A cryptocurrency is a form of digital cash that is encrypted by cryptography. Most of the cryptocurrencies are based on blockchain technology. The best feature is that it is void of any central or regulating authority. Hence, immune to any kind of government or international influence.
Well, the above paragraph might have already confused you with some terminologies. No worries, this guide contains sufficient knowledge so you can make a clear mind about cryptocurrency and how does it work.
You may have heard about the most famous version of cryptocurrency the Bitcoin and Ethereum. However, there are now 100+ coins in the crypto world.
How does cryptocurrency work:
A cryptocurrency exchange is 100% digital and encrypted. Unlike Dollars and euros, there is no authority to regularize it. however, the users are continuously increasing the amount via mining.
Bitcoin is the first-ever cryptocurrency hit the market. Blockchain ensures the integrity of a cryptocurrency.
What is blockchain:
It is an open ledger that tracks the transaction worldwide. For example, it is like a digital checkbook that keeps all the cryptocurrencies in order. Every transaction is like a “block” which is linked with its previous transaction called a “chain”, hence, the word blockchain.
How many cryptocurrencies are there and what is the net worth:
As we have already discussed the top-of-the-line cryptocurrencies. But there are many which can buy under a cent. Yes, the market is full of coins, and it is increasing day by day. Not to forget there can be huge dips in the market depending upon certain factors. Here is the list of marketing capitalization of different currencies:
- Bitcoin= 735.3 billion dollars
- Ethereum= 324.2 billion dollars
- Tether= 61 billion dollars
- Binance coin= 57.5 billion dollars
- Cardano= 54.6 billion dollars
How cryptocurrency gained so much popularity:
No wonder it is a common question that why someone would want to invest in a digital currency. Without any trace, paper proof, how can people trust a digital coin? Here are some reasons that why it gained so much popularity in recent years.
- All the billionaires in the world are setting the bar so high and buying all the coins before it gets more expensive. For example, Elon Musk, a popular and well-known personality who owns the two biggest projects; Tesla and Space X claims to have a huge number of bitcoins.
- Elon Musk declared that people could buy a Tesla car with a bitcoin. However, in a recent tweet, he said that the company will not accept a bitcoin in exchange for a Tesla car because the mining was using fossils. The whole concept of Tesla is to make eco-friendly electric cars.
- It is a universal currency; no rules and regulations are applied for its transactions. Therefore, the use of banks and their irrelevant terms are of no use for cryptocurrency.
- Blockchain technology is a more secure and centralized method of tracking as compared to other records.
- There is a potential that you can get profit out of it. Even many people are trading every day and cashing out money.
- There are multiple secure apps you can use to trade cryptocurrency.
- Many people take it as the money of the future.
Tips to invest in cryptocurrency:
No doubt investments are risky, and many people believe that investing in cryptocurrency is even riskier. Although, digital currency is the fresh and secure method of making a handful amount of profits. Nonetheless, proper research and knowledge is the basic need. Without it, you are most likely to get scammed or robbed. Recent research says that the cryptocurrency market might hit several trillion in few years. If you plan on investing in the cryptocurrency market, the following are some tips for you.
Know about exchange platforms:
Before investing know about all kinds of platforms. As the market grows, multiple apps provide crypto exchange services. Not all of them are authentic and well organized. Moreover, the transaction fee of every app varies. Search properly before choosing an app. One of the most popular apps is Balance, it is fully authentic, and no case of scam or misuse is ever reported. There is a proper biometric way of making an account and depositing money.
Research about coins:
As is mentioned already, there were only a few coins in 2010 but now after a decade. The number is increased exponentially. You can never know which going will rise and which can dip at any time. Even some of the meme coin owners scam and run with the money. You can just follow or listen to a friend’s advice or read on paper and simply buy a coin.
Look for a detailed history of any coin you are interested to buy. Another great approach is to check out the dips of at least 6 months back. Never invest in a single coin, if you have big capital. Invest in different coins so even if one goes down, you still have other coins.
Learn to hold:
Once you have invested, even a little amount. Do not sell off and cash out after a minor dip. Crypto market always goes to dip once after few months. You can search more about it and have an exact idea.
Is it legal to buy cryptocurrency?
It depends on the area of your residence. Recently China has banned cryptocurrency due to overuse of electricity and other resources, similarly, Iran and Pakistan have not legalized cryptocurrency 100%. Although, the rest of the world is openly trading and mining cryptocurrency.
Should you invest in cryptocurrency?
A good way of investing in the crypto market is spending your additional money. Think of it as it is gone for few years. Only then, you can make a profit and get something out. Do not cash out soon. This is the only code you should follow before investing.
As the world is digitalizing, no wonder currencies would too. There is no doubt in the authenticity of cryptocurrency, and it might soon become an international medium of exchange. Moreover, if you are stressed about the current dip of May. You can always own a pet and relax your mind. No worries if your landlord does not allow pets, you can get an ESA letter online and live with your pet.
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