Cryptocurrency:What Is a Cryptocurrency?
A cryptocurrency or cryptocurrency (cryptocurrency of the Saxon) is a virtual currency that serves to exchange goods and services through a system of electronic transactions without having to go through any intermediary. The first cryptocurrency that started trading was Bitcoin in 2009, and since then many others have emerged, with other features such as Litecoin, Ripple, Dogecoin, and others.
We Have Ebooks we are giving out free to our readers CLICK HERE to get it free
What is the advantage?
When comparing a cryptocurrency with the money in the ticket, the difference is that:
They are decentralized: they are not controlled by the bank, the government and any financial institution
Are Anonymous: your privacy is preserved when making transactions
They’re International: everyone’s opera with them
They are safe: your coins are yours and from nobody else, it is kept in a personal wallet with non-transferable codes that only you know
It has no intermediaries: transactions are carried out from person to person
Quick transactions: to send money to another country they charge interest and often it takes days to confirm; with cryptocurrencies only a few minutes.
Irreversible transactions.
Bitcoins and any other virtual currency can be exchanged for any world currency
It can not be faked because they are encrypted with a sophisticated cryptographic system
Unlike currencies, the value of electronic currencies is subject to the oldest rule of the market: supply and demand. “Currently it has a value of more than 1000 dollars and like stocks, this value can go up or down the supply and demand.
What is the origin of Bitcoin?
Bitcoin, is the first cryptocurrency created by Satoshi Nakamoto in 2009. He decided to launch a new currency
Its peculiarity is that you can only perform operations within the network of networks.
Bitcoin refers to both the currency and the protocol and the red P2P on which it relies.
So, what is Bitcoin?
Bitcoin is a virtual and intangible currency. That is, you can not touch any of its forms as with coins or bills, but you can use it as a means of payment in the same way as these.
In some countries you can monetize with an electronic debit card page that make money exchanges with cryptocurrencies like XAPO. In Argentina, for example, we have more than 200 bitcoin terminals.
Undoubtedly, what makes Bitcoin different from traditional currencies and other virtual means of payment like Amazon Coins, Action Coins, is decentralization. Bitcoin is not controlled by any government, institution or financial entity, either state or private, such as the euro, controlled by the Central Bank or the Dollar by the Federal Reserve of the United States.
In Bitcoin control the real, indirectly by their transactions, users through exchanges P2 P (Point to Point or Point to Point). This structure and the lack of control makes it impossible for any authority to manipulate its value or cause inflation by producing more quantity. Its production and value is based on the law of supply and demand. Another interesting detail in Bitcoin has a limit of 21 million coins, which will be reached in 2030.
How much is a Bitcoin worth?
As we have pointed out, the value of Bitcoin is based on supply and demand, and is calculated using an algorithm that measures the amount of transactions and transactions with Bitcoin in real time. Currently the price of Bitcoin is 9,300 USD (as of March 11 of 2018), although this value is not much less stable and Bitcoin is classified as the most unstable currency in the foreign exchange market.
Cryptocurrency for Beginners
In the early days of its launch in 2009, several thousand bitcoins were used to buy a pizza. Since then, the cryptocurrency’s meteoric rise to US$65,000 in April 2021, after its heart-stopping drop in mid-2018 by about 70 percent to around US$6,000, boggles the mind of many people — cyptocurrency investors, traders or just the plain curious who missed the boat.
How it all began
Bear in mind that dissatisfaction with the current financial system gave rise to the development of the digital currency. The development of this cryptocurrency is based on blockchain technology by Satoshi Nakamoto, a pseudonym apparently used by a developer or group of developers.
Notwithstanding the many opinions predicting the death of cryptocurrency, bitcoin’s performance has inspired many other digital currencies, especially in recent years. The success with crowdfunding brought on by the blockchain fever also attracted those out to scam the unsuspecting public and this has come to the attention of regulators.
Beyond bitcoin
Bitcoin has inspired the launching of many other digital currencies, There are currently more than 1,000 versions of digital coins or tokens. Not all of them are the same and their values vary greatly, as do their liquidity.
Coins, altcoins and tokens
It would suffice at this point to say there are fine distinctions between coins, altcoins and tokens. Altcoins or alternative coins generally describes other than the pioneering bitcoin, although altcoins like ethereum, litecoin, ripple, dogecoin and dash are regarded as in the ‘main’ category of coins, meaning they are traded in more cryptocurrency exchanges.
Coins serve as a currency or store of value whereas tokens offer asset or utility uses, an example being a blockchain service for supply chain management to validate and track wine products from winery to the consumer.
A point to note is that tokens or coins with low value offer upside opportunities but do not expect similar meteoric increases like bitcoin. Put simply, the lesser known tokens may be easy to buy but may be difficult to sell.
Before getting into a cryptocurrency, start by studying the value proposition and technological considerations viz-a-viz the commercial strategies outlined in the white paper accompanying each initial coin offering or ICO.
For those familiar with stocks and shares, it is not unlike initial public offering or IPO. However, IPOs are issued by companies with tangible assets and a business track record. It is all done within a regulated environment. On the other hand, an ICO is based purely on an idea proposed in a white paper by a business — yet to be in operation and without assets — that is looking for funds to start up.
Unregulated, so buyers beware
‘One cannot regulated what is unknown’ probably sums up the situation with digital currency. Regulators and regulations are still trying to catch up with cryptocurrencies which are continuously evolving. The golden rule in the crypto space is ‘caveat emptor’, let the buyer beware.
Some countries are keeping an open mind adopting a hands-off policy for cryptocurrencies and blockchain applications, while keeping an eye on outright scams. Yet there are regulators in other countries more concerned with the cons than pros of digital money. Regulators generally realise the need to strike a balance and some are looking at existing laws on securities to try to have a handle on the many flavours of cryptocurrencies globally.
Digital wallets: The first step
A wallet is essential to get started in cryptocurrency. Think e-banking but minus the protection of the law in the case of virtual currency, so security is the first and last thought in the crypto space.
Wallets are of the digital type. There are two types of wallets.
- Hot wallets that are linked to the Internet which put users at risk of being hacked
- Cold wallets that are not connected to the Internet and are deemed safer.
Apart from the two main types of wallets, it should be noted that there are wallets just for one cryptocurrency and others for multi-cryptocurrency. There is also an option to have a multi-signature wallet, somewhat similar to having joint account with a bank.
The choice of wallet depends on the user’s preference whether the interest purely in bitcoin or ethereum, as each coin has its own wallet, or you can use a third-party wallet that include security features.
Wallet notes
The cryptocurrency wallet has a public and private key with personal transaction records. The public key includes reference to the cryptocurrency account or address, not unlike the name required for one to receive a cheque payment.
The public key is available for all to see but transactions are confirmed only upon verification and validation based on the consensus mechanism relevant to each cryptocurrency.
The private key can be considered to be the PIN that is commonly used in e-financial transactions. It follows that the user should never divulge the private key to anyone and make back-ups of this data which should be stored offline.
It makes sense to have minimal cryptocurrency in a hot wallet while the bigger amount should be in a cold wallet. Losing the private key is as good as losing your cryptocurrency! The usual precautions about online financial dealings apply, from having strong passwords to being alert to malware and phishing.
NB:We Have Ebooks we are giving out free to our readers CLICK HERE to get it free
Wallet formats
Different types of wallets are available to suit individual preferences.
- Hardware wallets made by third parties which have to be purchased. These devices work somewhat like a USB device which is deemed safe and only connected when required to the Internet.
- Web-based wallets provided, for example, by crypto exchanges, are considered hot wallets which purt users at risk.
- Software-based wallets for desktops or mobiles are mostly available for free and could be provided by coin issuers or third parties.
- Paper-based wallets can be printed bearing the relevant data about the cryptocurrency owned with public and private keys in QR code format. These should kept in a safe place until required in the course of crypto transaction and copies should made in case of accidents such as water damage or printed data fading through passage of time.
Crypto exchanges and marketplaces
Crypto exchanges are trading platforms for those interested in virtual currencies. The other options include websites for direct trading between buyers and sellers as well as brokers where there is no ‘market’ price but it is based on compromise between parties to the transaction.
Hence, there are many crypto exchanges located in various countries but with differing standards of security practices and infrastructure. They range from ones allowing for anonymous registration requiring just email to open an account and start trading. Yet there are others that require users to comply with international identity confirmation, known as Know-Your-Customer, and anti-money laundering (AML) measures.
The choice of crypto exchange depends on the user’s preference but anonymous ones may have limitations on the extent of trading allowed or could be subject to sudden new regulations in the country of domicile of the exchange. Minimal administrative procedures with anonymous registration let users start trading quickly while going through KYC and AML processes will take more time.
All crypto trades have to be duly processed and validated which can take from few minutes to few hours, depending on the coins or tokens being transacted and volume of trade. Scalability is known to be an issue with cryptocurrencies and developers are working on ways to find a solution.
Cryptocurrency exchanges are in two catergories.
- Fiat-cryptocurrency Such exchanges provide for fiat-cryptocurrency purchase via direct transfers from bank or credit and debit cards, or via ATMs in some countries.
- Cryptocurrency only.There crypto exchanges dealing in cryptocurrency only, meaning customers must already own a cryptocurrency — such as bitcoin or ethereum, — to be ‘exchanged’ for other coins or tokens, based on market rate
Fees are charged to facilitate the purchase and sale of crypto currencies. Users should do the research to be satisfied with the infrastructure and security measures as well as to determine the fees they are comfortable as different rates charged by various exchanges.
Do not expect a common market price for the same cryptocurrency with difference exchanges It may be worthwhile to spend time doing research on the best price for coins and tokens that are of interest to you.
Financial transactions online carry risks and users should factor in the caveats such as two factor authentication or 2-FA, keeping updated on the latest security measures and being aware of phishing scams. One golden rule on phishing is not to click on links provided, no matter how authentic a message or email is.
Cryptocurrency — The Way Forward and Possibilities
Cryptocurrency keeps getting better each day. It keeps on amplifying your wealth, just like your viral posts on social media. A contagious financial tool for a good portfolio and a catalyst for growth. One interesting fact is that there are more than 5000 cryptocurrencies.
2021 was a fantastic year, but where do we go from here?
Let us magnify the situation here. Both Bitcoin and Ethereum touched the higher bars of performance. Long-term investors are relying on it. By the time you read this article, there might be more wonderful news about cryptocurrency. I will try to present here the future possibilities of cryptocurrency.
New regulations are currently in place. They are under the carpets. Measures to minimize the risk from cybercriminals are in place. The purpose is to make this investment a safe tool for people. For instance: China declared in September that all cryptocurrency transactions are illegal. Clear regulations will remove all the hindrances to make it a safer trade.
How Will New Regulations Impact Investors?
IRS will find it easier to track tax evasion. Investors can transparently keep a record of transactions. For instance: recording any capitals gains or losses on crypto-assets will be easier. On the other hand, the price of cryptocurrencies will also be affected in the fluctuating market.
ETF Approval — An Important Factor to Consider
Bitcoin ETF made its debut on NYSE. It will help investors to purchase cryptocurrency from existing investment firms. Due to the rising demand, both the equity and bond markets deal with it. Let us watch in from an investor’s point of view. Easier accessibility of cryptocurrency assets helps people to purchase them without any hassles. If you plan to invest in a Bitcoin ETF, remember the risks are as same as any other cryptocurrency. You must be willing to take the risk. Otherwise, it is futile to invest your money.
What does the Future Hold?
Bitcoin is the best in the crypto market. It has the highest market capitalization rate. In November 2021, its price rose to $68000. In October, the rate was $60000 whereas in July it was $30000. There is a high fluctuation in the market rates. Experts suggest keeping the market risk for cryptocurrency to less than 5% in the portfolio. Talking about short-term growth, people are hopeful. The volatility in Bitcoin prices is a factor to consider. If you want to play for long, short-term results should not impact you.
Looking from it at an angle to amplify your wealth is not a good decision. Stick to traditional investment tools apart from cryptocurrency. For instance: if you want cryptocurrency as a tool to save for your retirement, it is time to reconsider your decision. Keep your investments small and diversify them. It will reduce the risk factor. At the same time, you will have more time to think about cryptocurrency.
It is necessary to spend your money wisely and then invest in cryptocurrency. One must assess the risk factor associated with it and make a decision. I hope this article helps you.
4 Common Mistakes You Should Avoid When Trading Cryptocurrency
Today, you can invest in cryptocurrency quickly and easily. You have the liberty to invest with the help of online brokers, but you cannot say for sure if this is a foolproof venture. There are a lot of risks and pitfalls that you need to face if you are thinking of entering this field. However, you don’t have to become a master in the world of computer science or finance to get started. What it means is that you have to make an informed decision. In this article, we are going to talk about some common mistakes that most cryptocurrency investors make. Read on to find out more.
1: You Buy the Wrong Coins
If you have made your mind to purchase Bitcoin, you have to be careful. There are different types of Bitcoin, such as Bitcoin private, Bitcoin SV, Bitcoin Gold, and Bitcoin cash. In other words, there are numerous offshoots that you need to watch out for.
Although these are not bad or scams, make sure you know what you are buying. Even if you purchase the wrong coin, you can still sell it back and look for the right one.
2: You’re not for the Wild Ride
If you want to enter the world of cryptocurrency, you have to have nerves of steel to face the volatility. Unlike the traditional finance world, cryptocurrency has extreme volatility, according to Theresa Morison who is a certified financial planner in Arizona.
According to her, as a new investor, you should invest a small sum in the beginning, such as $100 per month, and then forget about it. If you keep an eye on the market on a daily basis, it will drive you crazy.
Apart from this, just because you are a beginner, you may want to stick to 2 to 3 cryptocurrencies that you are familiar with. Ideally, you may consider the established coins first such as Bitcoin and Ethereum.
3: You don’t Double-Check the Address
Many cryptocurrency traders lose their coins just because they don’t double-check the address. Unlike a conventional bank transfer, you cannot just reverse a transaction. So, you have to be really careful when making this type of transaction using cryptocurrency. If you don’t be careful enough, you may end up losing thousands of dollars in seconds.
4: You Lost Access to your Wallet
Although there are a limited number of 21 million Bitcoins, the entire number of Bitcoins are not being created. The reason is that many of the coin holders have lost access to their wallets because of forgotten passwords.
According to the report from Chainanalysis, 1 out of 5 Bitcoins mined so far is not accessible because of Lost passwords. Therefore, make sure you store your password in a safe place before you start reading.
In short, we suggest that you avoid these four most common mistakes if you want to become successful in the world of cryptocurrency trading. Hopefully, these tips will help you be on the safe side and achieve success as a trader or investor.
How Crypto Works
Put simply, cryptocurrency is digital money, which is designed in a way that it is secure and anonymous in some instances. It is closely associated with internet that makes use of cryptography, which is basically a process where legible information is converted into a code that cannot be cracked so as to tack all the transfers and purchases made.
Cryptography has a history dating back to the World War II, when there was a need to communicate in the most secure manner. Since that time, an evolution of the same has occurred and it has become digitalized today where different elements of computer science and mathematical theory are being utilized for purposes of securing communications, money and information online.
The first cryptocurrency
The very first cryptocurrency was introduced in the year 2009 and is still well known all over the world. Many more cryptocurrencies have since been introduced over the past few years and today you can find so many available over the internet.
How they work
This kind of digital currency makes use of technology that is decentralized so as to allow the different users to make payments that are secure and also, to store money without necessarily using a name or even going through a financial institution. They are mainly run on a blockchain. A blockchain is a public ledger that is distributed publicly.
The cryptocurrency units are usually created using a process that is referred to as mining. This usually involves the use of a computer power. Doing it this way solves the math problems that can be very complicated in the generation of coins. Users are only allowed to purchase the currencies from the brokers and then store them in cryptographic wallets where they can spend them with great ease.
Cryptocurrencies and the application of blockchain technology are still in the infant stages when thought of in financial terms. More uses may emerge in the future as there is no telling what else will be invented. The future of transacting on stocks, bonds and other types of financial assets could very well be traded using the cryptocurrency and blockchain technology in the future.
Why use cryptocurrency?
One of the main traits of these currencies is the fact that they are secure and that they offer an anonymity level that you may not get anywhere else. There is no way in which a transaction can be reversed or faked. This is by far the greatest reason why you should consider using them.
The fees charged on this kind of currency are also quite low and this makes it a very reliable option when compared to the conventional currency. Since they are decentralized in nature, they can be accessed by anyone unlike banks where accounts are opened only by authorization.
Cryptocurrency markets are offering a brand new cash form and sometimes the rewards can be great. You may make a very small investment only to find that it has mushroomed into something great in a very short period of time. However, it is still important to note that the market can be volatile too, and there are risks that are associated with buying.
There is a level of anonymity associated with cryptocurrencies and this is a challenge because illegal activity can thrive here. This means that you need to be very careful when choosing to buy……You can start trading with Binance and Coinbase sign up to join the word of crypto
We Have Ebooks we are giving out free to our readers CLICK HERE to get it free
0 Comments