Understanding the basic properties of Cryptocurrency

If you are an amid investor or someone who likes to follow the operations in the financial sector. You must have heard about Cryptocurrencies. Although most of our readers know what is cryptocurrency. They fail to understand the true property of a cryptocurrency. So, in this article, we will take you on an in-depth deep dive into the world of cryptocurrencies. Reading this article will make you understand the true nature of cryptocurrencies. This will also help you in understanding why most HODLers believe in them.

What is a Currency?

Before diving into the crypto part let’s first understand what does a currency means. Before the rise of currency, people used the barter system as the medium of exchange. But as humanity evolved so did the demands. This made it harder to transact via the barter system. and led to the currency.

The currency is just a state-promised medium of exchange. There are many uses of currency. But the basic use is to exchange it for anything with an equivalent value. Governments issue currency in the form of paper or coin. Which the nation has to accept at its face value.

What is Cryptocurrency?

A Cryptocurrency offers similar fulfillments which occur virtually. What’s more, there are no mediators or regulators of cryptocurrency who can manipulate it. You can use it to transact online. It works on the framework of blockchain. Blockchain is one of the most flourishing decentralized technology of this era. It is across the internet on various devices to record and manage operations.

Properties of Cryptocurrency

Below are some of the basic properties of a cryptocurrency:

It is in-tangible

Although most of the previous currencies were tangible. Cryptocurrencies are 100% virtual and there is no physical form for them.

Decentralized

A primary reason for this rapid growth in the crypto market is its decentralized nature. This is what intrigued people to look for a currency that is not in control of the government.

Various Alternatives

The most famous crypto coin of all time is bitcoin. But, we have 5000+ alternative coins in the market. These crypto agencies solve one or the other drawbacks of each other. Which makes each of them very unique and different from the other.

Future-oriented

As the value of money is going down, there has to be something that offers similar value in the future as well. With cryptocurrency’s decentralized nature it is impossible to manipulate. Therefore, it is the best.

Fulfills Basic requirement of Money

There are in total 7 requirements that you will find in money. Which are as follows:

• Essential value
• Durable nature
• Transferable
• Rare
• Stable store of value
• Divisible
• Homogeneous

All these qualities are present in cryptocurrencies.

Highly Volatile in Value

A big reason why most people are afraid to invest in the crypto market is its volatility. Cryptos are highly fluctuating assets as they are not governed by any entity.

Negative Uses

There are various rumors that people are using cryptocurrency for false usage. This includes trafficking, terrorism, dealing in the black market, etc.

This is also one of a few dark properties of the crypto world.