Cryptocurrencies are getting better visibility globally, and it is getting acknowledged in several countries who want to adopt digital currencies. Recently, the price of Bitcoin has risen more than 4 times and Ethereum by more than 10 times in the last year alone. These returns have attracted numerous investors to take a plunge in investing in cryptocurrencies. Millennials and first-time investors are interested to invest in cryptocurrencies; few cryptocurrency exchanges in India offer this option. Since this is a new domain, investors may not know several facts about cryptocurrencies. Let us dive into the top 9 facts about cryptocurrency that you might not know.
9 Facts About Cryptocurrency You Did Not Know
For several people, cryptocurrency is new. As time passes by, people are becoming interested in investing their money into digital currencies; but there are few things you didn’t know about cryptocurrency. Here are a few facts you should know about cryptocurrency.
Cryptocurrencies are a limited resource; the user should think again if they want to buy endless amounts of crypto coins. Cryptocurrency is just like oil or gold and they are a limited resource. This is the major reason why Bitcoin continues to go up when the supply goes down. Moreover, Bitcoins supply is limited to 21 million; when the supply becomes scarce, the value of the coin goes up.
Impossible to Ban Cryptocurrencies
Few countries have discussed banning digital currencies. This is because of the cryptocurrency’s legal status that keeps the investors at bay. It is not possible as the cryptocurrency market itself may not be banned, even though countries had made few regulations on cryptocurrencies. CZ, the CEO of Binance opined that “technically, banning cryptocurrency’s use as a currency is not possible unless it is legally forbidden to perform that action. The definitions do not matter,”. Few countries that have banned the right to use cryptocurrencies are Bolivia, Nepal, Cambodia, Bangladesh, etc.
China Leads in Mining Cryptos
China leads in mining cryptos as 35.76% of the crypto mining takes place in China’s Xinjiang region. Moreover, it is roughly estimated that 65% of cryptocurrency mining takes place in China, around 6.9% in Russia, and 7.24% in the U.S.
Cryptos are Taxable
Depending on the country you live in, cryptocurrencies are taxed. As cryptocurrencies are now being adopted by the mainstream markets globally, tax agencies are trying to get income through taxable sources. Several countries expect investors to pay tax on the profits acquired through cryptocurrencies.
Cryptocurrencies are decentralized
If you are wondering where you can buy a cryptocurrency, there are many Bitcoin exchanges in India that offer investors the opportunity to buy crypto. As cryptocurrencies are decentralized, it exists only virtually. People can make use of cryptocurrencies for buying goods and services even though several people prefer to use them as a store of value.
Cryptocurrencies can be used in Ecommerce
The advent of the internet has made people open a bank account digitally, without much difficulty. Cryptocurrency can be used in the E-Commerce sector to reach more people if they provide cryptocurrency as a form of payment. Even though people have moved to online purchasing, using cryptocurrencies will further boost it. As it is decentralized, it does not require any intermediaries to execute the transaction and people can benefit from it.
International Transactions are Easy with Cryptocurrencies
Using cryptocurrencies, international transactions can be executed easily and you need not go through a foreign exchange to pay exorbitant transfer fees. Cryptocurrency transactions are carried out easily, and this does not take place in a centralized economy.
Cryptocurrencies are not backed by Banks
Just like US dollars or any other currency, cryptocurrencies are not backed by any monetary authorities or government. Unlike fiat currencies that are backed by the government digital currencies do not have any backing.
Uses Blockchain Technology
Cryptocurrencies use blockchain technology for executing transactions. Bitcoin was found in 2009, using the infrastructure known as blockchain technology. It is a decentralized ledger that executes transactions and records payments most efficiently.
To conclude, you need to do your research about cryptocurrencies as there is no widespread understanding of cryptocurrencies. The majority of people are not familiar with cryptocurrencies and still, they need to go a long way in learning about their uses. It is important to understand cryptocurrencies before you invest your hard-earned money in cryptocurrencies and proceed with caution at all times as they are prone to volatility and market fluctuations.