Assalamualaikum Steemian |
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With the prayers of my well-wishers I'm doing great and so do I wish for you all, beautiful people. Here is my view about the concerned topic.
Introduction |
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Cryptocurrency Is a digital or virtual currency regulated by computer codes and networks. The government and other central authorities are not involved in this as the other traditional central institution like banks.
How is the price of a cryptocurrency determined in the market? |
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Everyone is in search to find coins that make the biggest positive change and thereby changing their lives. But few knows about how these positive changes can occur. In my opinion, the factors that lead to to such a change are:
Supply:
Supply refers to the the total number of tokens or coins that a cryptocurrency offers and the amount that is currently available for buy/purchase. smaller the supply of a coin or token, higher the price of the coin or token. A process called "burning" is used to reduce the supply of cryptocurrency.
Demand:
Demand is the will of the buyers or investors to buy any cryptocurrency at its current price. If their numbers of buyers are greater than sellers, the price increases.
Utility:
Utility refers to, how the cryptocurrency can be used and where it can be utilized. It also includes the purpose of the cryptocurrency.
Competition:
Competition refers to coins or tokens that have almost the same role in the financial markets. So it's up to a cryptocurrency that how it compete with the other.
Availability:
By availability, I mean how easy the cryptocurrency is available to buy. If the cryptocurrency is widely available there are high Chances of more people to invest in it. Many cryptocurrency show increase in it's price when it's listed on major exchanges.
Fundamental:
The fundamental of a cryptocurrency can play a bigger role when for some shit coins. Examples are Shiba Inu and dogecoin . But it is also true that such coins have hype for some time and then these can be dumped for a lifetime. A single tweet from Elon Musk can also take the market to all time highs.
How can individuals purchase and store cryptocurrency? |
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Purchase:
To purchase cryptocurrencies, you'll need an exchange like Binance, Coinbase, bitget Robinhood, etc. An account needs to be created and verified (KYC). Now deposit the fiat currency and you will be able to buy all the cryptocurrencies available on the respective exchange.
Storage:
You can store your assets in an Exchange wallet but I want to suggest that for the long-term. Additionally, Software wallets like MetaMask can also be used for safe storage.
How secure are cryptocurrency transactions compared to traditional banking? |
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- It's difficult to hack cryptocurrencies as they are protected by encryption methods and technology.
- It's decentralized so it doesn't need third-party intermediaries.
- Its transactions are cheaper and faster than traditional banking.
- Money from overseas can take days but cryptocurrencies will make that transaction in minutes.
- Traditional banking is opaque while cryptocurrency is transparent.
Can cryptocurrency be used for illegal activities like money laundering? |
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Yes, We cannot deny the fact that it can also be used for illegal activities like money laundering. It's decentralized nature make it easy and favourable for the criminals and money launderers. But it's also true that fiat currency has also been used and is still in use in money laundering.
In the end, I want to say that many people will be agree with me while few may not, this is what the difference of opinion is and that is what leads the world forward.
Note: It's not financial advice, it's just my personal experience. Do your own research.
Inviting @emsonic , @nushrat and @tommyl33 to take part in the context.
Regards
@jalil654