THE BIG FUSS OF 21'

Bitcoin, the hullabaloo, the big fuss of ‘21. What exactly is bitcoin?

Bitcoin is the first cryptocurrency, a version of electronic cash that allows payments to be sent from one party to another without going through a financial institution/bank. Unlike currency notes it is a digital asset over which financial institutions like the central bank-RBI have no control. Trading of cryptocurrency is legal but it is not a legal tender money.

After the Global economic crisis of 2008 when big investment bankers like Lemen brother became bankrupt. Satoshi Nakamoto, a pseudonym on 31st October 2008 published a paper, where he explained his vision of having a digital currency, an alternative financial system based on software technology eliminating the involvement of a third party.

The idea picked up after the frequent bank failures, banks like Yes Bank, PMC Bank and Lakshmi Vilas bank were seen to be irresponsibly investing public deposits without checking and analyzing the payback capacity of the debtors, leading to huge bad debts, resulting in financial instability. Further demonetization, which made 86% of INR unusable made the public grow insecure about their money validity, so the conceptual idea of bringing cryptocurrency was majorly to reduce the power of financial institutions over money and monetary policies.

Now how does cryptocurrency works, the payment made via this mode need to be verified, here comes in the role of miners, these are people around the world, trying to decode a complex crypto equation with the help of supercomputers, all this data get stored in blocks which in turn is connected via chains, these blockchains are immutable. Now as and when miners solve these equations they earn bitcoins as a reward, as a proof of work.

Lately the cryptocurrency has been a topic of grave solicitude, a new rapidly growing source of investment, engendering huge returns. People invest their money in different types of cryptocurrencies like Bitcoin, Etherum, litecoins and ripple. Bitcoin has the largest market cap and covers 65% of total market capitalization in cryptocurrency.

Cryptocurrency is an incredibly speculative and volatile buy. Stock trading of established companies is generally less risky.

People should decide their long/ short term game in crypto depending on their risk, appetite and investment goals.

Crypto trading is like a two edged sword, it can make and break millions in minutes. You should focus on gaining knowledge before entering the markets.

Starting as early as possible is highly recommendable, you can start by investing your Saturday night party funds, it may grow up to many such party nights.