Are you familiar with the words Litecoin, Stellar, tether and Bitcoin? I hope among all these words you may be more familiar with the word Bitcoin. If not, then in this video Sanjok has described all about these things. Today in this video you will be able to know about, What is Cryptocurrency?, What is blockchain technology?, Who are Miners? And many more.
While breaking down, cryptocurrency is divided into two parts. The first one is Cryptography and the second one is Currency. Ok first of all let’s know about cryptography. When we are sending any information from sender to receiver, there can be a third party person who can access the information in an illegal way. But by doing cryptography, we can encode the information in such a way that, sender can send the information to the receiver only and the third party cannot get through the information and neither can access and understand it. And in a simple way we know that currency means cash through which we can buy any goods.
So in simple form, cryptocurrency is simply a digital form of cash. While looking at the hard copy money, this money is printed by the Nepal Rastra Bank and authorized to the people to buy the necessities with the help of cash. But with time cash also has been digitized. In the past, a country could print money only by depositing the gold coins. But nowadays there is no need to deposit gold coins and a country can print as much as it wants. But if a country does so, inflation occurs where a chocolate that can be bought in Rs. 5 today will cost Rs.100 in future.
The control of cash printing is under the Nepal Rastra Bank. while looking at the transaction process of money from the Bank of Nepal to Bank of USA, a person do the transaction process using different medium like-IME, esewa, khalti, etc and these process is checked by the bank of sender like-about his bank account, his personal information, cash he want to transects and and so on, and when the information is matched, then only the further transaction process occurs, otherwise the process wont go further. And if the information is right then the money is transmitted to the receiver bank and the same process occurs at the side of the receiver bank as well, and finally the money is approved and gets by person 2 i.e receiver.
But in the Cryptography, there is no intermediary to transfer the money. I.e person 1 can send money to person 2 in a direct way. Here there is no role of the Bank as an intermediate. So, our Nepal Rastra Bank has banned this system in Nepal but it is legal in different countries like-India. Though, it has also been banned in India before, but when the case against RBI has been won, then the Cryptography has been legal.
Then what is Bitcoin? Ok let’s know about it as well. Bitcoin is a most popular Cryptocurrency. It was announced in 2008 and circulated from 2009. It is created by a person named “Santoshi Nakamoto” who remains anonymous till date. Only 21 million Bitcoins would be there and 18.5 millions are in circulation till now.
Remaining are yet to be circulated. As of date, 1 Bitcoin is equal to NPR 67.92 Lakhs at sunday 9th May, 2021 and NPR 46.66 Lakhs on Friday 21st May, 2021. So we can know the value of Bitcoin is fluctuating in a rapid way.
Ok now let’s talk more about Blockchain. Blockchain is a technology on which Bitcoin runs. It is one of the most secure technologies in the world.
Then what are miners? MIners are those people who help to execute bitcoin transactions by solving complicated mathematical equations. The miner gets 6.25 bitcoin for 1 successful transaction, while it will decline by 50% every four years. In the year 2040 the mining of bitcoins will be finished completely and after that only the trading of bitcoins will take place.
But there are some disadvantages of Cryptocurrency as well. Which includes:
Transaction once done is irreversible.
Can be used for illegal activities.
Lastly, lets see about the advantages of Cryptocurrency. Which includes:
No geographical barrier
No intermediary in between is required.
Charges are very less.
It’s very fast.
In recent days, The USA,China,Romania,Spain are the most popular countries who use Cryptocurrency technology for their ease.