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Understanding Cryptocurrency, Blockchain and Bitcoin

Ever since billionaire Elon Musk's electric vehicle company Tesla Inc invested in the world's largest Cryptocurrency- bitcoin, leading crypto coins such as ethereum, dogecoin, and bitcoin have caught the attention of the bigger investors as well as the common man.

Introducing the world of Cryptocurrency?

In simplest words, Cryptocurrency is a digital asset that uses computer code and blockchain technology to operate. Cryptocurrency is a digital currency with no intrinsic value, no physical form and whose supply is not determined by central bank.

Today, there are thousands of cryptocurrencies. These still act as payment mechanisms but have also been developed for other use cases, such as lending and borrowing or digital storage. And one of the broadest use cases for this technology is speculation, buying in the hopes that the price will go up and the holders can make a profit.

What is Blockchain?

Blockchain is the technology that enables the existence of cryptocurrencies (among other things). Blockchain is a ledger that keep track of all the Cryptocurrency transactions. This ledger of transactions is maintained across computers that are linked across a distributed network. Transactions in Cryptocurrency protocols are combined into blocks, and these blocks are then linked together in a historical record of everything that’s happened on that blockchain.

What is Bitcoin?

Bitcoin is a decentralized digital currency one among the oldest and the largest, in terms of market capitalization cryptocurrencies globally that you can buy, sell and exchange directly, without an intermediary like a bank.

Bitcoin’s creator, Satoshi Nakamoto, originally described the need for “an electronic payment system based on cryptographic proof instead of trust.”

Bitcoin, the first Cryptocurrency created, was developed initially to act as a payment mechanism native to the online world. Faster, cheaper, censorship resistant and not beholden to any government or central bank’s whims.

Investing in Bitcoin

In order to invest in Bitcoin or any Cryptocurrency all you need to have is an account on any crypto exchange like WazirX, CoinDCX, and CoinSwitch Kuber.

WazirX is India’s top crypto exchange and backed by Binance, the world’s largest crypto exchange. One can start investing for as low as ₹100 in less than 60 seconds with the QuickBuy feature. Once you buy any Bitcoin, it’s onto you whether to sell, hold or buy depending on your market sentiments and your risk appetite, as in case of trading in stock exchange.

The value of bitcoin was nothing a decade ago, but each coin is worth almost $45,000 today. Because its supply is limited to 21 million coins, it may be expected that its price will only keep on rising as times goes on, especially as more large institutional investors begin treating it as a sort of digital gold to hedge against market volatility and inflation.

The burning question today- Why Bitcoin is falling?

The price of Bitcoin fell over 4 percent, in the hours after China's Central Bank's announcement, as did most other crypto tokens.

Cryptocurrency prices tumbled on September 25, 2021 after China’s central bank declared all transactions involving Bitcoin and other virtual currencies illegal. People’s Bank of China (PBOC) has issued a statement that all activities and transactions related to Cryptocurrency are illegal in china. Overseas crypto exchanges are also banned to provide services to mainland investors.

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