Everything About Cryptocurrency | Bitcoin | Ethereum | Dogecoin | Litecoin

Virtual currency is on the rise and now contributes about 0.5% to the total global value of money, which is currently estimated to be around $420 trillion
In this video, we will peek into this cryptic world of cryptocurrencies: Bitcoin, Ethereum, Dogecoin, Litecoin, etc.

💬 Chapters
00:00 Introduction
00:51 What are cryptocurrencies?
01:54 How does it work?
05:16 How are they created?
06:15 Different types
07:35 How to buy cryptos?
09:45 Cryptocurrency performance
12:13 How are cryptos taxed?
13:26 Frauds and scams
15:34 Investing risks
16:31 Summary

📝 WHAT ARE CRYPTOCURRENCIES?
A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority like a government or bank. In the case of cryptocurrency this entire process of issuing, storage and accounting is completely decentralized and is entirely self-managed by thousands & millions of computers that run on free, open-source software that’s powered by blockchain technology

📝 HOW DOES CRYPTOCURRENCY WORK?
In the case of cryptocurrencies, this process revolves around the word “decentralized” which means instead of having an account for every user like we have in a bank every transaction of a given cryptocurrency is all recorded on the same giant ledger.There are many copies of that ledger and anyone who is a part of that cryptocurrency network would have a copy of that ledger, so every time someone pays for something with bitcoin that transaction is recorded as a block.

📝 HOW ARE CRYPTOCURRENCIES CREATED?
Unlike currency notes that are minted by central banks, a cryptocurrency is created by computer code. Which means in theory, anyone can create their own cryptocurrency using blockchain and that’s why there are over 6500 cryptocurrencies in existence today. The creation of new coins is called ‘mining’ that requires the miner to do small but complex algorithmic jobs like verification, matching of transactions or solving a mathematical puzzle. As per estimate almost 0.3% of the world’s electricity currently goes towards powering these cryptocurrency mining computers

📝 HOW TO BUY CRYPTOCURRENCY?
You can either use a traditional broker or buy through a dedicated cryptocurrency exchange. A broker is someone like a Robinhood, Charles Schwab or Coinbase which allows users to trade in cryptocurrency and other financial assets like stocks, bonds and ETFs. Cryptocurrency exchanges offer different types of cryptocurrencies and tons of features like wallet storage options, interest-bearing account options, margin trading, etc. So an Indian example of a cryptocurrency exchange would include CoinDCX, WazirX, CoinSwitch Kuber etc.

📝 HOW HAVE CRYPTOCURRENCIES PERFORMED?
Cryptocurrencies are relatively new investment instruments with a history of 12 to 13 years .. which means making sense of their performance is a bit difficult. For instance, Bitcoin has delivered annualized returns of almost 100% over the last decade which can in all practical sense be labeled as speculative given the fact that we are dealing with an unknown yet potentially promising instrument. Having said this, what one should expect from cryptocurrencies are periods of extreme volatility. Now the question where does this volatility come from?

📝 HOW ARE CRYPTOS TAXED?
In the 2022 Union Budget, Finance Minister Nirmala Sitharaman introduced a tax on all gains arising from the sale of virtual digital assets, including cryptocurrencies. Countries like the United States, the United Kingdom, and Canada all have a crypto tax which ranges from as low as 10% to as high as 45%. Now, the laws of our country recognize cryptocurrency gains as speculative gains which makes them subject to a flat taxation of 30% along with applicable surcharge & a 4% cess. Further, the Finance Minister through her recent budget, also introduced a TDS of 1% on all crypto transactions.

#Bitcoin #DogeCoin #Ethereum

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