11 Frequently Asked Questions Concerning Cryptocurrency

Cryptocurrency has grown exponentially in recent years, and it is fair to say that it is now one of the most talked-about topics. People of all ages and demographics are interested in learning more about the digital currency market and its workings.

Naturally, you’ll have a lot of questions on your mind as well. Some of the most frequently asked questions are answered below.

1. What are cryptocurrencies, and how do they work?

Cryptocurrencies are digital currencies that cannot be seen or touched yet have a monetary value. They are supported by blockchain technology, which instead of relying on a centralized authority like a bank, depends on a network of computers to keep track of transactions.

2. Is there a difference between blockchain and cryptocurrency?

No. Blockchain is the technology that allows cryptocurrencies to function.

3. What are the options for purchasing Bitcoin in India?

Crypto exchanges make it simple to purchase Bitcoin. The procedure is straightforward and similar to stock trading. To get started, you must first create an account on the crypto exchange and fill out your personal information.

4. Is it possible for Bitcoin transactions to be taxed?

There is no clarity on the tax because there are no rules or laws governing crypto in India, and the digital currency has not been recognized as legal tender by the Reserve Bank of India. Bitcoin sales proceeds can be taxed as either company income or capital gains.

5. How do you convert cryptocurrency to cash?

You can sell your holdings and convert the digital currency to cash on crypto exchanges. You only need to meet all of the necessary KYC standards.

6. Is there a specific time when you can trade?

Because there is no centralized authority, most crypto exchanges enable you to trade 24 hours a day, seven days a week.

7. What are the most popular digital currencies?

Around 80% of the crypto market is made up of Bitcoin, Ethereum, XRP, Tether, and Litecoin. As per CoinMarketCap, there are currently over 15,500 cryptocurrencies in use around the world.

8. How likely is it that you’ll be hacked?

Because it’s a digital currency, it’s vulnerable to fraud and hacking. Anyone may set up a cryptocurrency exchange and begin selling coins. You should only invest in cryptocurrency after conducting extensive research.

9. Can you use cryptocurrency to make online purchases?

In India, no. No businesses or e-commerce platforms accept cryptocurrencies as a payment method. But in many countries, cryptocurrency can be used to make online purchases.

10. Is it possible to exchange one cryptocurrency for another?

For the time being, no. Any digital currency can be converted into tokens, which can subsequently be used to purchase another cryptocurrency. Thanks to crypto exchanges.

11. What factors influence the price of cryptocurrencies?

It functions similarly to the stock market. Demand and supply, competition, and news developments all influence the price of cryptocurrency. It’s also extremely volatile.

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