What is cryptocurrency?
A cryptocurrency is a digital currency(virtual) that is secured by cryptography. Cryptography makes it nearly impossible to hack, counterfeit, or double-spend. The cryptography technique is the reason for the naming of cryptocurrency. Almost all cryptocurrencies are based on blockchain technology. The Blockchain is a distributed ledger made with an individual computer network. Cryptocurrencies like bitcoin don’t have a central authority to handle. So it’s theoretically immune to any manipulation by central authorities like governments.
Why are cryptocurrencies important?
Cryptocurrencies are virtual tokens that have value in virtual space. These virtual tokens allow users to make secure payments online without the interaction of a bank or any middleman. You can make transactions of millions or billions of dollars without worrying about losing 1-5% as transaction fees. Most importantly, if you store your wealth in an asset like gold, exchanging and transporting your wealth is hard. But if you hold your wealth in an asset like bitcoin, you only need a hardware wallet and your private and public key pair to secure and transfer your wealth.
How many cryptocurrencies are there?
Bitcoin is the first-ever crypto in the world. Because of that, it holds the position of the most popular and most valuable cryptocurrency. Today there are thousands of alternative cryptocurrencies in the world. Those cryptos have various functions and specifications. Many of them are build on top of leading alternative cryptocurrencies like Ethereum(ETH), Binance coin(BNB), Cardano(ADA), Polkadot(DOT). The value of all cryptocurrency markets is about 1.9 trillion dollars now and increasing, and bitcoin alone holds more than 1.08 trillion.
Pros and Cons of cryptocurrencies.
- Cryptos are a fast and secure payment method for transferring money between two trusted parties without a third party’s interference, like a bank.
- These transactions only take about 1 second to 1 hour to show up on your wallet. Wallets are the bank accounts of cryptocurrencies.
- Using cryptocurrencies, you can avoid the humongous transaction fees of banks.
- Bitcoin is one of the best ways to hedge against inflation. Bitcoin has risen about 400% in the last few months. Still, we can’t guarantee that, but you should research and be prepared for what is to come.
- You are still early to cryptocurrency because only 1% of the population is still in cryptocurrency. So much more money to flow into crypto markets soon.
- Cryptocurrency transactions can be used for illegal activities because these transactions are semi-anonymous.
- You don’t get legal security with crypto transactions.
- There are so many scams related to cryptocurrencies, and you should be careful about where you’re investing your money.
- There is no refund policy with cryptocurrencies.
Is crypto a good investment?
Cryptocurrencies are a highly volatile investment. Because of that, many investors don’t like to invest in bitcoin and other cryptocurrencies. Investors value the cash flow, but with cryptocurrencies, you don’t get a cashflow. You get a capital gain. If you want to convert crypto to fiat currencies, you have to sell your crypto. That is not an excellent way to build wealth, according to many investors.
On May 22, 2010, a man called Laszlo Hanyecz traded 10000 bitcoins for two pizzas. Those two pizzas now worth over 570 million dollars. So who got in early had the craziest gains of their lifetime, and most of them are now millionaires.
Bitcoin maximalists Micheal Saylor have a theory. He says that bitcoin reaches its price of more than 1 million dollars per bitcoin, bitcoins volatility will decrease immensely. With that also the gains that you can get with bitcoin will reduce. So going in with money that you are willing to lose will be a great way to increase your wealth with cryptocurrency.
There are many millionaires, and billionaires are already in the cryptocurrency space. Elon musk bought 1.5 billion dollars worth of bitcoin, and they are going to hold them. Tesla offered customers to buy tesla with bitcoins, and they say that they won’t convert those bitcoins into fiat currencies like dollars.
Micheal Saylor, the Microstrategy CEO, bought more than 90000 bitcoins, and they are holding them. If millionaires and billionaires are saving billions of dollars in bitcoin, there should be a reason for you to be interested in cryptocurrencies.
Are cryptocurrencies legal?
Cryptocurrencies are now legal in many countries, including world giants like the USA, Canada, Australia, EU countries. Canada has a Bitcoin ETF that is an excellent way of indicating that government supports bitcoins and other cryptocurrencies.
Some countries like China, Russia, India are still not in the crypto space yet, and they sometimes partially support crypto. Soon they will also join the crypto space with many of their investors.
Cryptocurrency education is now popular among wealthy investors. Once people fully understand crypto and what we can gain from using cryptos, investors will invest more into cryptocurrencies.
How do you protect yourself from crypto scams and losses?
First of all, don’t invest the money that you need immediately in the next few months. Learn more about this new space because it’s here to stay. Once you understand the core concepts, it’ll be easier for you to find some legit investment opportunities. There are so many investment frauds and scams. You can easily be a victim if you are chasing behind quick gains. Every investment takes some time to show results, Don’t be a target of getting rich quick schemes.
These are some scams on Twitter. Don’t be a victim of these giveaway scams.
Always look for valuable websites and get investment ideas from people that are experienced in cryptocurrencies.
There are so many youtube channels around cryptocurrencies. Some of them are promoting some coins that have no fundamental value. Be cautious when you are getting investment advice from YouTubers.
What are the ways to learn, buy and earn cryptocurrencies?
Buy & Sell Cryptocurrencies
Binance is the largest cryptocurrency exchange in the world in terms of the trading volume. It has various cryptocurrencies that you can buy, and it supports over 180 countries. Changpeng Zhao founded Binance in 2017.
The trading view is the best way to analyze crypto charts and learn about patterns in trading.
Learn More on cryptocurrencies and Get courses on investment and trading
You can learn many types of courses, and Udemy is the best platform to learn online. You can also teach any skill you have on Udemy and make a passive income.
Recommended Cryptocurrency course
Intelligent Cryptocurrency is a premium education & community membership to help beginners & advanced get started with cryptocurrencies.
The membership includes:
A monthly 25+ page cryptocurrency newsletter
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Based on over 3 years of experience in the cryptocurrency education space, Intelligent Cryptocurrency is arguably the best place to join if people want to learn about cryptocurrencies and have access to the latest information, research and community.