What is cryptocurrency?
A cryptocurrency is a type of currency which uses digital files as money. Usually, the files are created using the same methods as cryptography (the science of hiding information). Cryptocurrencies use decentralized control, which means that they aren’t controlled by one person or government.
More than 6,700 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a market research website. And cryptocurrencies continue to proliferate, raising money through initial coin offerings, or ICOs.
The total value of all cryptocurrencies on Jan. 27, 2021, was more than $897.3 billion, according to coin market cap, and the total value of all bitcoins, the most popular digital currency, was pegged at about $563.8 billion.
Why are crypto currencies so popular?
- Supporters see cryptocurrencies such as Bitcoin as the currency of the future and are racing to buy them now, presumably before they become more valuable
- Some supporters like the fact that cryptocurrency removes central banks from managing the money supply, since over time these banks tend to reduce the value of money via inflation
- Other supporters like the technology behind cryptocurrencies, the blockchain, because it’s a decentralized processing and recording system and can be more secure than traditional payment systems
- Some speculators like cryptocurrencies because they are going up in value and have no interest in the currencies’ long-term acceptance as a way to move money
check our article how to invest in cryptocurrencies