As the world moves towards revolutionary technology in every aspect of life, the freshest talk of the town is “Cryptocurrency”, the new way of payments and trading. Cryptocurrency seems to have taken the entire world by a storm with the way it is functioning and rising in popularity.

But what is a cryptocurrency and how is it different from the existing modes of payment? What opportunities does this industry pose and what are the possible challenges that we could face? Let’s have a look.

Cryptocurrency is just like any other currency used for the exchange of value but is digital and uses encryption techniques to control the creation of monetary units and verify the transfer of funds. It is not a physical currency and has no intrinsic value. The network is completely decentralized and is not governed by any central authority. What makes this possible is- Blockchain technology. Blockchain technology is a decentralized ledger for all transactions across a peer-to-peer network. In simple words, blockchain technology makes it possible to remove all sorts of middlemen in a transaction and carry it out from the source to the receiver, participants can confirm transactions without the need for a central clearing authority.

Blockchain technology leads to increased transparency in transactions, accurate tracking of funds, a permanent and secure ledger and an overall cost reduction involved in these processes. This technology can be used across industries and make processes smarter, simpler, inexpensive and more transparent.

Bitcoin, as you must have heard recently, is the most famous cryptocurrency in the market, but there are other coins, also known as tokens, that hold massive values and are ideal for trading, like Ethereum, XRP, Litecoin, Binance Coin etc.

Crypto is currently seen as the future of payment and hence it is increasing in value. While the market is highly volatile, it is predicted that crypto is a good investment because it is ought to boom in the future. The fact that crypto also removes the central bank from the money supply chain which prevents the reduction of money’s value via inflation is another reason why people are supporting cryptocurrency. Other factors include security and transparency in payments, decentralized system, The flow of cryptocurrency also uses much lesser resources and energy as compared to the existing financial system around the world. These reasons make it ideal for cryptocurrencies to invest in. But do not be mistaken, crypto should currently not be seen as a method of payment in the real world, rather a store of value, a source to invest in.

But another store of value, as we know, is gold. So how is crypto different from gold and which one is a better investment? Both act as a hedge against currency devaluation and volatility. While gold is our traditional store of value, crypto is the new buzz. In the Indian context, gold still remains to be the go-to investment as it is more reliable and trusted while crypto has no governing body and hence no regulations. But with the gaining popularity, it is safe to call Bitcoin the digital gold. Crypto has a wider acceptance across the world and will be the future of investment. Time will tell which is a better option, but till then it is smart to study the market and take calculated risks in the crypto world.