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Cryptocurrency for Beginners. Know Everything Before Investing

cryptocurrencies for beginners

Every year on 22nd may 'BITCOIN PIZZA DAY' is celebrated. And the story behind it is very interesting. on 22 nd may 2010 a software developer, Laszio Hanyecz bought 2 pizzas by 10000 bitcoins. That time price of bitcoin was 41 dollar, now its price is about 2800 crore rupees. Laszio had about 1 lakh bitcoins. If he hold them then its price is 28000 crore rupees. And for this infamous incident every year 'Bitcoin Pizza Day, is celebrated on 22 nd may. 

cryptocurrencies for beginners


From last some years bitcoin is in trend all over the world. Everyone is telling about bitcoin and cryptocurrencies. the returns that cryptocurrencies gave is also a discussing matter.

cryptocurrencies for beginners


From 2010-11 bitcoin performed extraordinary. But if you see the returns of cryptocurrencies in last two-three years is also shocking. If you bought a Bitcoin in 2016( then bitcoin price was 90000 rupees) then in august 2021 the price of bitcoin was 30 lakh rupees. And in 2016 if you bought a Etherium( then its price was 700 rupees) then in august 2021 its price was 1 lakh 70 thousand rupees. In last five years bitcoin gave yearly 137% compounded interest, etherium gave 182% yearly compounded interest and litecoin gave 108% yearly compounded interest. If we saw currencies history, at first Barter system was running, then berley were used as currencies, then gold, silver were used as currencies, then different kingdom currencies, then government currencies, then digital currencies and now cryptocurrencies. Cryptocurrencies are made using blockchain technology and bitcoin was the first cryptocurrency that was made using blockchain technology. Bitcoin was started in 2009 but its history ha been running from 1983. Cryptographer David Chaum developed first digital transaction technology in 1983 and he named it 'E-CASH'. After it many companies were built like Digicash and other companies. Elon Musk's 'x.com' was also among this companies. And later Paypal acquired 'x.com' and elon musk became member of Paypal. Later on oct 2002 Ebay bought paypal. On that time Elon musk had 11.7% stake of paypal. On the basis of it he got 100 million dollar and with the help of it he made different companies. 


Main reasons behind Cryptocurrencies making:


First reason is to remove the mediator in transaction. Here banks plays as a middle man in every transaction. The main funda of cryptocurrencies is to remove the mediator and the transaction will be happened between sender and receiver. Second reason is to reduce the cost of transaction. when we send the money in foreign countries then it takes time and also mediator takes charges of the transaction. For cryptocurrencies transaction you need a cryptocurrencies wallet. [ you can use Coinswitch Kuber from here]. When you open cryptocurrency wallet you will get an unique address. Assume that your friends want to send bitcoins. Then there you have to give your wallet address to your friend first. 


Here the fact is if there is no mediator in cryptocurrency transactions then who will verify the transaction. As for example if your friend want to send 0.1 bitcoin to your wallet then firstly it will be checked that 0.1 bitcoin is available in friend's wallet and it will be also checked then the address he put is also correct or not. After verifying all these facts the transaction will be happened and all these works will be done by miners. Bitcoin is working using blockchain technology. Here every transaction is stored in blocks. When one block is fully filled then next block will be created. And this process will continue one after another. When a block is fully filled then miners will get a puzzle to seal the block and the miner who solve the puzzle first he/she will get a reward in the form of bitcoin. Blocks are sealed with puzzle so that later none can manipulate these transactions. 


In 2009 50 bitcoins will be rewarded after solving the puzzle. in 2012 it would 25 bitcoins. in 2016 it would 12.5 bitcoins. In this way miners maintain all the system and in return they get a reward. Now cryptocurrencies are criticize that it takes too much power consumption. Bitcoin takes 113Twh/year power consumption. Beside this banking system takes about 263Twh/year and other mining takes 240Twh/ year power consumption. Here we should use renewable energy for mining.  


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