What is Cryptocurrency? What is Bitcoin? advantages and disadvantages of Cryptocurrency

What is Cryptocurrency?

Simply A crypto currency is a digital currency. The word “cryptocurrency” is derived from the encryption techniques (cryptography) which are used to secure the network. A medium of exchange like normal currencies. It allows for instantaneous transactions and borderless transfer-of-ownership. Crypto currencies are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual currencies. They don’t have any physical form. Cryptography is used for such currency to make secure transactions. In Such Transaction information or transaction details are converted into such code that is uncrackable. So, everything in such transaction is traced by a code. Usually, Cryptocurrency is not controlled by any country, so the value of such currency is determined by the market. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. Blockchains, which are organizational methods for ensuring the integrity of transactional data. This decentralized structure allows them to exist outside the control of governments and central authorities.

 A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation. The first cryptocurrency to be created was Bitcoin back in 2009. Today there are hundreds of other cryptocurrencies, often referred to as Altcoins.

Why we use Crypto Currencies?

Specially designed to take advantage of the architecture of the internet , Transactions are checked, or “confirmed” by the computers of the users on the currency's network , Computers that verify the transactions receive a small amount of currency as a reward. A crypto-currency is a medium of exchange like normal currencies such as USD, but designed for the purpose of exchanging digital information through a process made possible by certain principles of cryptography. • Cryptography is used to secure the transactions and to control the creation of new coins

History of Cryptocurrencies

How Did It Start ?

In 2009 A technical paper was posted on the internet by Satoshi Nakamoto titled Bitcoin: A Peer-to- Peer Electronic Cash System • It described a system of cryptocurrency that was not backed by any government or any form of existing currency. • Interestingly, there is no such person. It’s a pseudonym. Few people know, but cryptocurrencies emerged as a side product of another invention. Satoshi Nakamoto, the unknown inventor of Bitcoin, the first and still most important cryptocurrency, never intended to invent a currency. ž In his announcement of Bitcoin in late 2008, Satoshi said he developed “A Peer-to-Peer Electronic Cash System.“ The single most important part of Satoshi‘s invention was that he found a way to build a decentralized digital cash system. In the nineties, there have been many attempts to create digital money, but they all failed. ž After seeing all the centralized attempts fail, Satoshi tried to build a digital cash system without a central entity. Like a Peer-to-Peer network for file sharing. ž This decision became the birth of cryptocurrency. In 1998, Wei Dai Published a Description of “B-Money”, an anonymous, distributed electronica cash system. • Nick Szabo created "bit gold" Like bit-coin and other crypto currencies. • The first crypto-currency to capture the public imagination was Bit-coin, which was launched in 2009 by an individual or group known under the pseudonym Satoshi Nakamoto.

Satoshi Nakamoto

Where Do Bitcoins Come From ?

Bitcoin is based on solving an encryption formula which requires extreme amounts of computing power. Each time you solve a portion of the formula you earn a “Bit Coin.” Websites like Deepbit.net help you set up the mining formula. Companies began to sell hardware called gate array miners to enhance the processing speed. How are Bitcoins created?

Through Mining process • Miners use special software to solve math problems (Bitcoin algorithm), and upon completing the task they receive certain amount of coins. • Mining programs tap into your computer's hardware resources and put them to work mining Bit-coin, Litecoin, or another type of crypto-currency. • And no, even if your hardware is used to generate money for them, you don't get any of it. • They get all the money from putting your hardware to work Mining cryptocurrency is a bit misleading because most of the work that is being done is to verify what transaction has taken place within the network and then add them to the ledger. Therefore, to understand mining better, it might be more simple to think of it as just verifications of transactions. They are created each time a user discovers new block. • The rate of block creation is approximately consistent with 50 % reduction every four years. • Supply growth -12.5 bitcoins per block (approximately every ten minutes) until mid 2020, and then afterwards 6.25 bitcoins per block for 4 years until next halving. This halving continues until 2110–40, when 21 million bitcoins will have been issued.

Only 21 million Bit Coins will ever exist • Nearly all Bitcoins have been mined and are now in circulation. Crypto-currencies are used primarily outside existing banking and governmental institutions, and exchanged over the Internet. • As of June 2017 total market capitalization of crypto- currencies is bigger than 100 billion USD and record high daily volume is larger than 6 billion USD.

Competition in crypto-currency markets • As of now 2020, there were over 4000 digital currencies in existence. In the world of Bitcoin, new coins are released on as steady and predictable rate. This rate started with 50 new bitcoins every hour and is halved until the around the year 2140 when there will be no more bitcoins released. By then, all the 21 million bitcoins that ever will be created will be in circulation.

Benefits-advantages of Crypto Currency

There are many promises to be fulfilled by a universal digital currency.

• Lowers the cost of processing. Ø Credit cards charge ~5% to the supplier. Ø Bitcoin transactions would cost almost nothing. •

Reduces Fraud Ø Credit card fraud costs billions of dollars each year Ø Don’t need to carry plastic in your wallet Ø Smartphone Apps can work with Bitcoin

• Digital currency makes a lot of sense. Ø It could eliminate a lot of middle man costs (credit cards, wire fees, etc.) Ø It could be extremely easy to use Ø It could eliminate billions of dollars in credit card fraud and identity theft.

• Easy to carry.

• Simple, Fast, Safe & Cheap.

• Low inflation & Collapse Risk.

• Untraceable.

• Access to Everyone.

• Decentralization Nature.

Buyers and sellers will use them and eliminate all the middlemen such as credit cards, ATM machines, etc.

• They will be safer than carrying a plastic card.

• They will be an international currency with no exchange transaction fees.

Risks- Disadvantages of Crypto Currency

Problems with Bitcoin currency • Legal experts said, however, that accepting payment in cryptocurrency falls in a legal grey area and that such transactions could be in violation of the Foreign Exchange Management Act (FEMA) as they constitute cross-border payments in a currency not recognised by the Reserve Bank of India. The lack of clarity on whether India will treat cryptocurrency as a currency, a product, or both, adds to the confusion around how to tax it, experts said.

• Lack of Awareness and understanding.

• Risk of Volatility.

• Still Developing

•Hackers. Cryptocurrencies are targets for highly sophisticated hackers, who have been able to breach advanced security systems.

•Fewer protections. If you trust someone else to hold your cryptocurrencies and something goes wrong, that company may not offer you the kind of help you expect from a bank or debit or credit card provider.

•Cost. Cryptocurrencies can cost consumers much more to use than credit cards or even regular cash, often due to price volatility.

•Scams. Fraudsters are taking advantage of the hype surrounding virtual currencies to cheat people with fake opportunities.

•Lack of Transparency. The anonymous nature of cryptocurrencies make transparency and accountability difficult for consumers seeking to ensure the safety of their investments.

How do crypto-currencies work?

• To realize digital cash you need a payment network with accounts, balances, and transaction. That‘s easy to understand. One major problem every payment network has to solve is to prevent the so-called double spending: to prevent that one entity spends the same amount twice. Usually, this is done by a central server who keeps record about the balances. In a decentralized network, you don‘t have this server.

Firstly, there’s no central bank anywhere that determines its value or controls the flow in which new money is being created. This makes the manipulation of the amount of money in existence not controlled by for the usual institutions we are used to. Another aspect that differentiates cryptocurrencies from regular currencies is the low transaction fees to transfer money all over the world. The fee is independent of distance, country borders etc. Basically, cryptocurrencies are entries about token in decentralized consensus-databases. They are called CRYPTOcurrencies because the consensus-keeping process is secured by strong cryptography. Cryptocurrencies are built on cryptography. They are not secured by people or by trust, but by math. It is more probable that an asteroid falls on your house than that a bitcoin address is compromised.

HOW TO TRADE Through the sections :

1. Fiat to Crypto Trading.

1. You have money to invest. 2. Chose an exchange: § Make sure that the exchange / trader is available / allowed in Lebanon. § Check reputation § Check exchange rates § Check required documents / safety 3. Create an account. 4. Wallet: § You must have one. § Cryptocurrencies deposited in & protected by a wallet. § It saves your private and public keys which helps you store, send, and receive cryptocurrencies. 5. Private key : § Gives you the right to access and send money. § Confidential and private. 6. Public key: § The address where everyone will send you money. § Public, to be given to others.

2. Storing Cryptocurrencies.

HOW TO TRADE Storing your Crypto : 

1. Hot storage. 

2. Cold storage. 

Hot storage : 

1. Like the wallet you carry around in your pocket. 

2. It gives you easy access to your cash. 

3. But, it is pretty vulnerable. 

Cold storage : 

1. Like your savings account. 

2. Highly impractical for day-to-day use. 

3. But, extremely safe.

3. Crypto to Crypto Trading.

CRYPTO TO CRYPTO 1. Open accounts in exchanges that enables crypto-to-crypto trading. 2. Check what cryptocurrencies are accepted, some allow you to buy using Bitcoin only. 3. Preferably better different than the one used to buy crypto from fiat. 4. Like traditional fiat currencies trading, with its charts, indicators,…

Examples of Cryptocurrancy

The one and only, the first and most famous cryptocurrency. Bitcoin serves as a digital gold standard in the whole cryptocurrency- industry, is used as a global means of payment and is the de-facto currency of cyber-crime like darknet markets or ransomware. After seven years in existence, Bitcoin‘s price has increased from zero to more than 650 Dollar, and its transaction volume reached more than 200.000 daily transactions.

The brainchild of young crypto-genius Vitalik Buterin has ascended to the second place in the hierarchy of cryptocurrencies. Other than Bitcoin its blockchain does not only validate a set of accounts and balances but of so-called states. This means that Ethereum can not only process transactions but complex contracts and programs.

Litecoin was one of the first cryptocurrencies after Bitcoin and tagged as the silver to the digital gold bitcoin. Faster than bitcoin, with a larger amount of token and a new mining algorithm, Litecoin was a real innovation, perfectly tailored to be the smaller brother of bitcoin.

RentalCoins is a cryptographic technology for the distributed ownership of vehicles. This technology will enable us to create a fleet of collaboratively owned vehicles that will be accessible to all.

Top 10 cryptocurrencies to explode in 2021

1. Bitcoin (BTC)

2. Litecoin (LTC)

3. Ethereum (ETH)

4. Basic Attention Token (BAT)

5. Binance Coin (BNB)

6. Ripple (XRP)

7. Chainlink (LINK)

8. Stellar (XLM)

9. Polkadot (DOT)

10. Dogecoin (DOGE)

How to buy crypto currency? (Where can I buy crypto-currency?)

In order to acquire crypto assets, the equivalent of a currency exchange office is needed. 

• This function is mainly done through an exchange or a broker. Crypto-Currency wallet 

• A crypto-currency wallet is a secure digital wallet used to store, send, and receive digital currency like Bit-coin. Most coins have an official wallet or a few officially recommended third party wallets . How to Getting a digital wallet •? If we want to receive, store, or send EUR, you need a bank account. In the crypto world, you need a digital wallet. 

• There are many wallet types and providers.

 • To buy coins and set up a wallet with Coin-base you’ll need your ID, credit card or bank account details.

How Would I buy some Bitcoins? 

To Buy Bitcoins on an Exchange: 

Ø Create an account at an exchange like coinsecure.in

Ø Wire them some money (no credit cards allowed) 

Ø Funds will show up in your account 

Ø Purchase or sell Bitcoins whenever you wish from your account. 

Ø You can have all or some sent to your Bitcoin wallet on your ComputerBuying small amounts of Bitcoins is popular by locally. 

Ø Find a dealer with an acceptable price (price is posted on the internet.) 

Ø Arrange a meeting place that is safe. 

Ø Bring cash since he/she doesn’t accept any form of credit. 

Ø You pay him and he initiates a transfer from his account in a Bitcoin Exchange. 

Ø He gives you a secure code which deposits them in your “wallet.”  ATM’s that sell Bitcoin are in a very few locations.

Ø First one was in Texas in a gun store. 

Ø Bitcoin ATM’s only take cash. 

Ø They only sell Bitcoin, you can’t convert Bitcoin to cash. • Currently not available in India.

Who Sells crypto currency ?

• Larger Buyers go to Exchanges 

• An Exchange is a website with significant software and funding 

• There are at least 25 Bitcoin Online trader in the India alone 

• We can buy and sell the bitcoins using our bank account 

• We can get the list from localbitcoins.com

Who Accepts crypto currency in India? § Unocoin has partnered with various merchants in India to bring bitcoin to the daily lives of every individual. The merchants which are currently on board with us are:

Ø eTravel smart - Online bus ticket booking portal.

Ø Reload - Online mobile recharge platform.

Ø Indsoft - Web hosting portal.

Ø Tecdoc365- Utility Software management

Ø Fightshop - Flights/Holiday booking portal.

Ø Dharwad International School - Educational Institute.

Ø Fashiondiva - Online cloth, accessories and home decor portal. Ø People place - Training and recruitment firm

Unocoin and MobiKwik partner to boost Bitcoin adoption across India with over 75,000 merchants 

Merchants that have integrated with MobiKwik include Domino’s Pizza, Pizza Hut, eBay, Uber, GoDaddy, WHSmith India, Cleartrip, IRCTC, Meru Cabs, Shuttl, Big Bazaar, OYO Rooms, Zomato, Barista, PVR, Archies, BookMyShow, Grofers, Big Basket, ShopClues, Myntra, Jabong, Pepperfry, MakeMyTrip, Sagar Ratna, TastyKhana, JustEat, PVR, Snapdeal, HomeShop18, Naaptol, Fashionara, FashionAndYou, Ferns N Petals, Café Coffee Day, and Yatra. Bitcoin sent through Unocoin can be used to purchase anything at all of these merchants and more. 90% of Bitcoin buyers are speculators !!! A speculator is a person who trades derivatives, commodities, bonds, equities or currencies with a higher than average risk in return for a higher-than- average profit potential. Speculators take large risks, especially with respect to anticipating future price movements, in the hope of making quick, large gains.

RBI Guidelines about cryptocurrencies

According to RBI, virtual currencies being in digital form are stored in digital/electronic media that are called electronic wallets (e-wallets). Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access credentials, malware attack etc. • Since they are not created by or traded through any authorized central registry or agency, the loss of an e-wallet could result in the permanent loss of the virtual currencies held in them. • Payments made through virtual currencies, such as bitcoins, takes place on a peer-to-peer basis without an authorized central agency regulating it. • The absence of information of counterparties in such peer-to-peer anonymous/pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism.

Bitcoin Outlawed in Some Countries 

• Russia was first to outlaw Bitcoin transactions • They have enough corruption without Bitcoin • China is restricting it use • Too much speculation • Korea outlaws it’s use – claims it’s not a legitimate currency • Thailand shutdown the Bitcoin exchange in their country

Conclusion • 

As you can see, any crypto-currency until now is not perfect. • It have many advantages; however, it also has its disadvantages. • This is mostly due to the fact that it is still a relatively young and new currency. • People are just beginning to become more aware of it. • In order for Crypto-currency to succeed, more people need to understand what it is.