Cryptocurrency is a form of digital money that uses encryption techniques to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. This article provide a breif explanation of facts about cryptocurrency.
Fame of Cryptocurrency
Cryptocurrency has gained popularity in recent years as its use increases for legitimate transactions. However, because cryptocurrencies are relatively new and their value is volatile, they also present opportunities for criminal activity.
Cryptocurrency can be used to purchase illegal goods or services online or to launder money. As such, law enforcement officials must stay up-to-date on developments in the cryptocurrency world to protect the public and investigate crimes committed with cryptocurrencies.
Interesting Facts about Cryptocurrency
Following are the 7 interesting facts about cryptocurrency that you must know:
Bitcoin Inventor Is Unknown
The identity of the person or persons who created Bitcoin is unknown. Satoshi Nakamoto is the name used by the unknown person or persons who designed the original Bitcoin protocol in 2009 and created the network.
Satoshi Nakamoto released the Bitcoin software as open-source code in 2009 and has since worked on the Bitcoin project as a core developer. He has also made numerous posts on online forums, such as Bitcointalk, using the Satoshi Nakamoto account.
In April 2011, Satoshi Nakamoto reportedly sent an email to a developer saying that he had “moved on to other things”. This was the last known communication from Satoshi Nakamoto and he has not been active on the Bitcoin network since.
Cryptocurrency prices are extremely volatile
Cryptocurrency prices are highly volatile and can swing widely from day to day. This makes them risky investments, but also means that there is the potential for large profits.
Any money you invest in cryptocurrency is at risk of being lost instantly if you’re not careful. Be sure to only invest what you can afford to lose, and always pay attention to the market so you can spot any potential risks.
Cryptocurency is taxable
In the United States, the Internal Revenue Service (IRS) has classified cryptocurrency as property for tax purposes. This means that any gains or losses from buying, selling, or trading cryptocurrency are subject to capital gains tax. The IRS treats cryptocurrency like other property, such as stocks or real estate.
- If you buy cryptocurrency as an investment, you will have to pay capital gains tax on any profits when you sell it.
- If you use cryptocurrency to buy goods or services, you will have to pay taxes on the value of the goods or services that you purchase.
Elon Musks Tweets can influences Cryptocurrency Prices
Elon Musk has tweeted about Bitcoin, and his tweets have caused a stir in the cryptocurrency world. His first tweet about Bitcoin was in December of 2017, and he said that he was “seriously considering” investing in it.
A few months later, in April of 2018, he tweeted that he actually bought some Bitcoin. In July of 2018, he again caused a stir when he tweeted that “Bitcoin is a scam“. However, he didn’t completely dismiss it, and he said that he thought it had potential as a payment system.
Despite his initial negative comments, it seems that Elon Musk has warmed up to Bitcoin. In February of 2019, he said that he was “open to the idea” of using it as a payment system on his company’s website, Tesla. And in April of 2019, he even hinted that Tesla might start accepting Bitcoin as a form of payment.
Cryptocurrency can’t be physically banned
Cryptocurrency can’t be physically banned or destroyed like other forms of currency. In fact, cryptocurrency is censorship resistant because it’s decentralized.
One of the Interesting facts about cryptocurrency is that no single entity or government can control it. This is one of the main reasons why people are interested in investing in cryptocurrencies. Cryptocurrencies aren’t subject to inflation because their supply is limited.
Some countries ban cryptocurrencies
Despite the fact that cryptocurrency can’t be physically banned, some countries have taken steps to ban it. For example, in September of 2017, China issued a ban on ICOs (Initial Coin Offerings). And in January of 2018, South Korea placed a ban on anonymous trading of cryptocurrencies.
Other countries, like Japan and the United States, have taken a more supportive stance towards cryptocurrency. They’ve recognized it as a legal form of currency and have begun to regulate it.
Cryptocurrency is not regulated by any financial institution
Major facts about Cryptocurrency is that it is not regulated by any financial institution, like a central bank. The decentralization of cryptocurrency means that no single entity has control over it. This can be seen as an advantage, because it makes cryptocurrency less susceptible to manipulation or interference.
It also means that there’s no one to turn to if something goes wrong. You can store cryptocurrency in a digital wallet. A digital wallet is a software program that stores your public and private keys, and allows you to interact with the blockchain. When you want to send or receive cryptocurrency, you use your digital wallet to do so.
More: Tips for Securing Cryptocurrency (How to Keep Cryptocurrency Safe & FAQS)
Frequently Asked Questions (FAQs)
Lets look at some frequently asked questions (FAQs) related to facts about cryptocurrency.
What is blockchain?
A blockchain is a digital ledger that records all the transactions made in a cryptocurrency. It’s a decentralized and distributed database that is used to keep track of all the transactions made in a cryptocurrency.
What are private and public keys?
Private keys are used to sign digital transactions and access your wallet. They’re like a password for your digital wallet. Public keys are used to receive cryptocurrency. They’re like your bank account number.
What is mining?
Mining is how new bitcoins are created. Miners are rewarded with bitcoins for verifying and committing transactions to the blockchain. Mining is a resource-intensive process, and it requires specialized hardware.
What is a digital asset?
A digital asset is anything that exists in a digital form and can be used as a medium of exchange. Cryptocurrencies are a type of digital asset.
What is a distributed ledger?
A distributed ledger is a database that is spread across a network of computers. Bitcoin’s blockchain is an example of a distributed ledger.
What is a smart contract?
A smart contract is a digital contract that is used to automatically execute certain terms of an agreement. Ethereum’s blockchain uses smart contracts.
Summary
Cryptocurrency is a digital asset that uses cryptography to secure its transactions. Some countries have taken steps to ban cryptocurrency, while others have recognized it as a legal form of currency. Cryptocurrency is not regulated by any financial institution. When you want to send or receive cryptocurrency, you use a digital wallet.