Cryptocurrency garners limelight!
Bitcoin and other cryptocurrencies are the new dazzling asset class in the markets. The crypto bull run has indeed caught the attention of millions of people, who previously had never considered digital currencies like Bitcoin to be an alternative asset.
Simply stated, a cryptocurrency is a digital asset that works as a medium of exchange and is used or can be used for payments. All individual coin ownership records or transaction histories related to one Bitcoin are stored in a ledger, existing in a form of computerised database using cryptography to secure transaction records or to control the creation of additional coins as well as to verify the transfer of coin ownership. Many cryptocurrencies are decentralised networks, based on blockchain technology. Blockchain in simple words is a growing list of records of one cryptocurrency such as a Bitcoin that are further linked using cryptography wherein each block contains a cryptographic hash of the previous block, a timestamp, and transaction-related data details. Hence, it is considered that by design, a blockchain is immune to modification of its data and further allows for greater transparency for its users.
With the ever-growing evolution in technology, the story never ended with Bitcoin. Paving their way into the newly formed asset class, Bitcoin as of today has various competitive peers. Cryptocurrencies such as Bitcoin & Ethereum are getting competitive day by day in terms of returns. The price of Bitcoin has grown over four times and Ethereum by over ten times in the past year alone. Other popular cryptocurrency names include Litcoin, Ethereum, Cardano, Binance Coin, Ripple, Dogecoin, Bitcoin Cash, etc.
The popularity of cryptocurrencies is ever rising and yet uncertainty & volatility makes it a risky affair. Additionally, since it isn’t governed or controlled by the national authorities or central bank of any country, governments all over the globe have been taking an uncertain stand regarding this form of investment. This comes forward to be just one of the many risks associated with investing in cryptocurrencies. Cryptocurrency stands a risk from its peers as stronger and better versions of peers can shift the attention of investors from one type of cryptocurrency to the other very quickly.