Wednesday, December 22, 2021

A Quick Introduction To Cryptocurrency

 Everyone knows that money just ain’t what it used to be, and as the global economic system continues to change in all sorts of ways, savvy investors are looking for alternatives to traditional models of investing and money management.


While the staples of property and stock market investing are far from behind us, how markets interact with each other and indeed all the way along the logistics chain from procurement to retail is changing and changing fast.


These changes are in no small manner spurred on by the rise and rise, of cryptocurrency. It seems strange that this side of ten years ago, we’d barely even heard about Bitcoin, now there’s Bitcoin, Etherium, and at least another dozen Cryptocurrencies that are being traded freely worldwide on a multitude of platforms. That this method of currency exchange is to all intents and purposes unregulated has not escaped the eyes of the authorities and various attempts at controlling the exchange of Cryptocurrency have been met with equally varying degrees of success.


But, if you’re something of a layman in the world of modern economics but you want to be a player on some level, (because one right move can make you a lot of money), you need to know a few things first, because while one right move can make you that money - just one wrong move can cost you it, and unlike traditional investing frameworks you have little, if any, protection.



Image By sergeitokmakov

UNDERSTANDING THE JARGON


First, let’s have a look at what all of these new words mean because you have to get it right if you’re going to take on investing in Crypto, seriously and we’ll start at the top. So, what is Cryptocurrency? According to Investopedia:


“A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a disparate network of computers. A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.”


Now, to fully understand what all of that means, we recommend going to the Investopedia page we got this from and following the links within the text to understand more about blockchain, what is means by virtual currency, and more. The field is entirely fascinating, but we don’t have the space to get stuck into each definition in this post.


WHO ARE THE MAJOR PLAYERS IN CRYPTOCURRENCY


This is where you’re going to need to be quite savvy in terms of your money management because there are new Crytpo’s appearing all the time, so until you become more au fait with the industry as a whole, maybe focus on the most well-known and most stable cryptocurrencies. Here are the top five:


#1 BITCOIN:     Probably the most well known and most successful of the virtual currencies, 

Bitcoin is now accepted by thousands of companies and individuals worldwide.

It was created back in 2009 and is the original Cryptocurrency. It runs on a blockchain like most cryptos which uses a ledger logging transactions distributed across a network of thousands of computers. Additions to the distributed ledgers must be verified by solving a cryptographic puzzle, Bitcoin is kept very secure and safe from potential fraudsters.


Bitcoin has a market cap of just over $1.07 trillion and trades around $ 50,000 for one, however, you can buy bits of Bitcoin and increase your hold over time.


Bitcoin interest: how it works and how to get the best rate.


#2 ETHEREUM:    Ethereum is both a Cryptocurrency as well as a blockchain platform and 

is a favorite among program developers. This is because of its potential applications. For example with smart contracts that automatically execute when conditions are met.


Ethereum has a market cap of over $557 billion and you can buy one for around $ 4,000 and like Bitcoin you don’t have to buy an entire unit at a time.


#3 BINANCE COIN:    This form of Cryptocurrency can be used to trade and pay fees on 

Binance is also, one of the largest Crypto exchanges in the world. Since 2017 when Binance Coin was launched, it has expanded far beyond just facilitating trades, now it’s used for trading, payment processing, and paying for travel arrangements. It can also be traded for other forms of Cryptocurrency.


At its launch in 2017, you could buy one coin for just $0.10  but by the 30th of November 2021, it had risen to over $628 which means the unit has gained approximately 627,000% in less than then years.


#4 TETHER:        Unlike its other Crypto-siblings, Tether is a stablecoin. This means that itis 

back by fiat currencies like the US dollar and the Euro and so it could hypothetically keep its value against those denominations.


So this means that Tether’s value should be a lot more consistent than other Cryptocurrencies and so it is favored by investors put off by the extreme volatility that other cryptocurrencies face.


It has a market cap of over $73 billion and one Tether will cost you $1.00.


#5 SOLANA:        This Cryptocurrency was developed to help power decentralized finance

It runs on a highly unique hybrid proof-of-stake and proof-of-history mechanisms which helps it process transactions quickly and very securely.


It launched relatively early compared to its predecessors in 2020 and was then valued at $0.77, by November 30 in 2021 the price per unit was almost $213.42 which presents a gain of more than 26,500%. Solana has a market cap of over $64 billion.


You can trade Cryptocurrencies across many platforms, but you should do your homework and get some referrals and read a few reviews first. As with all providers in the service industry, not all are created equal. Bitcoin is currently enjoying a lot of recognition with the likes of Elon Musk giving it something of a nod, but if you want to gain a bit more skill before playing with the big boys, it may well be worth it to check out some of the others first.


There is so much to know about Cryptocurrencies and you must get yourself skilled before taking on any new investing ideas, but it does appear that Cryptocurrencies are going to be with us in one shape or another for some time, so the sooner you get started - the better.


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