What are Cryptocurrencies?

You may have a lot of questions about cryptocurrencies. What are cryptocurrencies? What is this thing? What is the need for it? In the coming time, will the prices of cryptocurrencies go up or down? Will the government ban cryptocurrencies? You may have a lot of questions but you only need to understand four concepts to answer these questions. If you understand these Four concepts, then you will understand the whole game of cryptocurrencies.

The First Point
Money v/s Currency

Till now the currency in your pocket you were considering it as money. The 2000 note as an example, you were considering it as money. But let's assume that if the government announces today that after today the two thousand note will not work then the value of the money in your pocket will be zero. But there is a difference in money. Its value cannot be zero.

Because money has its value stored. For example, you have a gold coin and there is a value of that gold coin. You can exchange it through currency, but you know that there is a value in it. The government cannot ban it and it will work all over the world. Currency may not be acceptable in any country. You have to convert it to USD first, then you have to take it.

There are a lot of problems something like gold or something like silver or those that have value works everywhere and that's why you will have to understand that there is a difference between currency and money because currency can be manipulated. The government regulates it, but it also manipulates it.

The Second Point
Centralized v/s Decentralized

That is centralized v/s decentralized. Currency can be centralized or decentralized. The money you use, our government controls it. It can print as much as it wants and from which inflation comes. The biggest reason for inflation is that the government can print as many notes as it wants. It is centralized by the government, but decentralized means that the government does not control it.

For example Bitcoin, no government is controlling Bitcoin and Bitcoin cannot be printed as much as it wants. It has a limited resource, limited supply, so because it has a limited supply, there is a value stored in it. Because the value is stored and it is limited, people say it just acts as gold. Gold is also limited and Bitcoin is also limited. In the coming time, people say that the money of Bitcoin will increase. Because no government is manipulating it, there are no regulations in it. Just Google about China. China once dropped its currency.

If it dropped its currency, then you would think that it would have had a big effect on their country, but the currencies are very interconnected. They dropped their currency and it affected the US. It affected the US stock market. Now if the government manipulates its currency, then the whole world is in danger of it. The birth of decentralized currency is what we call cryptocurrency. You will say that there are many small currencies in cryptocurrencies that people can regulate. For example, Dogecoin. Now if it is a small coin Dogecoin is also not small if a big player comes if a big bull comes, then what can it do inside it? What did Elon Musk do? 

Whenever he increased it whenever he dropped it because the size of the market is still very small. When the size of the market will increase. for example, today the size of the stock market is very big in front of the cryptocurrency market. So if someone comes and puts one thousand crores or ten thousand crores then he cannot manipulate the whole market. A stock can also be manipulated here. The difference between centralized and decentralized.

The Third Point
Fiat Currency

what does fiat mean? The money we are using is the dollar we are using the euro we are using the yen we are using all this comes under fiat currency. Why does it come? A few years ago, you or any country could print as much currency as it has gold in its reserve or assets. In today's date, the countries that are printing notes there are no assets behind it.

They are not backed by any asset. Print as much as you want. You already know what happened with Zimbabwe and many such countries have drowned their own country's economy while printing notes. Because it is in the hands of fiat currency, people think it is a fake currency. It is not backed by any gold. It is not backed by any assets.

This is my suggestion. It is not just about cryptocurrencies. It is about the money you get you convert it into assets whether it is in gold whether it is in silver or if you get more money, you take a loan. But what will be the benefit of this? Your money's value won't decrease over time. You will also be safe from inflation and God forbid that what happened to other countries should not happen to other countries. But A lot of notes are being printed. A lot of money is being printed by the.

The Fourth Point
Digital v/s Physical Currency

Now digital v/s physical. A few years ago, people did not trust Paytm. People thought that they were putting money into it. What if Paytm runs away? Because it is digital. People thought that digital can only be in the bank. That too in our statement. If we see it in the account, then we will believe that the money is in our account. Otherwise, people believe only in physical currency.

I will share a very good incident with you. A man has been saving money for many years for his operation, for treatment. And where did he save it? In the cupboard of his house. But that man did not know that a rat could enter that cupboard. And the rat entered that cupboard and his money was spent. Now think about what that man must have gone through.

Now, being a physical currency, you can see money in your hand or you can see a car worth 50,000 in your hand. There are only figures in the account of 50,000 rupees. That 50,000 can be snatched, lost, a rat can enter, it can be stolen, anything can happen. Digitally now people think it is safe. Earlier people did not think.

Earlier people did not trust digital. Cryptocurrencies are totally based on digital, digital technology. It is totally digital. It will not come in your hands. You must have seen the Bitcoin coin many times, but you will never get it in your hands. It is a digital form of currency.