Qutomatic Follow Apr 21
· 12 min read
When most people think of cryptocurrency they might as well be thinking of cryptic currency.Very few people seem to know what it is and for some reason everyone seems to be talking about it as if they do.This report will hopefully demystify all the aspects of cryptocurrency so that by the time you’re finished reading you will have a pretty good idea of what it is and what it’s all about.
You may find that cryptocurrency is for you or you may not but at least you’ll be able to speak with a degree of certainty and knowledge that others won’t possess.
4 Things You Should Know Before Investing in Cryptocurrency There are many people who have already reached millionaire status by dealing in cryptocurrency .Clearly there’s a lot of money in this brand new industry.
Cryptocurrency is electronic currency, short and simple.
However, what’s not so short and simple is exactly how it comes to have value.
Cryptocurrency is a digitized, virtual, decentralized currency produced by the application of cryptography, which, according to Merriam Webster dictionary, is the “computerized encoding and decoding of information”.Cryptography is the foundation that makes debit cards, computer banking and eCommerce systems possible.
Cryptocurrency isn’t backed by banks; it’s not backed by a government, but by an extremely complicated arrangement of algorithms.Cryptocurrency is electricity which is encoded into complex strings of algorithms.What lends monetary value is their intricacy and their security from hackers.
The way that crypto currency is made is simply too difficult to reproduce.
Cryptocurrency is in direct opposition to what is called fiat money.Fiat money is currency that gets its worth from government ruling or law.The dollar, the yen, and the Euro are all examples.Any currency that is defined as legal tender is fiat money.
3 Important Things You Should Know About Cryptocurrency Unlike fiat money, another part of what makes crypto currency valuable is that, like a commodity such as silver and gold, there’s only a finite amount of it.
Only 21,000,000 of these extremely complex algorithms were produced.No more, no less.It can’t be altered by printing more of it, like a government printing more money to pump up the system without backing.Or by a bank altering a digital ledger, something the Federal Reserve will instruct banks to do to adjust for inflation.
Cryptocurrency i s a means to purchase, sell, and invest that completely avoids both government oversight and banking systems tracking the movement of your money.
In a world economy that is destabilized, this system can become a stable force.
Cryptocurrency also gives you a great deal of anonymity.Unfortunately this can lead to misuse by a criminal element using crypto currency to their own ends just as regular money can be misused.However, it can also keep the government from tracking your every purchase and invading your personal privacy.
4 Key Areas for Developing Blockchain Platforms Cryptocurrency comes in quite a few forms.Bitcoin was the first and is the standard from which all other cryptocurrencies pattern themselves.All are produced by meticulous alpha-numerical computations from a complex coding tool.
Some other cryptocurrencies are Litecoin, Namecoin, Peercoin, Dogecoin, and Worldcoin, to name a few.These are called altcoins as a generalized name.The prices of each are regulated by the supply of the specific cryptocurrency and the demand that the market has for that currency.
The way cryptocurrency is brought into existence is quite fascinating.Unlike gold, which has to be mined from the ground, cryptocurrency is merely an entry in a virtual ledger which is stored in various computers around the world.These entries have to be ‘mined’ using mathematical algorithms.Individual users or, more likely, a group of users run computational analysis to find particular series of data, called blocks.The ‘miners’ find data that produces an exact pattern to the cryptographic algorithm.
At that point, it’s applied to the series, and they’ve found a block.After an equivalent data series on the block matches up with the algorithm, the block of data has been unencrypted.The miner gets a reward of a specific amount of cryptocurrency.As time goes on, the amount of the reward decreases as the cryptocurrency becomes scarcer.Adding to that, the complexity of the algorithms in the search for new blocks is also increased.Computationally, it becomes harder to find a matching series.Both of these scenarios come together to decrease the speed in which cryptocurrency is created.
This imitates the difficulty and scarcity of mining a commodity like gold.
Now, anyone can be a miner.
The originators of Bitcoin made the mining tool open source, so it’s free to anyone.However, the computers they use run 24 hours a day, seven days a week.The algorithms are extremely complex and the CPU is running full tilt.Many users have specialized computers made specifically for mining cryptocurrency.
Both the user and the specialized computer are called miners.
5 Cryptocurrency Investment Tips That You Should Know Miners (the human ones) also keep ledgers of transactions and act as auditors, so that a coin isn’t duplicated in any way.This keeps the system from being hacked and from running amok.They’re paid for this work by receiving new cryptocurrency every week that they maintain their operation.They keep their cryptocurrency in specialized files on their computers or other personal devices.
These files are called wallets.
Let’s recap by going through a few of the definitions we’ve learned:
Cryptocurrency: electronic currency; also called digital currency.
• Fiat money: any legal tender; government backed, used in banking system.
• Bitcoin: the original and gold standard of crypto currency.
• Altcoin: other cryptocurrencies that are patterned from the same processes as Bitcoin, but with slight variations in their coding.
• Miners: an individual or group of individuals who use their own resources (computers, electricity, space) to mine digital coins.
o Also a specialized computer made specifically for finding new coins through computing series of algorithms.
• Wallet: a small file on your computer where you store your digital money.Easy Tips for Getting Started in Cryptocurrency Trading Conceptualizing the cryptocurrency system in a nutshell:
• Electronic money.
• Mined by individuals who use their own resources to find the coins.
• A stable, finite system of currency.For example, there are only 21,000,000 Bitcoins produced for all time.
• Does not require any government or bank to make it work.
• Pricing is decided by the amount of the coins found and used which is combined with the demand from the public to possess them.
• There are several forms of crypto currency, with Bitcoin being first and foremost.
• Can bring great wealth, but, like any investment, has risks.
Most people find the concept of cryptocurrency to be fascinating.It’s a new field that could be the next gold mine for many of them.
If you find that cryptocurrency is something you’d like to learn more about then you’ve found the right report.However, I’ve barely touched the surface in this report.There is much, much more to cryptocurrency than what I’ve gone through here.
To discover more about cryptocurrency click the link below.You’ll be taken to a web page that will explain one very clear way you can follow a step by step plan to start easily making money with cryptocurrency.
CLICK HERE FOR MORE INFORMATION 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.
Easy Tips for Getting Started in Cryptocurrency Trading 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.
Top Investment Tips for Trading in Cryptocurrency 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.
Understanding 3 Different Types of Blockchain Technology 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.
Easy Tips for Getting Started in Cryptocurrency Trading 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.
Easy Tips for Getting Started in Cryptocurrency Trading 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.
CLICK HERE FOR MORE INFORMATION 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.
CLICK HERE FOR MORE INFORMATION Article Source: http://EzineArticles.com/9996560.