Though Cryptocurrencies are at their initial stage, their popularity is reaching new heights every day. Their high returns in past years have made everyone talk about it. But the newness and complex foundation of virtual currencies raise many queries also in the minds of new investors.
So we decided to search the internet, find the most frequently asked crypto queries and answer all of them.
Let's begin!
Is cryptocurrency a currency?
Yes, a cryptocurrency is a currency that exists virtually only. Unlike traditional currencies like rupees or dollars, a cryptocurrency uses cryptography to secure transactions. It does not require a central authority like banks for its regulations.
Why was cryptocurrency created?
The generation of Bitcoin created cryptocurrencies. It took place in 2008 when an anonymous identity named Satoshi Nakomoto came up with Bitcoin after the collapse of the US banking system. This identity developed Bitcoin as an alternative to transfer and manage funds without depending on banking institutions. Many new cryptocurrencies have come after it.
At what time does the crypto market open in India?
It is a very commonly searched question on Google and has an interesting answer.
The crypto market stays open for 24 hours. It opens on weekends or any public holiday too. Because it neither has any opening time nor a closing time.
The location also does not matter because the crypto market stays open everywhere. However, crypto exchanges may halt trading at times due to technical reasons.
What are the most popular cryptocurrencies?
Bitcoin is the most popular cryptocurrency of all. It is the first-ever developed cryptocurrency available on almost every cryptocurrency exchange. Other than Bitcoin (BTC), Ethereum (ETH), Dogecoin(DOGE), Tether(USDT), and Cardano (ADA) are also some other popular cryptocurrencies.
At what time does a Crypto market become most volatile?
Though the crypto market is open 24/7, specific time frames exist when the market becomes more volatile. As per various websites, most cryptocurrency trading takes place between 8 am and 4 pm local time. The market detects the highest activity in the opening and closing of trades in this time frame. Another interesting observation about the market states that cryptos with the highest market cap tend to rise and fall almost together.
Sometimes, news and events also make the cryptocurrency market extra volatile.
Can you buy crypto during market hours only?
No, you can buy, sell and trade any time because the crypto market is open 24 hours. But crypto that you want to buy or trade should be available on the crypto exchange you use.
What is blockchain in cryptocurrency?
Blockchain is the technology that powers cryptocurrencies. It is the collection of verified transactions of a cryptocurrency. A blockchain is responsible for storing the records of every buy and sell activity of a cryptocurrency. It is a fundamental requirement for cryptocurrencies because it verifies every transaction without involving third-party institutions.
How many cryptocurrencies are there?
If we see the data for March 2022, there have been over 18,000 types of crypto coins and tokens in existence. But the maximum number of cryptocurrencies that can exist is not fixed as it keeps increasing. However, all cryptocurrencies are not available for crypto trading. Cryptocurrency exchanges keep adding and removing cryptocurrencies according to market conditions and other factors.
Is Cryptocurrency taxable?
Yes, cryptocurrency is taxable in some countries like India. Recently, the Indian government released rules on crypto taxation, which state that the government will deduct 30% tax on the income earned from the transfer of virtual digital assets. There will be no set-off against losses. A 1% TDS on crypto sell transactions is also applicable from July 1, 2022. The Indian government has implemented these taxation rules to regulate the flow of cryptocurrencies.
Are cryptocurrencies used for illegal purposes?
Since crypto transactions take place without revealing the identity, sometimes it is used by bad actors for illegal purposes. But many governments are releasing rules and laws to regulate the movement of cryptocurrencies so that such illegal activities can be prohibited.
Where to buy cryptocurrency?
You can buy cryptocurrency from any trustworthy cryptocurrency exchange like Flitpay. A crypto exchange is an online platform that lists cryptocurrencies for its users to buy and sell.
Why are Cryptocurrencies valuable?
The demand for cryptocurrency makes it valuable. For example, the maximum supply of Bitcoin is only 21 million, and miners have already mined 90% of this amount. It means that a time will come when no more new bitcoins can enter the market. This limitedness makes the demand for Bitcoin skyrocketing.
The utility of a cryptocurrency is also a significant factor in making a cryptocurrency valuable.
What is the difference between coins and tokens?
The cryptocurrencies that have their separate blockchain are called Coins. They are the native currency of their blockchains which are usable as an exchange medium. An example of a crypto coin is bitcoin, built on the Bitcoin blockchain.
Crypto tokens are cryptocurrencies created by specific platforms by building on top of an existing Blockchain. For example, SHIBA INU is a crypto token built on the Ethereum blockchain. These tokens hold some value in their platform. Their market price depends on the popularity of these platforms.
What is a Bitcoin address?
A Bitcoin address is a virtual location that someone requires to send or receive Bitcoin. It works similarly to email addresses where you send or receive emails. The only difference is that here bitcoin is exchanged instead of mail. Unlike physical addresses, a bitcoin address gets changed every time you receive funds.
Is there only one blockchain?
No, there exist many blockchains of different types. Bitcoin, Ethereum, and Dogecoin all have their dedicated blockchains.
If we talk about the types of Blockchain networks, there are four main types- Public, Private, Consortium, and hybrid blockchain networks.
