Cryptocurrency for Beginners in India
With the recent surge in popularity and value, coupled with falling returns of bank fixed deposits, more people are looking for cryptocurrency advice. For beginning investors, it would be worthwhile to examine how a cryptocurrency works and is being used. This article delight Cryptocurrency for Beginners in India gives you everything you need to know before investing in cryptocurrency.
What is Cryptocurrency ?
A cryptocurrency is a decentralized digital asset or virtual money that can be exchanged online for goods and services. Basically it’s a digitally currency or asset that exists virtually and uses cryptography to secure transactions and hence received its name. It uses peer-to-peer technology to operate without a central authority or banks, with transactions between users directly on a peer-to-peer basis. Cryptocurrencies are asset classes that operate just like the stock markets. The prices of this asset are based on the supply and demand in the market. Apart from the market conditions, cryptocurrencies also have immense future potential in terms of functioning.
Popular types of cryptocurrency
Bitcoin (BTC)
Created in 2009 by someone under the pseudonym Satoshi Nakamoto, Bitcoin (BTC) is the original & first cryptocurrency. As with most cryptocurrencies, BTC runs on a blockchain, or a ledger logging transactions distributed across a network of thousands of computers. Because additions to the distributed ledgers must be verified by solving a cryptographic puzzle, a process called proof of work, Bitcoin is kept secure and safe from fraudsters.
Bitcoin’s price has skyrocketed as it’s become a household name. In May 2016, you could buy a Bitcoin for about $500. As of Feb. 1, 2022, a single Bitcoin’s price was over $38,000. That’s the growth of about 7,600%.
Ethereum (ETH)
Both a cryptocurrency and a blockchain platform, Ethereum is a favorite of program developers because of its potential applications, like so-called smart contracts that automatically execute when conditions are met and non-fungible tokens (NFTs).
Ethereum has also experienced tremendous growth. From April 2016 to February 2022, its price went from about $11 to over $2,700, increasing nearly 25,000%.
Tether (USDT)
Unlike some other forms of cryptocurrency, Tether is a stablecoin, meaning it’s backed by fiat currencies like U.S. dollars and the Euro and hypothetically keeps a value equal to one of those denominations. In theory, this means Tether’s value is supposed to be more consistent than other cryptocurrencies, and it’s favored by investors who are wary of the extreme volatility of other coins.
Binance Coin (BNB)
The Binance Coin is a form of cryptocurrency that you can use to trade and pay fees on Binance, one of the largest crypto exchanges in the world.
Since its launch in 2017, Binance Coin has expanded past merely facilitating trades on Binance’s exchange platform. Now, it can be used for trading, payment processing or even booking travel arrangements. It can also be traded or exchanged for other forms of cryptocurrency, such as Ethereum or Bitcoin.
Its price in 2017 was just $0.10; by Feb. 1, 2022, it had risen to around $377, a gain of approximately 377,000%.
What can you buy with cryptocurrency?
Buy Services
Companies like Microsoft, Wikipedia, AT&T, Intuit and Shopify are known to have accepted Bitcoin payments for their services. A lot of online platforms issue vouchers that can be purchased using cryptocurrency.
Buy products
Depending on which part of the world you’re in, Burger King, Pizza Hut, KFC & Subway outlets in different countries accepts payment through cryptocurrencies. Luxury retailers such as Bitdials offers Rolex, Patek Philippe, and other high-end watches and accept crypto as a form of payment.
Owning a virtual world
You can also buy property in a virtual gaming world. Decentraland, which also runs on the Ethereum blockchain, is the first virtual world entirely owned by its users. Users can buy and sell land, avatar clothing, and all kinds of other stuff while partying in virtual nightclubs or mingling in virtual art galleries. A wide variety of new players are aiming to recreate the entire global system syncing it with metaverse.
Cryptocurrency uses in India
Buying Products with Crypto in India | Cryptocurrency for Beginners in India
India is opening up to the idea of accepting crypto as a legitimate payment method at a fast pace. Unocoin, a bitcoin trading site is now allowing its users to buy vouchers from over 90 different brans using bitcoins. A registered user of Unocoin can use a Bitcoin worth as little as Rs 100 and as much as Rs 5000 to avail these voucher. Using this voucher you can buy Domino’s pizza, ice-cream from Baskin robins, beauty and health products from Himalaya and even home appliances from Prestige.
The biggest accepter of cryptocurrency as the payment method is Apple Inc. Apple allows 10 types of cryptocurrencies as a payment method for carrying out the transactions in the App store. Many companies are experimenting with it to use it as a payment source.
Trading with Crypto in India | Cryptocurrency for Beginners in India
As part of a broader investment strategy, crypto can be approached in a wide variety of ways. In aspects of Trading with cryptos, India’s crypto market is witnessing high trade volumes not only from the metro cities but from the entire country. Trade volumes from smaller cities show a high level of penetration of digital assets in India and with post-pandemic recovery, retail and institutional investors are looking for high returns on their investments.
According to this article https://economictimes.indiatimes.com/markets/cryptocurrency/day-trading, top exchanges have recorded a 200-500% jump in the number of day traders who make money merely by taking positions in various crypto assets. In all, there are about 105 million Indians who hold crypto assets, and the number of traders is a little over 1 million, according to exchanges.
How does cryptocurrency work?
Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders. Units of cryptocurrency are created through a process called mining. Mining involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets . Cryptocurrency can be accessed from your wallet by using your ‘private key’. There are different wallet providers to choose from. Hot wallet storage to crypto storage that uses online software to protect the private keys to your assets. Cold wallet storage rely on offline electronic devices to securely store your private keys. Typically, cold wallets tend to charge fees, while hot wallets don’t.
Cryptocurrencies like Bitcoins can be easily transferred from one digital wallet to another, using only a smartphone. Once you own them, your choices are to use them to buy goods or services ,trade in them or exchange them for cash. If you are using Bitcoin for purchases, the easiest way to do that is through debit-card-type transactions. You can also use these debit cards to withdraw cash, just like at an ATM. Converting cryptocurrency to cash is also possible using banking accounts or peer-to-peer transactions.
Is cryptocurrency safe? | Cryptocurrency for Beginners in India
Every transaction on the Bitcoin, Ethereum, Tezos, and Bitcoin Cash networks is published publicly, without exception. This means there’s no room for manipulation of transactions, changing the money supply, or adjusting the rules mid-game. Each currency has its own blockchain, which is an ongoing, constantly re-verified record of every single transaction ever made using that currency.
When paying with cryptocurrency, you don’t need to provide unnecessary personal information to the merchant. Which means your financial information is protected from being shared with third parties like banks, payment services, advertisers, and credit-rating agencies. Because no sensitive information needs to be sent over the internet, there is very little risk of your financial information being compromised, or your identity being stolen.
The network powering Bitcoin has never been hacked. And the fundamental ideas behind cryptocurrencies help make them safe. The blockchain systems are permission less and the core software is open-source, meaning countless computer scientists and cryptographers have been able to examine all aspects of the networks and their security.
Final takeaway : Cryptocurrency for Beginners in India
Despite the lack of government backing, this asset class, has garnered massive popularity in recent years. Cryptocurrency is not about the ups and downs of the digital currency market; it is not even about a new unit of exchange to replace the dollar or euro or yen or rupees. It is about freeing people from the monopoly of the centralized system. Cryptocurrency is volatile and speculative in nature. But it is also the fact that cryptocurrency has been a major wealth creator for many people. Investors see cryptocurrencies as the currency of the future and are racing to buy them now, presumably before they become more valuable.
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