What is Cryptocurrency?

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Over the last decade, the word Cryptocurrency has found its way into mainstream conversation. Digital currency was originally a topic discussed among computer engineers and the like. However, it seems today that it’s discussed by everyone and their grandma.

A Cryptocurrency is defined as any digital or virtual currency that is decentralized and uses cryptography as a form of security. These digital currencies can be used to make virtual transactions, as well as traded with other Crypto Investors. Cryptocurrencies are continuously fluctuating, making the market extremely volatile which can be attractive to investors and traders.

Similar to other financial markets, the price of Cryptocurrency is heavily based on supply and demand. The exchange rate between a particular Cryptocurrency and another currency can fluctuate widely, however as of February 2019 there was a market value for all combined digital currencies of over $120 billion USD. The value of each individual unit of a virtual currency varies greatly. If we use Bitcoin as an example, you can see the price fluctuation in December 2017, when it hit over $19,000 USD followed by a 20% fall to around $15,000 USD hours later. 

Some of the most popular digital currencies are Bitcoin, Ripple, Ethereum, and Litecoin. The way that these, and other cryptocurrencies operate is based on blockchain technology. The central idea behind Blockchain is that it is a virtual ledger of economic transactions that is incorruptible, allowing digital information to be distributed but not copied. The blockchain network has been created in a way that it has no central authority, the information within the ledger is transparent and accessible by anyone.

Unlike other financial exchanges, the Crypto market is open 24 hours a day, seven days a week. However, the trade volume of the market can still vary, depending on the opening hours of the largest exchanges such as New York, Sydney, and London. The non-stop nature and volatility of the Cryptocurrency market has made it a popular exchange with investors.

In summation, Cryptocurrency may be a buzzword in 2019 but it just might be for good reason. The landscape of digital currencies is always changing and evolving. The constant fluctuations and volatility of the Crypto Market have been attracting investors worldwide. 

References: Evelyn Cheng, F. (2019). Bitcoin tops record $19,000, then plunges in wild 2-day ride. [online] CNBC. Available at: https://www.cnbc.com/2017/12/06/bitcoin-tops-13000-surging-1000-in-less-than-24-hours.html [Accessed 9 Aug. 2019].

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