- By Jet Web Solution
- 27th June, 2022
understanding crypto in an easy way with jet web solutions
With gradual yet rapid digital transformation, people are getting more aware of digital platforms. Things are getting done digitally and thus people are getting habituated to the platforms as well as the developmental process. With the outbreak of the pandemic, every sector took to digital platforms, and thus payment and financial aspects got digitalized as well. This digitalization of payment and finances brings us to online payment gateways, digital transitions, and crypto. Crypto is getting famous these days due to the easy transfer facilities, its security, and most importantly the option of doubling and tripling the invested money within a few months. But what exactly is crypto? Let us learn more about it in an easy way.
What is crypto?
Crypto or commonly known as cryptocurrency is a digital currency that is highly secured by cryptography that abstains the currency from being double-spend. There are several types of cryptocurrencies in the market, some among them are simply decentralized networks that are based on blockchain technologies. However, did you know that cryptocurrencies are not issued by the central authority? It is done so as to avoid interference or manipulation of government bodies. In order to understand cryptocurrency properly, it is required to know about blockchain technology. So what exactly is blockchain? Basically, all type of cryptocurrency is based on blockchain technology. As the name suggests, a blockchain is a connected online ledger, and each block or ledger has one transaction verified independently by each member of the network. Blockchain technology reduces transaction costs in transactions as such.
Use of blockchain in cryptocurrency
The use of blockchain in crypto is very simple, it is a technology that helps to move information safely around the designated platform. Blockchain technology has the ability to keep financial matters safe and is thus implemented by digital currency. Blockchain enables virtual security that allows a person to safely trade and transact their finances.
Are cryptos legal?
After all that we have discussed previously in the blog, the question that still remains is the legality of cryptocurrency. Cryptocurrencies do not have any history of being backed up by any public or private entities and thus making a case for their legality has been difficult in several jurisdictions. Cryptocurrencies have been majorly functioning outside of existing financial infrastructure. Thus the legal status of crypto has several implications for its daily transaction. Although crypto is legal in most European countries as well as America, the easy trading of digital currency is illegal in India.
Pros and cons of cryptocurrency
Crypto was introduced into the world with the intention of revolutionizing the financial system. However, with each developmental stage, the cryptocurrency started gaining some pros and cons of its own. So let's first start with the pros of crypto, since crypto represented a new paradigm for money. The cryptocurrency had the potential threat of being a loss or a flop idea, however, it gained popularity with the idea of eliminating the possibility of failure unlike large banks that sets off a myriad of failures. Another advantage of crypto is that it allows easy fund transfer among two parties. Without the interference or any hindrance caused by banks. Cryptocurrency has the highest chance of providing profit with their investment since their values have skyrocketed in the recent few years. As mentioned earlier, since crypto uses blockchain technology, the transaction is cheap and safe.
Coming to the cons of cryptocurrency, the first one is about the trail that it leaves. Crypto is rather pseudonymous rather than anonymous and thus it leaves a trace for the FBI to follow. Crypto has also made it easy for nefarious criminals to make illicit purchases. Money laundering has become easy although it is said that crypto developed on the blockchain technology allows proper distribution of funds. Although crypto blockchains are highly secured, wallets can still be hacked. The most concerning disadvantage of crypto is that economists find it extremely imbalanced since it is considered short-lived.
Thus, ultimately it can be stated that crypto has its own advantage and disadvantage like other aspects, and trusting the digital currency or investing in crypto is market risk. Become an expert in crypto with a proper course and learn more about it.