Investments in cryptocurrencies in India and around the world hit new heights in 2021 after the market spiked in the first four months. As the value of cryptocurrencies like Bitcoin and Dogecoin set new records, interest in them also increased. Then came the fall. After falling in May, digital currencies lost most of their profits, but while some investors lost their money, others who got in early also made huge profits, and interest has only increased since then.
The cryptocurrency has aroused great curiosity with more and more people getting involved in trading this new digital asset, however the high volatility in the cryptocurrency market means that you should do your own research before investing in Dogecoin or other popular currencies . Bitcoin price in India was Rs. 29.7 lakhs, while Ethereum price in India was Rs. 1.8 lakhs and Dogecoin price in India was Rs. 15 on July 30th at 9:30 am IST . To help you de-jargonise cryptocurrencies and understand the cryptocurrency market, here is everything you need to know.
What Is Cryptocurrency?
Cryptocurrency, often also called crypto, is very simply digital money and not “fiat” or a currency issued by the government. In contrast to traditional money, which is based on a centralized distribution, the cryptocurrency is managed by what is known as a distributed ledger. This offers a high degree of transparency, but also anonymity through the use of encryption.
Initially there were some doubts about the value of the cryptocurrency and one of the early users spent 10,000 Bitcoin to buy two pizzas, which in hindsight made them the most expensive pieces of all time. Many companies have also started adopting cryptocurrency as a payment . to benefit from the growing user base. Some have even issued their own coins, often called tokens, to trade in goods and services specifically offered by them.
The Most Popular Cryptocurrencies?
The top 5 cryptocurrencies by market capitalization are: Bitcoin; Ether; Tether; Binance coin; and Cardano. Of these, Bitcoin is the oldest. It was published in 2009, shortly after the economic downturn, by an anonymous person using the pseudonym Satoshi Nakamoto.
Another popular coin that isn’t in the top 5 now is Dogecoin, which was introduced as a meme coin in 2013 to poke fun at Bitcoin and gained a following after being endorsed by billionaire businessman Elon Musk earlier this year .
Are They Legal?
Many countries have started to support cryptocurrencies, but in many cases there is still no formal regulation for cryptocurrencies. In India, there was initially talk of bans, but although the Reserve Bank of India (RBI) restricted trading in cryptocurrencies in 2018, the Supreme Court overturned the RBI’s order last year. The RBI has now also announced that it is in the process of gradually launching its own cryptocurrency on the market.
Why Is Cryptocurrency So Popular?
There are a number of reasons for this, the most prominent of which seems to be the value proposition. Many people are now spending real money buying Bitcoin in the hopes that it will generate good returns at a later date when demand increases. Musk even said that these coins could be the currency of the future, but didn’t say what it will be or whether there will be more than one global cryptocurrency.
What Is Mining In Cryptocurrency?
The term crypto mining means obtaining digital currencies by solving complex cryptographic equations using sophisticated computers. This is the process by which new currencies are generated, although many people who trade cryptocurrencies do so with existing tokens and not mine them directly.
Where Are Cryptocurrencies Traded?
According to CoinMarketCap, a market research website, more than 11,000 cryptocurrencies are publicly traded on dedicated exchanges worldwide. It sets the total value of all cryptocurrencies in circulation as of July 29th at more than 1.5 trillion US dollars (approx. 1.11.50.625 billion rupees).
Cryptocurrencies are mainly traded on exchanges, but there are also other offline transfer options, through paper wallets and it is also possible to exchange your tokens directly, although it is safer for private investors to stick to an exchange.
