What is Cryptocurrency, the future and benefits of it?

What is cryptocurrency?

What is cryptocurrency? A cryptocurrency is a digital asset or currency, that  is an alternative way of borderless payment created using cryptography algorithms. The use of encrypted technologies means that cryptocurrencies function both as a currency and as a virtual asset.

To use cryptocurrencies, you need a cryptocurrency wallet like Metamask, Trust wallet etc.  Or exchange Binance, OKC, Kucoin etc. This wallets/exchange can be software that is a cloud-based system or is stored on your computer or on your mobile device. The wallets are the tool through which you store your encrypted keys phrases that confirm your identity and link to your assets.

your encrypted keys phrases that confirm your identity and link to your assets.

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What are the benefits of cryptocurrency?

·        Security:- No one can access your wallet unless you give someone access to your private keys for your wallet. However, if you lose your private keys there is no way you can recover your funds.

·        Privacy:- since you did not register like tradition financial institution with documents and paperwork, you can maintain transaction level of privacy. On the transaction there is identifier on the blockchain your wallet address but it did not include personal information about you.

·        Transparency:- All transaction take place is publicly distributed blockchain ledger. You can check any transaction on blockchain explorer. You can see transaction amount from wallet address to wallet address, anyone can see the amount of crypto stored in a wallet but there is no personal information.

·        Accessibility:- anyone can use cryptocurrency, all needed is smartphone or computer with network connection. The opening of cryptocurrency wallet is very simple compared to opening of bank account at a traditional financial institution.

·        Transaction fee:- transaction fee is relatively low using cryptocurrency compared to the financial service (Bank, wires).

·        Transaction Speed:- you can send a money all over the world with high speed with cryptocurrency in a minutes once the blocks verify your transactions rather than using bank that will tale 2-7 days.

·        Inflation Protection:- people se Bitcoin and other cryptocurrencies as offering protection against inflation.  Bitcoin has a had cap on the total number of supply that will ever be minted. The price of Bitcoin ought to increase. But paper notes has no maximum supplies.

·        Decentralization:- meaning it is not under control of government or financial institution.

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What are the risks of cryptocurrency?

What are the risks to behind using cryptocurrency? Cryptocurrencies are still relatively new system, the market for these digital currencies is very volatile. Since cryptocurrencies don't need banks or other third party to regulate them; they tend to be uninsured and are hard to convert into a form of tangible currency (such as NGN, US dollars or euros.) In addition, since cryptocurrencies are technology-based intangible assets, they are hardly hacked like any other intangible technology asset. Finally, since you store your cryptocurrencies in a digital wallet, if you lose your wallet private keys (wallet backups), you have lost your entire cryptocurrency funds.

          While sending Bitcoin or any other cryptocurrencies you have to be very sure and careful since if you send it to wrong wallet address you may loss the fund for ever.

Also Read: Top Ten (10) Richest Cryptocurrency Investors

Follow these tips to protect your cryptocurrencies:

Look before you leap! Before getting to invest in a crypto space, make sure you understand how it works, where it can be used, how to exchange it.

Use a trustworthy wallet or exchanges. You have to do some research on your part to choose the right wallet or exchange for your needs. If you choose to manage your cryptocurrency wallet or exchanges with a local application on your computer or smartphone device, then you will need to protect this wallet at a level consistent with your funds. Just like you wouldn't carry a millions dollars around in a paper bag walking any how, don't choose an unknown or lesser-known wallet or exchange to protect your funds. You want to make sure that you use a trustworthy wallet and exchanges.

Have a backup strategy. Think about what will happens if your computer or smartphone device or wherever you store your private keys is lost or get stolen or if you don't have access to it. Without you backup your private keys somewhere, you will have no other way of getting your cryptocurrency back to you, and you could lose your funds.

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