I can guarantee you’ve heard or read the word “Bitcoin” or “Crypto” at least twice today. The concept of blockchain and cryptocurrency is becoming increasingly popular. It has the power to disrupt financial markets and invoke a financial revolution. Therefore, it’s all the more important to familiarize ourselves with the Crypto world if we don’t want to end up not knowing what the conversation on the group chat is about. After this article, you’ll not only have a basic understanding of what crypto is but also have the necessary information to set up an account to start trading some yourself!
To understand what exactly cryptocurrency is, let’s take an example. Suppose you’re studying at a college in the US. You , like any other college student, spend your money on things you should not spend your money on and are running out of funds to buy the things you need. So naturally, you ask your family back in India for some good ol’ pocket money. In order for this transaction to take place, you are entirely dependent on a bank. Being the conniving middlemen they are, a substantial percentage of the principal amount goes towards remittance(and other hidden) fees and even loses value because of the INR to USD conversion rate.Because of the logistics involved, it might take at least a couple days for the money to reach you.
Cryptocurrency solves all these problems. For starters, it eliminates the need for a bank or any other third party. This is possible because the entire concept of cryptocurrency is based on the fact that you can send currency directly to your peers. There is minimal fee involved, and transactions happen at the blink of an eye. There is no scope for malpractice as every single transaction is permanently stored on a digital ledger called the blockchain.
While Bitcoin(BTC) and cryptocurrency are used interchangeably, this is not the case. Bitcoin is a type of cryptocurrency. It is considered the first by many investors and was founded by someone under the pseudonym “Satoshi Nakomoto”. It is built on a technology called the blockchain and its primary objective is to eliminate the need for third parties during financial transactions. Cryptocurrencies apart from BTC are called “alt coins” and they all have their very own blockchains. Another example of a well established cryptocurrency is Ether(eum). It works off a blockchain called Ethereum.
Now that we know the basics and have established that cryptocurrency is the future of finance, you’re probably wondering how to make the most out of it. The process of trading cryptocurrency is comparatively easier than investing in the stock market. All you need to do is identify a major trustworthy trading platform to open a trading account with.Some trustworthy platforms include WazirX, Binance,Coinbase etc. The platform will ask you to fill in a couple of details(like your PAN,Aadhar etc) in order to verify your KYC. Adopt a trading strategy that works best for you and start buying and selling! Since crypto is extremely volatile, it is subject to high risk so due diligence is a must before you choose to invest your money.
Blockchain and Cryptocurrency have an unbelievable number of practical use cases. If used correctly, they have the power to solve pressing issues that need urgent attention. It won’t come as a surprise if they end up revolutionizing the world.