Bitcoin and other cryptocurrencies have been on the news lately, and everybody wishes they get money to buy and sell. What actually is cryptocurrency? How does it work? Will it replace dollars?
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Bitcoin and other cryptocurrencies have been on the news lately, and everybody wishes they get money to buy and sell. What actually is cryptocurrency? How does it work? Will it replace dollars?
Great question! Put simply, cryptocurrencies are digital money that can’t be seen or touched but have certain value attached to them. They are supported by blockchain technology which relies on a network of computers to keep track of transactions rather than on a centralized authority like a bank. No, they won’t replace the dollar.
Cryptos can be likened to Gold and Silver. They are more of a store of value and can be converted to real money through an exchange platform. The value fluctuates
Cryptos emerged in an attempt to decentralize financial transactions following the 2008/2009 financial crisis. The idea was to put the power in the hands of people and reduce dependency on banks and governments. The early creators argued that governments print as much fiat currency as they want which has or will reduce its value over time. This is why a cap was put on crypto coins. For example, there are only 21 million Bitcoins in the world.
Cryptos can’t replace the dollar
The crypto market operates like the stock market. The market is young and more volatile than any other financial market. It certainly won’t replace the dollar
Cryptocurrencies make it easier to transfer funds directly between two parties, without the need for a bank or credit card company. The transfers are secured by the use of public keys and private keys and different forms of incentive systems, like Proof of Work or Proof of Stake.
The first blockchain-based cryptocurrency was Bitcoin, which still remains the most popular and most valuable.
To access the bitcoin wallet address, one needs a password. After 10 failed attempts, the password will encrypt itself, making the wallet impossible to access. No one can assist you with unlocking or finding your password after the 10 failed attempts. This is one of the downsides of it.
I really learned few things from here. Thank y’all