Cryptocurrency, Belief and Trust!

Do you ever wonder how cryptocurrency works?

Cryptocurrency is a digital currency that uses cryptography to secure transactions, anti-counterfeiting measures, and control the creation of new units. It’s not controlled by any central authority, so it’s decentralized. This makes it very different from traditional currencies like dollars or euros. In fact, its independence from banks and governments has been one of the main reasons why people are interested in using cryptocurrency in their everyday lives. There are many other reasons too!

As I said, it’s not controlled by any government or bank, and it’s completely anonymous. That means you can buy things without anyone knowing who you are. And because cryptocurrency works like cash, there are no credit card fees or chargebacks to worry about either.

It’s a decentralized system, meaning it doesn’t have any central authority or government backing. Instead, cryptocurrencies depend on people having faith in them as a means of payment and store of value.

The reason why cryptocurrency works are because people believe in it. If no one believed in the system then there would be no trust involved with using it and thus, no transactions would occur between users. This lack of belief would cause the price to drop significantly which could lead to its collapse altogether. However, since many people do believe in the system they continue to use it and buy into its success which keeps prices high enough so that more investors will invest money into buying coins/tokens from exchanges like Binance. As long as this cycle continues we can expect cryptocurrency prices to stay relatively stable (or rise) over time due to increased demand for these currencies by those who wish to invest their money into them rather than fiat currencies such as USD or EURO etc…

You might be wondering if this sounds too good to be true? Well, I think so too! But the truth is that cryptocurrency isn’t just a passing fad – it really does work for people all over the world every day. There are already millions of people using cryptocurrencies like Bitcoin and Ethereum to pay for goods and services online as well as send money back home to their families in other countries. This has never been possible before now! If you are in Hive then you already know something about crypto.

Why Does Cryptocurrency Work?

The big question is: why does cryptocurrency work? Why do people believe in it and use it for their transactions? Many ask the same question and we do not know what to answer. We simply say: "because they can". But it does not explain much.

Why do US dollars work? It is just a mere paper, right? But it has a certain value in it. But why does it contain value? It has value because it is trusted by the people and authorized by the government. But the main thing is it is trusted by the people.

People choose to use US dollars because they can trust its value. It guarantees that this paper is equal to a certain amount of oil, beef, or other commodities. This allows us to gain things we need easily and safely.

The same thing happens with cryptocurrency. Cryptocurrency works because people believe in it and treat it as real money. Yes, you read me right: "real".

Cryptocurrency has no physical form but it does not mean that you cannot exchange it for your needs. You can simply buy whatever you want and pay with it online without even using paper bills! It is so cool, isn't it?

But how do I know the price of anything if there are no fixed prices for anything? In order to determine whether or not certain crypto has a fair price, you can search for the node count and the total market capitalization of the cryptocurrency then compare those two indicators with other cryptocurrencies. The price of crypto is never constant. It is always fluctuating. This is considered a major drawback by some people but I think that it is not a big deal.

The price of a cryptocurrency does not really matter as long as you can use it for your needs and what's more, the fluctuation in price helps people to invest in crypto also called "HODLING". When I first heard about HODLING, my initial reaction was like "What the hell is he talking about?" But after doing research on this term, I found it means keeping your invested crypto, holding it for future benefits. It depends on the investor actually.

Wrap Up

There are people that just invest in cryptocurrency hoping to get rich quick while there are also other people who enjoy the benefits of having invested in it. The benefit I mean here is not getting rich quickly but enjoying seeing your money growing slowly over time. It might look unappealing at first but when you see how your money grows, you will definitely feel great about it.

I am new to this crypto world, which is constantly changing and evolving. I have such trivial knowledge of it. I am just a novice who is learning. I shared my thoughts about it. If you think there is something to add to it or I said something wrong, misled, please let me know in the comments!

NB- All Pictures are made by Canva