What is Cryptocurrency

Introduction
• We are living in a digital world where
everything is heading towards pure
digitalization. i.e.
• Most of our works are becoming paperless.
Even money transfer and investments are
paperless.
• One of such digital payment sector is
cryptocurrency.
 What is Cryptocurrency ?
• Crypto currency is a digital money or virtual money. That is money
is not available physically and it is very secure.
• In simple words we can say cryptocurrency is a money exchange
process.
• Most popular example for cryptocurrency is Bitcoin. It is the first
ever introduced cryptocurrency.
• Some other examples for cryptocurrencies are Ethereum, XRP
• It is not possible to counterfeit or double spend because it is
secured by cryptography.
• It is an decentralised process hence they are not controlled by
anyone
• Cryptocurrencies are tax free and they are not insured too.
• Government or banks are not responsible for cryptocurrency.
• Even many countries have banned cryptocurrency.
 Purpose of Cryptocurrency?
• The main purpose of cryptocurrency is to reduce
the risk involved in traditional currency.
• It is very easy to use. We can access it anywhere
and anytime. All we need is a smart phone and a
good net connection
• In cryptocurrency the power and the
responsibilities are in hands of the currency
holder.
• They help in solving real world problems.
How does a Cryptocurrency work?
• It uses block chain technology. It is a very brilliant technology
because both the buyer and seller details are viewable to each
other and so no broker is needed.
• For example if we need to buy a share from a stock market we can
do it easily with the help of a broker. We will confirm the exchange
order and then we will receive the shares. We don’t need to
contact the seller in person.
• The reason for choosing a broker is we don’t know if the seller has
the stock or not. This is known as principle of novation.
• In cryptocurrency involvement of third person is not needed
because all the transactions are stored in a common location and it
is viewable. The identity of the person who made the transaction is
encrypted.
 How cryptocurrency is made ?
• Most of the cryptocurrencies are made using a
process called mining.
• Mining is nothing but an algorithm. It is the
process of adding transaction to the blockchain
ledger.
• Via nodes on the network with the consensus
achieved through a proof of system.
• But not all cryptocurrencies are made by mining.
Some currencies are created using various other
techniques such as tokens.
 Can Cryptocurrency be converted to
cash?
• The answer for the above question is yes. For
example one of the cryptocurrency Bitcoin can
be exchange into cash on a crypto exchange.
• There are platforms such as coinbase and
kraken that helps the users to convert digital
money to physical cash.
 How safe is Cryptocurrency?
• Transactions done using cryptocurrencies are
highly secure .
• There is a chance of earning huge amount
when compared to mutual funds or share
market but it comes with a high risk.
• Because the volatility of cryptocurrency is very
high. Either we earn high return or lose what
we have.
 Is Cryptocurrency good or bad?
• Every coin has two faces, similarly there are both
good and bad about investing in cryptocurrency.
One should know both the faces before investing.
Let us consider only the good side about investing
• Returns may be massive and everything is instant.
So you can buy or sell when there is a fluctuation
in the market very easily.
• There is a cold wallet storage option where we
can control our own private key. This key helps us
to access our coin in the block chain.
 What are the problems with
Cryptocurrency?
• Major problem is cryptocurrency is the lack of
regulation.
• Next problem is volatility. For example in 2017
cryptocurrency like Bitcoin increased suddenly
upto 1000 percentage and then came down.
• Another problem is fear about hacking and
scams due to the reason of digitalisation.
 Is crypto illegal?
• It varies from one country to another. In some
countries it is legal and some countries have
banned it.
• Crypto is legal in some of the most developed
countries like U.S Japan and U.k
• It is also legal in developing country like India but
it does not have any regulatory framework .
Countries like Algeria, morocco, Nepal, Pakistan
and Vietnam have banned it. (Verify crypto news
for updated information's)
 Will banks use Cryptocurrency?
• Most are the banks are against the idea of
cryptocurrencies because it is a treat to most
of the traditional banks.
• There are also certain types of banks
supporting cryptocurrencies and investing in
it.
 What is the disadvantage of
Cryptocurrency?
• One of the biggest drawback of
cryptocurrency is the security. There are
stories where exchanges are hacked and
peoples who held coins in those exchanges
lost everything.
• There are lot of peoples with less experience
and knowledge which leads to huge loss.
• Since it is fully digitalized there is a technical
difficulty such as network issues and so on.
 Can you trust Bitcoin?
• Yes Bitcoin’s are really safe. If you are ready to
take risk and if you are ready for investing
then be ready for all kind of high and low.
• If no of Bitcoin’s available Is less and no of
bidders are very large in number the value
automatically increases.
Can you get scammed on Bitcoin?
Yes there is a chance of getting scammed on
Bitcoin’s some such scams are
• Fake ICO’S
• Social media scams
• Fraudulent exchanges
• Imposter websites
• Scamming emails
 Can a Bitcoin crash?
• Yes Bitcoin may crash. But the gains achieved
using Bitcoin are higher when compared to
the losses.
• But a Bitcoin reducing to zero is nearly
impossible.
 Why we should not use Bitcoin?
• Highly volatile
• Lack of knowledge and experience
• Unregulated space

Conclusion: Know all the ups and downs, before investing into crypto.
Thank You