Cryptocurrency FAQs

  1. Why Purchase Cryptocurrency?

Purchasing Cryptocurrencies provides several benefits to the buyer as they can use it for the following primary purposes:

  • Make global transactions at relatively lower transaction costs than using Fiat money.
  • Securely Transfer Cryptocurrency to another individual or organization as payment, fee, etc.
  • Non-Centralized governance makes 24-hour Cryptocurrency trading & transactions possible.
  • Get quicker liquidity of Cryptocurrency into cash at lower costs.
  • And so on.
  1. How to mine Cryptocurrency?

Mining Cryptocurrency is possible in two ways: Proof of Work (PoW) and Proof of Stake (PoS). The former will require miners to solve complicated problems that require enormous computational power and electricity, whereas the latter will distribute shares to miners based on their present wealth.

A miner getting started will need a Graphical Processing Unit(s) (GPUs) and Application-Specific Integrated Circuit (ASIC). Then, they’ll need a cooling system that can keep the mining system running stable and a crypto wallet where you will obtain your crypto mining rewards.

Once you have those things, you must download crypto mining software on your running system and initiate it. Over time you may mine cryptocurrency of a particular kind through this method. Alternatively, you can instead join the pool of cryptocurrency miners by paying a fixed amount periodically, like a subscription to harness their computational power.

  1. What is Cryptocurrency?

It is a type of virtual currency that implements cryptography, ensuring no way to double spend it or create its counterfeit. It is stored on blockchains that are highly secure ledger systems that enable and record the transactions related to the respective cryptocurrency across the globe.

  1. Is Cryptocurrency Investment Good?

Investing in cryptocurrency is no less subjective than investing in any product, service, or commodity of the financial or non-financial type. Similarly, the rewards earned from making cryptocurrency investments are also subjective.

However, the growing prices of different cryptocurrencies by the year can make them seem lucrative alongside their scope of volatility. Thus, cryptocurrency investment may be good or bad depending on various factors like current market conditions, valuation, reliability, etc.

  1. What’s the difference between Cryptocurrencies and NFT?

NFTs or Non Fungible Tokens (ERC-721 Standard) hold unique value, and the owner cannot trade them against each other. At the same time, the crypto coins (ERC-50 Standard) belonging to a particular cryptocurrency can be interchangeable among others. For instance, one can exchange a dollar bill for another dollar bill or any other fiat money.

Furthermore, NFTs mainly serve to present the proof of ownership over different types of assets, unlike cryptocurrencies that only remain a medium of exchange. The owner or miner can make transactions for various uses using the cryptocurrency they possess.

  1. Can I buy Cryptocurrency?

It is possible to buy Cryptocurrency by exchanging your Fiat Money supported on the Crypto Exchange platform. Buyers may be allowed to exchange their fiat money using Credit Cards and Debit Cards at the respective Crypto money exchange websites.

Still, buyers will need to register to a crypto wallet first before purchasing from the platform as it will transfer the purchased cryptocurrency to the linked crypto wallet only.

  1. How to use Cryptocurrencies?

Many other uses are possible with Cryptocurrency, and most of them are tied to making financial transactions like paying for goods, services, products, etc. Miners or Owners can also pay via Cryptocurrency for donation purposes apart from other purposes like acquiring assets, making secure transactions, etc.

  1. Are Cryptocurrencies Legal?

The legality concerning the validity of a cryptocurrency isn’t provisioned in the legislature system of most countries. It makes it difficult to use or access cryptocurrency to the extent that it may be banned or illegal in such countries.

  1. How does a Cryptocurrency earn its value?

The value of a cryptocurrency exists because of the trust or the value that the two parties place on it for making a financial transaction to exchange it, similar to a democracy relying on a fiat economy for exchanging it against products or services.

Their value is unregulated by a Central Government Bank. Thus as long as owners, sellers, and buyers recognize or place value on the cryptocurrency, it will continue to earn its worth.

  1. Can I use Cryptocurrency to pay taxes?

Some countries cannot define the income generated by possessing or exchanging cryptocurrency, whether it falls under a capital gain or a type of business income. Thus, it can decline its value as a currency while also eliminating its eligibility to pay for taxes.

  1. Why is Cryptocurrency volatile?

The cryptocurrency can be a method of value transfer or as the intrinsic store of value. Such difference in deciding its value can lead to a few subsequent transactions or cryptocurrency transfers to re-define its value to low or high range instantaneously.

Another reason behind why they can pitch volatility in terms of their value is because no centralized body or organization governs their value or is assigned the power to rectify/restrict its value.

  1. Where is Cryptocurrency banned?

While some countries have adopted cryptocurrency, a few countries have banned its use and its possession. Examples of countries where cryptocurrency is banned include China, Vietnam, Russia, Bolivia, Columbia, and Ecuador.

  1. Can I get paid in Cryptocurrency?

Some online platforms and companies are allowing their employees to earn their salaries in cryptocurrency. But, in contrast, cryptocurrency adoption as a form of payment against services delivered is still largely yet to be fully developed.

Still, organizations like GMO Internet Group are already offering their employees the ability to obtain their salaries as a pre-determined cryptocurrency. Thus, as long as the cryptocurrency is legal in the respective nation of your location and concerning your contract terms about its uses, it’s possible to get paid in them.

  1. Can Cryptocurrency be traced?

Unlike the fiat money or traditional currency that can be stored away physically outside the range of a financial institution or equivalent, cryptocurrency is instead recorded in an immutable ledger called the blockchain. Any person accessing the blockchain can view the cryptocurrency’s ownership while allowing the owner’s identity to be anonymous if chosen.

  1. How to Sell Cryptocurrency?

The cryptocurrency that you may acquire or own can be sold in more than one way.

  • Via Cryptocurrency exchange platforms
  • Direct P2P trade
  • Bitcoin ATMs
  • Withdrawing Funds Via ACH transfer or SEPA
  1. Does Tesla accept Cryptocurrency?

Tesla initially did announce that it will start accepting cryptocurrency as a form of payment towards purchasing its vehicles. Soon after, it restricted accepting it due to the environmental factors that are endangered in mining cryptocurrency.

However, it released another statement mentioning that it will start accepting payments in cryptocurrency again after the mining process starts utilizing renewable energy by the margin of 50% or higher.

  1. Can I mine Cryptocurrency?

You can start mining for cryptocurrency instead of purchasing it but doing so will require you to own efficient computer systems. Those can function to carry out the complex and energy-monger computational problems necessary to solve for earning blocks of verified transactions, i.e., bitcoins stored on the blockchain.

  1. Is Cryptocurrency good for the environment?

Mining cryptocurrency generates 11.5 tons of e-waste annually. The process can demand significant electrical energy that otherwise can be channeled to supply power to cities and even some small countries.

The mining process can sometimes also consume enormous amounts of electricity that can short out the power supply of an area, which is lawfully punishable, which is also why most nations have banned the act of mining cryptocurrency as a measure to protect the environment.

  1. What are the cons of using Cryptocurrency?

The growing number of cryptocurrencies are becoming more than what the payment giant VISA organization can process each day, thereby creating a flux of various payment options that aren’t globally or nationally used at every vendor and similar parties.

Moreover, the energy required to mine cryptocurrency is detrimental to the environment. The high volatility of the value of cryptocurrency can land people in huge losses when they don’t invest wisely. Lastly, traceable cryptocurrency can still be used anonymously to support black market trade activities.

  1. Is blockchain necessary to hold Cryptocurrency?

It is possible to trade a cryptocurrency on the same blockchain as its origin or another blockchain. However, in summation, cryptocurrencies cannot exist without a blockchain. Furthermore, crypto wallets hold cryptocurrencies while the blockchain merely facilitates their existence.

  1. What is the market cap for Cryptocurrency?

The numerous types of blockchain cryptocurrency contribute to a market cap today valued at an estimated $2 Trillion, which is only bound to multiply with the adoption of blockchain into various trade practices by introducing more decentralized finance systems (DeFi).

  1. Who made the first Cryptocurrency?

The first cryptocurrency to be created is suspected to be Bitcoin, built by an individual or a group of individuals using Satoshi Nakamoto as a pseudonym. The identity is anonymously claimed to be from Japan, making the pseudonym the first entity to implement blockchain technology. Today, blockchain technology is widely used in fields like computer science, healthcare, banking, etc.

  1. Why ban Cryptocurrency?

Banning cryptocurrency use can reduce the number of buyers, which can directly lead to a decrease in the cases of mining them. Ultimately, it can better benefit the environment as mining requires enormous energy, which is excessive use of electricity and responsible for generating heat. Thus, accelerating global climate degeneration by advancing the process of global warming.