20 Facts About Cryptocurrency That A New Investor Should Know

1. Cryptocurrency is a virtual currency and does not exist in physical form.
2. It is a collection of binary data to be used as a medium of exchange, wherein individual coin ownership records are stored in a ledger, keeping a track of units and their ownership.
3. It is secured by cryptography, hence the word ‘crypto’ currency.
4. Cryptocurrency does not require a central authority and are hence immune to government interference.
5. Each cryptocurrency works through decentralized networks/ blockchain, that serves as a public financial transaction database.
6. These were formed to ease financial transactions/ fund transfers using public and private keys, without the need for a third party like a bank. The owner has a private key while public key is open to all who would like to own the currency. It is important to properly safeguard/ backup the private key to ensure the safety of cryptocurrency else balance can be wiped out by destruction of the hard drive. Also, read How Cryptocurrency Trading Robots Work
7. It involves minimum processing fees.
8. Cryptocurrency has a history dating back to the 1980s but the popular Bitcoin the first blockchain-based cryptocurrency) was launched in 2009.
9. El Salvador became the first country to accept Bitcoin as legal tender, followed by Cuba.
10. China is the largest market for cryptocurrency. However, cryptocurrency transactions are considered illegal there.
11. If two different instructions for changing the ownership of the same cryptocurrency are entered together, it performs only one of them.
12. Given, their easy ownership and no government interference, cryptocurrency are being increasingly used for illegal activities, tax evasion, money laundering, exchange rate volatility, etc. A cryptocurrency is susceptible to online theft as hackers are always in the look-out to crack the network system.
13. Once you buy a cryptocurrency you can store it on an exchange or in a digital wallet.
14. Tranparency and inflation resistance are a few of its pros.
15. One can easily buy goods and services, or trade them for profit. All you need is the app and a digital wallet to hold the money.
16. Many investors regard them as speculative.
17. There are numerous cryptocurrencies with various functions and specifications at present.
18. It is estimated that there are over 18 million bitcoins in the market at present.
19. Some of the other popular ones include Litecoin, Peercoin, and Namecoin, as well as Ethereum, Cardano, and EOS.
20. The IRS has declared cryptocurrency as an asset/ property and the U.S. Department of the Treasury proposed to report any cryptocurrency transaction of $10,000 to the IRS in May’21.

Also, read Should I Buy DOT Cryptocurrency?