A Cryptocurrency, crypto-currency, or crypto is a digital asset designed to work as a medium of exchange
Cryptocurrencies work using a technology called blockchain technology.
To understand Much more about Cryptocurrency, we need to first know how a cryptocurrency is different from a fiat currency (Indian Rupee, US Dollar, etc.). The biggest difference is that a fiat currency is backed by Governments and declared as legal tender.
Legal tender is any form of payment recognized by a government, used to pay debts or financial obligations, such as tax payments. National currencies, such as the U.S. dollar, Rupee, are legal tender.
Cryptocurrencies are not regulated by governments; they are decentralized. Most countries are yet to accept them as legal tender.
What makes cryptocurrency different from others?
IMAGINE A SCENARIO ONLINE TRANSACTION
Let us imagine A and B went to the restaurant and eat everything they want and finally, the barer gave the bill
Now they pay the bill using a credit or debit card, Now sender sends money and the receiver receives money, but this transaction could be a failure because of several issues:
. The bank server is down (A technical issue at the bank ).
. User accounts had been hacked.
. Transfer limits for that account are exceeded.
Here is where cryptocurrency has a point
Let us assume A has 5 bitcoins and b has 2 Bitcoin
Now A has to send 2 Bitcoin to B
Now using Bitcoin app or any platform When A enters 2 Bitcoin to B then, Algorithm checks whether A has a proper balance to send and update it and sends to B
It happens within minutes and no third party is required, It is a direct transaction between A and B
Cryptocurrency has a freedom that anyone can use.
And no limit on a transaction and no bank involvement will be there, And any worldwide transactions can be done Very much faster.
ex: Bitcoin, Dogecoin, etc, are some Cryptocurrencies.
Determining the price of cryptocurrency
The most effective way the price of a cryptocurrency coin is determined is by its demand. Heavy demand from buyers will push the value of a digital coin upwards. Conversely, if a coin has a high supply with little demand, then its value will drop.