Cryptocurrency. Break it down to two words and you can easily understand what it is. It is a digital asset and it is managed by cryptography to make secured transactions and exchange its value with any other similar form of non-physical currency. To make it easier, while the dollar bills you have in your pocket is the regular currency, cryptocurrency is only digital and it stays digital. Thus, the other name for it is Digital Currency.
While you might be wondering how it is different from the digital payments from the bank you have your money in, the difference is that the cryptocurrency is made by a computer algorithm and the initiation of this currency is not through the printed notes. The first decentralized cryptocurrency in the world is Bitcoin, which was introduced back in 2009, and here we are in 2017, where even though trillions of dollars worth of transactions are being done in a month, but many are yet to realize what it is.
What makes this type of currency influential and attractive is the fact that a governing body of a country has no control over how the cryptocurrency works and if there should be any limitations placed on it. Some of the early names of the cryptocurrency types that were introduced include Bitcoin, Namecoin, Litecoin, and Peercoin. A proper establishment was seen when an actual ATM machine was installed based on Bitcoin and that was done by Jordan Kelley, founder of Robocoin. To do transactions, the users just had to confirm their identity through scanners to read government-issued identification such as a driver’s license or a passport to confirm users’ identities.
The growth of cryptocurrency and especially Bitcoin was so much that when Bitcoin was introduced, the cost for one bitcoin was about a dollar, and now the price for the same has gone to up to 900 dollars. Sure, there were flaws and some frauds identified and because of that, newer alternatives came in with new names but not so much difference when it comes to the technology.
The basic question for people is how they want to invest and own some cryptocurrency such as bitcoin. There are two ways. The first is to just buy them directly through one of the trusted sources but then, you have a risk of seeing its value go down and lose a part of your investment, and the second way is by mining them. Since this is a digital currency, you can mine the currency by yourself by owning some high-end computer hardware and software.
Another question – How is cryptocurrency fool-proof? Bitcoins, or any cryptocurrency doesn’t move around unlike the fiat currency that we have in our wallets. There is a public ledger and the information is live up there so that no one can use your currency and you cannot use other’s currency. The same currency that is used once, cannot be used again.
What can I use cryptocurrency for? This is a very common question, and just like how you own jewelry, you might wonder how this is going to be useful apart from the fact of giving a satisfaction that you own a valuable asset. It was earlier limited with the usage but now, several purchases are possible with the use of cryptocurrency and you can even invest in online gaming with the same. To spend the currency, you will have to do a digital signing of the transaction.
How guaranteed is the money invested for a return? To be fair, Cryptocurrency, bitcoin or any other coin is not a very stable currency. But when was the regular currency stable? A recession can change every equation and here too, the change in value happens rapidly, but you can be in luck or out of luck. As said above, you could become a millionaire by investing a few thousand or it could be vice-versa.
The positive point here is that things are quite transparent here and you won’t be seeing anyone hiding it anyway. But it is as confusing as well because to get a headstart, you need to prepare yourself to be on the learning path and compare to see what’s the best cryptocurrency to put your money on, out of the hundreds of options available.
Since bitcoin is one of the oldest cryptocurrencies and it still has about 2/3rd share of the entire cryptocurrency market, many would prefer to choose it over the other ones. But, the rise is surely there for the alternatives and the term “altcoins” is commonly used for these alternative options to bitcoins.
We will update some guides if you are eager to learn how to invest and get into the cryptocurrency scene, and if you have any doubts about it, do comment and we would love to help.