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Summary
- Cryptocurrencies are being adopted rapidly with more online payments using crypto and more firms adding crypto to their investment offerings.
- They are popular as they make fund transfers easy, secure with minimum fees.
- Ethereum is increasingly becoming the most preferred cryptocurrency, surpassing Bitcoin.
Cryptocurrency is a form of currency that has digital value and uses a decentralised system to record transactions. It has no central issuing or regulatory authority and is protected by cryptography to prevent deceptive transactions.
Blockchain is the technology behind the functioning of the cryptocurrency. It is a decentralized system that handles and records transactions distributed across a network of computers.
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The first cryptocurrency using blockchain technology was Bitcoin, which was launched in 2009 by a person or a group named by Satoshi Nakamoto. There are more than 10K different types of cryptocurrencies now. Ethereum, Ripple, Tether, Cardano, XRP are some of the other best cryptocurrencies in the market.
Cryptocurrencies are widely used and have gained attention recently. There are many reasons behind its growing popularity, which are mentioned below -
- Easy to transfer funds- Cryptocurrency is a decentralised medium of exchange, which is not issued by any central bank and eliminates any middleman to manage transactions between two parties. Subsequently, there is an ease in transferring funds from one party to other.
- Security- Transactions are protected and are not so easily traceable as they involve navigating through a series of web transactions.
- Low fees- Fees for using cryptocurrencies is much lower than the fees charged by banks and financial institutions. This is one of the biggest reasons for its popularity worldwide.
- Easy to get- Cryptocurrencies can now easily be bought from crypto exchanges with investors having several options to choose from.
- Profit opportunity- Investing in cryptocurrencies can be extremely profitable. Crypto market soared in 2020 with Bitcoin crossing US$64,000 mark in April 2021. However, every cryptocurrency coin took a blow and turned red as the Chinese government declared a ban on cryptocurrencies in the country. Investors who trust in crypto’s potential recognised the low prices as a chance to invest more.
DO READ: Which are the best crypto wallets in New Zealand?
The prospect of cryptocurrency being a legal payment method in the future is only increasing as more businesses and organisations accept cryptocurrencies. In June 2021, El Salvador became the world's first country to recognize Bitcoin as a legal tender.
Ethereum to take over Bitcoin?
Bitcoin and Ethereum are the largest and most well-known cryptocurrencies today. While Bitcoin is a digital currency based on the blockchain technology, Ethereum is a decentralised blockchain platform, which has its own programming language and uses smart contract functionality. It was created to expand the utility of cryptocurrencies by permitting developers to generate their own special applications. Ether is the main token of Ethereum.
DO READ: Want to get Worldcoin? Be ready to get your retinas scanned
For the first time, Ether surpassed Bitcoin in total number of transactions in the last week of June this year. Crypto analytics firm Santiment tweeted that Ether created history with daily active addresses shooting up to 649K as compared to those of Bitcoin at 580K. The firm also mentioned that other altcoins like Compound (COMP),Kusama (KSM) and Zilliqa (ZIL) fared well.
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Ether witnessed more daily active addresses (reveals total senders and receivers for a specific token) than Bitcoin. This confirms to increasing expectations that Ethereum could become the most preferred cryptocurrency, outpacing Bitcoin.
Ethereum will be a clear winner when it comes to innovation and developing enthusiasm. The absence of technological capabilities in the form of smart contracts limits Bitcoin's use. Advanced crypto use cases like as non-fungible tokens (NFTs) and decentralized finance (DeFi), are enabled via smart contracts. This is one of the reasons why Ethereum is preferred over Bitcoin.
ALSO READ: What is Nano? Is it better than other cryptocurrencies?
Ethereum currently consumes less energy than Bitcoin, and Ethereum 2.0 is intended to dramatically cut energy usage. These additional features make a strong case for Ethereum’s popularity.
