What Is Cryptocurrency?

Blockchain is the basic technology behind bitcoin and thousands of cryptocurrensets and has a promising power over digital currencies. Most or all of the products featured here come from partners who compensate us. This can affect what products we write about and where and how the product appears on the page. However, this does not affect our testing. Our ideas are ours. Here is a list of partners and here's how we make money.

 

The investment details provided on this page are for educational purposes only. NerdWallet does not offer advisory or trading services, nor does it recommend or advise investors to buy or sell certain shares or securities.Types of Cryptocurrency

The first blockchain-based cryptocurrency was Bitcoin, which remains very popular and very important. Today, there are thousands of other cryptocurrensets with various functions and specifications. Some of them are clones or forks for Bitcoin, while others are new currencies built from scratch.

 

Bitcoin was founded in 2009 by a person or group known by the pseudonym "Satoshi Nakamoto." 1 As of August 2021, there were more than 18.8 million bitcoins in the stream with a total market capitalization of about $ 858.9 billion, the number being repeated several times. There are only 21 million bitcoins available, preventing both inflation and consumption. 2

 

Some of the competing currencies created by the success of Bitcoin, known as "altcoins," include Litecoin, Peercoin, and Namecoin, as well as Ethereum, Cardano, and EOS. As of August 2021, the combined value of all existing cryptocurrencies exceeds $ 1.8 trillion - Bitcoin currently represents approximately 46.5% of the total value.3

 

 Although cryptocurrency debts are in themselves financially, the Internal Review Service (IRS) treats you as a financial asset or asset. And, as with most other investments, if you reap big profits from selling or selling them, the government wants a piece of profit. On May 20, 2021, the US Treasury Department announced a proposal that would require taxpayers to report any $ 10,000 cryptocurrency transaction to the IRS. the taxpayer seizes the cryptocurrency.

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