changpeng Zhao, initially was a part of Ethereum’s blockchain token and later on became independent crypto of the Binance’s owned blockchain. BNB initially had put out 100 million coins @15 cents per coin, raising $15 million USD in Bitcoin and Ethereum.
Binance coins can be used for investments in Stocks, MFs, ETFs and other assets on several platforms. BNB platform can also be used to pay the crypto credit bills, flights and hotels bookings can also be done, depending on the booking portal.
Binance BNB regains its binance coins consistently to burn the coins completely every quarter using 20% of its profits. This will be done until it burns upto 100 million coins, i.e 50% of it total.
Binance Coins are caped to a fix supply upto 200millions as of now. The current market valuation of BNB in August 2021 is $85,780,117,651 USD, crypto market rank #3 market dominance of 4.11% % initially in 2021, with 153,432,897 BNB coins in circulating supply.
This is another cryptocurrency like Bitcoin private, secure and decentralized, open-source functions on CryptoNote software system protocol. Monero was discovered in April 2014, since then it is in operation and has gained a good success in the crypto market.
Monero(XMR) is a community donation based currency, which can be transacted between anyone within the community with a special technique of ring signature. It is a befog ledger which cannot be influenced by any outside source or destination.
Monero works on private secured improving technology to meet incognizance and commutability, which attracts the miners by rewarding with coins in return for maintaining a safe and valid transactions.
The privacy and smooth trading feature of Monero, gained it a rapid growth in the market and in terms of transactions volume in past few years. In January 2017, Monero became more secure crypto in terms of tranasctions privacy with its RingCTs algorithm update by Bitcoin’s core security developer Gregory Maxwell.
The drawback of its private fundamentals is the currency was involved in a multiple criminal operations around the world. In October 2018, bulletproof protocol was implemented by Monero, to reduce the size of the transactions verifications and lower the cost.
Monero(XMR) coins are not caped to any market supply as of now. The current market valuation of in August 2021 is $7 178 056 076 USD, crypto market rank #22, market dominance of 0.31% % initially in 2021, with 17,902,191 XMR coins in circulating supply.
This was the first cryptocurrency which was known as Silver coin of the Bitcoin’s gold coin, meaning Bitcoin was considered to be a digital gold and Litecoin to be as digital silver. Litecoin(LTC) was launched in October 7, 2011 following the footsteps of Bitcoin by Charlie Lee, an ex employee of Google, later Director of Engineering of Coinbase.
Litecoin is also a peer-to-peer crypto currency controlled by open source software under MIT/X11, which functions on scrypt as the algorithm. This is a decentralized currency uncontrolled by any Authority or Central system.
This crypto works on the source code fork that of a Bitcoin in the many terms but is generated more faster than a Bitcoin @2.5 mins/LTC, on the blockchain offering faster transactions from peer-to-peer. Litecoins are capable to be generated at the consumer grade computing systems, thus consuming less energy.
By 2017 LTC became one of the Top 5 market cap cryptocurrencies and as of August 2021 the market valuation of LTC is $600 billion usd, crypto market rank #9, market cap of 0.84% initially in 2021, maximum 84 million LTC will be in circulation.
This is a peer-to-peer decentralized and open source transactions platform for it internal cryptocurrency ADA, which was developed with an harmony of proof of stake. Cardano was established in 2015, by experts of cryptography and Charles Hoskinson, co-founder of Ethereum.
After disagreements with Buterin’ in terms of enhancing of Ethereum to a profit making entity, but Buterin still wanted it to be a non-profit organisation, Hoskinson aparted from ETH and contributed in the development of Cardano.
Cardano does not work on White Paper, unlike other crypto currency to avoid limitations in scalability, regulation compliance. Cardano functions on Ouroboros proof-of-stake technology, which is different from Botcoin’s proof of work, and is addressed by its users as first and longest honest (computing power)blockchain.
The ADA is the primary settlement layer which tracks the transactions of the coins, just as Bitcoin, the secondary layer is a computing layer similar to Ethereum, which can be used as smart contracts and applications to compute by miners.
Cardano aims to become financial operation system to the world in decentralized finance commodities, legal operational contracts, tracing ethical tenders which could be advanced than Ethereum’s functionality.
By 2021 ADA has become one of the Top 10 market cap cryptocurrencies and as of August 2021 the market valuation of ADA is $41,515,626,260 usd, crypto market rank #7 market cap of 1.89% initially in 2021, maximum 45bn Cardano ADA will be in circulation with 31,948,309,441 ADA coins currently in circulating supply.
Dogecoin was invented as a fun of creating payment system which would be decentralised and free from any restrictions and banking fees, mimicking Bitcoin transaction systems. Later on it developed as a well-known cryptocurrency due to its “Doge” meme which is the face of Shiba Inu.
Dogecoin was developed by two engineers Billy Markus and Jackson Palmer software engineer from IBM and Adobe respectively in December 2013. It got its name from the face of the Doge meme logo, which also gave the cryptocurrency a popular market fame, and came to be known as meme coin.
In 2014 January Dogecoin experienced a boost in trading volume which surpassed Bitcoin and other cryptocurrencies combined. Dogecoin has been performing consistently past few years with a high increase in market price.
World’s richest man “Elon Musk” also supports Dogcoin, as he announces of buying of Dogecoin for his son Lil X, through a tweet. Inspired by his tweet, a 33 year old from Los Angeles invested in Dogecoin($0.045), which made him millionare in 2 months.
Dogecoins are not caped to a any maximum supply as of now. The current market valuation of Doge in August 2021 is $87,869,319,048 USD, crypto market rank #4 initially in 2021, with 129,461,434,269 Doge in circulating supply.
Polkadot is disparate translation architecture of cryptocurrency which is designed to operate in to internally as well as other blockchains. It works on proof of stake protocol which performs with external blockchain system under a single roof.
Polkadot is developed as a decentralized system of web, for building its own blockchain and also handle the operations of other blockchain’s native tokens for certain usage under shared security.
Polkadot was co-founded by Gavin Wood in November 2016, a co-founder and developer of Ethereum and Ethereum 2.0. Gavin worked on the Polkadot for about four months from the ideaology to the White Paper, of the multi-chain framework protocol.
The current market valuation of Polkadot in August 2021 is $33 525 468 516 USD, crypto market rank #8, market cap of 1.52% initially in 2021, with 935,027,048 Dot in circulating supply.
Maker is a unique decentralized stablecoin cryptocurrency, which was developed on Ethereum blockchain, in December 2017. The protocol was organised by an automated system of smart contracts, that the price of the DAI was kept similar to 1 USD.
The cost of ETH at the launch of MKR has declined 80%, but still the Maker(DAI) was somehow stable along with the USD. DAI is regulated by MakerDAO(Decentralized Autonomous Organization).
To obtain a newly generated MKR, the user can deposit ETH or any other cryptocurrency and obtain MKR up to the value of their deposits. The current ratio of ETH is equilibrium to 150%, i.e against $150 ETH you can obtain approx. 100 DAI coins. MakerDAO and DAI together were considered to be the first examples to be treated as dencentralized finance systems.
MKR can be locked up as a deposit just as cash deposits, using smart contracts of MakerDAO and interest can generated in return during the lock-in period. The purchase new DAI user has to make a deposit of Ether and get MKR, repay the MKR loan with 0.5% interest p.a and obtain your Ether deposit back.
The current market valuation of in August 2021 is $ 5 376 857 395 USD, crypto market rank #27, market dominance of 0.24% initially in 2021, with 995,239 MKR coins in circulating supply, the total supply of MKR is set to 1,005,577.
10. Bitcoin SV(BSV):
Bitcoin SV which is also known as Bitcoin Satoshi Vision, is hard fork from Bitcoin Cash(BCH). The idea of splitting BSV was to get an increased scalability and block size(128mb) of the currency, as compared to that of BCH which is 8mb.
This idea of getting BSV was of Craig Wright, which he announced that his cryptocurrency is real and reliable. The introduction of BSV was aimed at increasing speed of transactions with reduce cost.
BitcoinSV is a decentralized digital currency which can be easily traded online for purchase of commodity or exchange of currency in a superfast medium anytime without any banking fees or waiting period.
Bitcoin has become a well-known name in the market of cryptocurrency and is trusted and accept by major industries as a value for exchange, just as a legal tender(currency) is used.
BitcoinSV are in to existence since 2018 and have a current market valuation of $7,748,720,915 USD in August 2021 with 0.33% of market dominance. The, crypto market rank #24 initially in 2021, with 18,724,877 BSV currently in circulation, maximised to 21,000,000.
Cryptocurrency updates 2021
Facebook to comeup with a new cryptocurrency amid the falling situation of Bitcoin and Dogecoin. FB had earlier announced the launch of its crypto to be named as Libra, in 2019 but now the name has been changed to Diem.
CEO and Co-founder Mark Zuckerberg announces the idea and hopes that the cryptocurrency that FB was backing since last 2 years will now launch in 2021.
Facebook’s crypto is different from that of the famous cryptocurrency Bitcoin, meaning Diem will be monitored by central organization and it will also be backed by Fiat currency.
There will be a digital wallet named as Novi, which will be ideal for storing the cryptos safe by the users.
What are the benefits of Cryptocurrency?
- Cryptocurrency is a secured medium of currency exchange which is completely a digital algorithmic based program, hence there are very less chances of human errors.
- There are very less to no chances of any fraud play in cryptocurrency transaction, since everything is secured and not exposed to a third party.
- The transactions happen from peer-to-peer without letting any outsider know about it like banks.
- The transactions charges in cryptos are very less as compared to other payments options that we use because there is no extra charge to be paid like taxes of maintenance charges.
- The financial history is more private than that of banks, hence assets, commodities or borrowings can be done more easily regardless of the credit history one holds.
- Cryptocurrencies are unaffected by the market inflation. The price of a crypto depends on the demand for the coin, irrespective of rates of commodities in the market.
Disadvantages of Cryptocurrencies
- There is no control over transactions in cryptocurrency, hence a wrong transaction done cannot be reversed by any means. Once done transaction is done permanently as it is not monitored by any authority.
- There is no market volatility of cryptocurrency, the price can fluctuate multiple times in no time and unpredictably. This type of inconsistent market is risky for an amateur trader.
- This can be a medium for criminal activities as it is an end to end transaction and no third party is monitoring it, there are chances of illegal transact activity dealings to happen using this platform.
- There is no recovery or authentication of lost funds, once if you have lost the wallet id of your crypto, it cannot be recovered. This may cause you to lose your cryptos forever.
- Now there are platforms, which handle all your crypto funds and transactions with a password protected authentication after your KYC is done, one example of such is CoinDcx Go.
- It is recommended to keep your funds with such platforms rather than keeping them in crypto wallets with a fear of losing your password or getting hacked.
What is the future of cryptocurrency in India?
The apex court of India in March 2020, has not said crypto to be illegal, it has restricted India’s financial institutes and banks from dealing in cryptocurrencies and has asked the government in making laws regarding crypto trading in India. This also doesn’t means that crypto is a legal tender in India.
Many developed countries around the world have legalised crypto exchange, because they are convinced by the facts that crypto has some element as a currency. Most companies have also started accepting cryptocurrencies for selling their commodities, great example of such a company is Tesla.
Looking at the move of the developed countries around the world, India would not want to be left behind from the opportunity of getting into such a growing market which may even contribute in the development of the nation and may reach to a conclusion of regulating it. We hope so.
In India there are more than 10 million investors in various cryptocurrencies including Bitcoin, so even if the government of India completely bans the usage of cryptos, it cannot be decided as illegal. The government may define a duration for people holding cryptos to sell their holdings if desired, to the global market.
This is a complete personal analysis for information purpose and not from source of legal authority.
In the above article I have tried to give you complete information about cryptocurrency, meaning of it, how did it come into existence purpose of inventing crypto and its current market situation as detailed as possible.
Hope you liked reading the above post, if you liked the post do comment your thoughts and questions and also share it with you friends and relatives, to give them the knowledge about this topic and there can be awareness among us.