Since the year began, cryptocurrencies have left the stock market in the dust as digital currencies utilize encryption to generate money and verify transactions. In just a span of a few months, the virtual currency investors in many instances have seen quite a lot of gain.
This article is going to be very intriguing as we are going to amaze you with some of the most underrated and unknown facts about cryptocurrencies. If you are interested, then keep on reading the article.
1. DIGITAL CURRENCIES ARE STREAM THE VOLATILE
The fact that virtual currency trading occurs on various exchanges increases its volatility and that is the reason why cryptocurrencies are extremely volatile.
2. CRYPTOCURRENCIES HAVE NO BACKING
All the currencies in the world have been backed by the central bank or the government but in the case of cryptocurrencies, they have no fundamental backing. This summarises to another fact that there is no appropriate valuation, which makes it more volatile since the cryptocurrencies have no tangible fundamental factors.
Currencies like the dollar give estimates of the economic performance of a country along with the GDP, but in digital currencies, there is no direct fundamental ties with any such value.
3. THE MARKET HAS MORE THAN 1350 CURRENCIES
Now that’s quite an astonishing fact that the market of cryptocurrency is huge, and you must have not heard of any other Bitcoin other than Ethereum or Bitcoin. Bitcoin still remains one of the most famous cryptocurrencies of all. Among the 1,300 virtual currencies which are available in the market over two dozen have a market cap above $1 billion.
4. REAL VALUE OF CRYPTOCURRENCIES IS BACKED BY BLOCKCHAINS
Yes, you heard that right! Let’s first understand what a blockchain is. Blockchain technology is the infrastructure where Bitcoins and other cryptocurrencies are found. It is a digital platform and decentralized program that is connected through computers and networks that records payment and transfer transactions. It is also a very safe and efficient method of exchange. The blockchains help these cryptocurrencies are particularly available and valuable in the market.
5. IMPORTANCE OF MINERS IS HUGE
Miners play a critical role as it involves high-powered computers to solve complex mathematical equations. This is all done on a competitive basis and helps in verifying and log transactions. For cryptocurrencies to work, the transactions need to be verified, and the blockchains need to be enlarged. Here comes the role of miners who manages all these functions. The miners are given rewards which is in the form of cryptocurrency coin all the transaction fees which associated with the block.
6. DECENTRALIZATION IS KEY
The best and the most valuable facts about blockchain and cryptocurrencies is that it is decentralized. This means that there is no central hub where the information is stored, which makes it quite safe. Blockchains are away from cybercriminals who want to gain particular digital currencies. The servers and hard drives which are used across the globe contain pieces of information that is not enough to hack the whole blockchain network.