Cryptocurrency is ruling the investment market and one must be living under a rock who doesn’t know about how cryptocurrency skyrocketed the whole investment gains! But like every coin has two sides, one should be aware of the downside of this new investment avenue! Before knowing about the cryptocurrency game let’s first know about the concept.
The realm of cryptocurrency is valued at £2 trillion. Cryptocurrency is a form of digital currency and is like a collection of binary data which works on the model of cryptography and blockchain, where the data is converted into codes and is used as a medium of exchange, cryptocurrency is treated as a real currency like that of dollars and pounds. It is having been the talk of the town where even celebrities and famous entrepreneurs are talking about it.
Many reputed companies have also started accepting cryptocurrency as a means of payment. You can buy a car or a house through it, but it is upon the discretion of the seller to accept it as a means of payment. Even though how attractive they may look one major thing about cryptocurrencies is that they operate via ‘decentralised control’ which means they aren’t regulated by the government or the bank. Therefore, there is a low legal influence which leaves speculation in the minds of the investors.
Some famous cryptocurrencies are Bitcoin, Ethereum, Dogecoin, etc. The model of cryptography secures the transactions and control additional unit of this intangible currency. Crypto assets are in the form of coins and tokens, where coins have their blockchain network whereas tokens work on existing blockchains.
The transactions via cryptocurrency are stored in a public ledger and require miners’ confirmation for it to be valid and once the transaction is completed it is permanently recorded in the blockchain for everyone to see.
Crypto Mining –
Crypto mining involves getting the crypto assets to circulate by solving complex mathematical equations. Anyone who has a computer and a considerable amount of hardware like asic or application-specific integrated circuits can be used to mine cryptocurrency. As your computer Solves these equations, it gets you to earn a token of the cryptocurrency, and the more money you spend on the hardware, the more efficient the mining process will be which in turn means you can get more tokens!
What attracts people to invest in cryptocurrency is that it is decentralized, and anyone can invest in it. Although some sites have a legal requirement for miners to be of age 18+ like Paypal and Coinbase.There are sites like Purse.io has no compulsion for miners to be 18+.
The concept of scarce resources comes into place as more and more people are indulging in crypto mining the less likely are the chances to get the tokens. But because cryptocurrency requires a huge amount of energy to keep the blockchain running it has detrimental effects on the environment as people are using high-powered hardware to mine and as a result, CO2 emissions are increased. Therefore, one must think about every aspect associated with cryptocurrency as they have been presented as clickbait ads and can lure people to invest and without proper knowledge, one can get into financial ruin. So, know more and invest more!