Crypto

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Understanding how cryptocurrency works is easier than you imagined. Here's what you need to know about cryptocurrency & how to trade crypto.

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A cryptocurrency refers to a digital or virtual currency. Cryptocurrencies usually operate using decentralized blockchain technology, are created through mining, and use cryptography to store transactions. Crypto is often used for a variety of functions, ranging from everyday transactions to money transfers. 

Essentially, a blockchain is a public ledger that records transactions onto a decentralized, peer-to-peer network. Because of blockchain’s decentralized nature and the absence of any central authority, through cryptography transactions, nodes are validated and recorded before blocks are added to the blockchain. 

As well as utilizing blockchain technology, most cryptocurrencies are created through the process of mining. Most also have a finite supply. Bitcoin has a supply of 21 million, with the last scheduled to be mined by 2140. 

However, not all cryptocurrencies utilize blockchain technology and mining. Take XRP, for example, which is minted by its parent company Ripple. For every 100 billion coins that were minted initially will be released on a gradual basis. At this stage, there are around 38 billion are currently in circulation. 

Cryptocurrencies are in demand for their decentralized nature. Plus, the broad pool of acceptance beyond the crypto communities makes cryptocurrency accessible for many things. Let’s take a look at some of their uses. 

Cryptocurrencies are becoming the norm for everyday transactions, although volatility is still a significant factor in why more merchants don’t accept them as a payment method. However, there have been major developments in this area in 2020. For example, Visa and Mastercard softened their crypto stance, and Paypal is announcing plans to launch crypto sales to its 300 million user base. 

Meaning decentralized finance, DeFi has been a critical buzzword dominating the conversation in the world of crypto in recent times. It is a movement intent on recreating traditional centralized financial services, such as loans and insurance, through decentralized blockchain technology and the use of smart contracts and decentralized apps (DApps). 

Some cryptocurrencies can be used for the facilitation of money transfers. One such currency is the XRP, using the Ripple network. Many central banks 

 now accept XRP for money transfers. This approach is replacing the hefty transfer fees with ultra-low transaction fees and processing times for a more efficient money transfer system.

The question of cryptocurrencies – particularly Bitcoin – being stores of value or ‘digital gold’ has been debated for several years. Although volatility continues to be a barrier in this respect, many industry analysts believe that Bitcoin and crypto’s continuing rise in popularity is a good signal for the future. Renowned trader and crypto analyst Tony Veys had this to say to the 

Besides, one of the advantages of perpetual contracts is that they offer up to 100x 

. In the regular spot margin market, 3-5x leverage is commonplace, with borrowing costs often being high. While the usual leverage offers on crypto exchanges are only 5-20x for regular futures contracts.

Cryptocurrencies give a financial identity to some of the 40% of adults around the world who don’t have a bank account, of which most are from developing countries. While in some countries, such as Myanmar, the figure is as high as a whopping 95%. A few reasons are living too far from a bank, not having enough assets, or lacking the necessary documentation.

What cryptocurrency and blockchain technology can do for these people is to bring them financial inclusion. This is important to build up savings and credit, receive loans, pay for goods and services online, and make investments, something they couldn’t have done previously. These things can, in turn, help to reduce poverty.

With cryptocurrency, an unbanked individual can finally own digital identity. There are also some Ethereum based projects which are already putting this into practice. 

 is one such example. Although still in its early stages, the ambitious network aims to promote financial inclusion by creating a secure, accessible, and scalable platform by which transactions across eWallets can be done quickly and safely.

How Do You Send and Receive Cryptocurrency?

To send and receive cryptocurrency, you need a crypto wallet. 

On Bybit, you can send and receive BTC, ETH, XRP, EOS, and USDT. 

You can buy cryptocurrency on Bybit in just a few clicks, and it can be in your wallet in a matter of minutes. 

On Bybit, you can buy BTC, ETH, and USDT in over 40 fiat currencies, all for ultra-low transaction fees. You can buy crypto using a variety of major payment providers, using Visa and Mastercard. 

Before you start trading on Bybit, you’ll need to set up a Bybit account. 

With no KYC, it’s a quick and easy process. All you need is a valid email address or mobile number. If you don’t already have an account, then what are you waiting for?

What Security Threats Do Cryptocurrencies Face?

Although their decentralized nature gives users control over their money, that also gives them responsibility for maintaining their security. Security keys can be lost, or worse, hacked. Hacking and phishing have been issues for as long as crypto has been in existence. 

Let’s look at some of the most significant security incidents that the world of crypto has faced:

At Bybit, it is of paramount importance to us to keep the funds of our users safe. Our industry-leading HD cold wallet system ensures the safety of your funds. 

Bybit also applies 2-factor authentication. So, only legitimate users can access their accounts. 

All wallet addresses should need to be kept safe and never given out to anybody. Learn 

Let’s look at some of the major cryptocurrencies out there and some new ones on the scene. 

Bitcoin was the first cryptocurrency to be created in 2009 and is the biggest by market cap. It remains the most likely contender to take over the fiat-based centralized monetary systems we see today. You can trade BTCUSD and BTCUSDT perpetual contracts on Bybit.

Although it can be used for transactions, the primary use for XRP is to facilitate payments through its centralized Ripple network. It is the third biggest cryptocurrency by market cap. You can trade XRPUSD perpetual contracts on Bybit.

USDT, also known by its parent company, Tether, is the most well-known 

. Its value is pegged to the US dollar, which keeps it immune from the volatility that other cryptocurrencies can face. It took over Bitcoin’s mantle as the most prominent cryptocurrency by trading volume in 2019. You can trade BTCUSDT, ETHUSDT, LINKUSDT, LTCUSDT, and XTZUSDT perpetual contracts on Bybit. 

EOS is another cryptocurrency running on a smart contract platform, which supports Dapps. These Dapps have a variety of functions, including gaming, social, and DeFi. You can trade EOSUSD perpetual contracts on Bybit.

Litecoin was part of the first wave of cryptocurrencies, having originated in 2011. Technically, it is practically identical to Bitcoin. However, its Lightning Network can process transactions much faster than Bitcoin originally could. 

A spin-off of, or ‘fork’ of Bitcoin, Bitcoin Cash was created in 2017. It then split into two separate cryptocurrencies in 2018: Bitcoin Cash and Bitcoin SV. 

Chainlink came from nowhere to become one of the top five cryptocurrencies by market cap in 2020, riding the wave of the DeFi boom. It acts as a decentralized oracle network that connects external data to smart contracts on the blockchain. 

Binance Coin is used for trading cryptocurrencies and paying for transaction fees on the Binance exchange. Released in 2017, it operates on the Ethereum blockchain and is in the 10th cryptocurrency by market cap. 

Quite possibly the most talked-about cryptocurrency in history (bar Bitcoin) is Facebook’s Libra coin – and it’s not even a coin yet. Indeed, there is some debate if it will ever get off the ground. It has been the subject of much controversy due to regulation and data privacy concerns, with significant initial backers such as Mastercard and Visa pulling out of the project. A second white paper was released in April 2020 to address some of these issues.

The idea of cryptocurrencies may seem confusing at first, but in essence, their basic premise is straightforward. They are revolutionizing the way we think about money – no longer does your money have to be at the mercy of a private entity. However, they are not a physical asset and can be sent worldwide quickly and for a low cost. Their variety of uses – ranging from transactions to facilitating money transfers – to helping fight poverty – gives them unlimited potential. Cryptocurrencies are here to stay. 

What Is Cryptocurrency? (Cryptocurrency for Dummies)

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