Investing In Cryptocurrency: A Beginner’s Guide
If you are new to cryptocurrencies, you need to understand the market and how is it used before being able to take any investment decisions.
What is a cryptocurrency?
Bitcoin was the first cryptocurrency to be created and launched in 2009. There are many other cryptocurrencies but the largest is called Bitcoin Cash, which was created in 2017 by a fork in Bitcoin. One way of investing in cryptocurrencies is to buy Bitcoin as it is the most widely accepted one and also the most valuable one. Another way is to buy Ether, the currency of Ethereum, which is an innovative cryptocurrency network. You can also invest in a mining contract to help the mining process. The contracts allow you to ‘mine’ for cryptocurrencies. How can I invest in cryptocurrency? To invest in cryptocurrencies, you have to buy Bitcoin or any of the other cryptocurrencies such as Ethereum and Litecoin. Once the payment is complete, the money is converted to your local currency.
History of cryptocurrencies
Cryptocurrency is a digital asset like an ordinary stock that is completely decentralized and not controlled by a central authority such as a bank or a government. Cryptocurrencies were introduced in 2009 as part of the cypherpunk movement to bring about a new decentralized digital money system which did not involve any banks or other third party intermediaries. Bitcoin is the first cryptocurrency to be released. Cryptocurrencies are mainly used for digital transactions in the form of making online purchases and transfers without the need of intermediaries such as banks or credit card companies. Also, cryptocurrencies are traded on virtual currency exchanges, which act like stock exchanges and they facilitate the trading of cryptocurrencies.
Benefits of investing in cryptocurrencies
Although there are no direct tax benefits for any investor in cryptocurrencies, it also offers investors with anonymity and protection against fraud. There are many different types of cryptocurrencies available in the market such as bitcoin, ethereum, ripple, bitcoin cash and litecoin. Cryptocurrencies have risen in popularity over the past few years. Most investors are investing in cryptocurrencies to enjoy a considerable increase in their investments. When investing in cryptocurrencies, investors do not need to be a tech wizard as a lot of bitcoin trading sites help beginners in investing. One of the best advantages of investing in cryptocurrencies is the convenience it offers.
Bitcoin
Bitcoin is the currency of cryptocurrency market. It is a decentralized digital currency that can be created using computer code. Bitcoin’s original purpose was to securely enable fast and anonymous money transactions. The original blockchain was modeled after the currency system in which the value of a unit of account, the bitcoin, is based on a mathematical formula. The formula is based on the total number of bitcoins that can ever be created (21 million) divided by the current (current maximum) bitcoin price. Monero: This is a cryptocurrency that uses a different blockchain than bitcoin. Monero was created for privacy and anonymity. It can be used for money laundering purposes. Ethereum: Ethereum was created by Vitalik Buterin in 2015.
Ethereum
Ethereum is a cryptocurrency developed in 2013 and is still going strong. It has created a lot of hype about a digital currency. Ethereum is about to be adopted for payment with Mastercard, Ripple and Apple. According to founder Vitalik Buterin, Ethereum is helping finance start-up activities, arts projects, clinical trials, microfinance initiatives, crowdfunding projects, and voting purposes. It is now used as a payment platform, transferrable value, and smart contract. There are two versions of Ethereum – ether (the token) and ethercore. Aether is the coin that is used to purchase ether (the network’s cryptocurrency) in the Ethereum blockchain. It is used in decentralized applications (DApps) and financial contracts. With ether, developers can build dApps.
Conclusion
The cryptocurrency market has shown an impressive growth in the past year, and currently it is trading at approximately $100 billion. As cryptocurrencies are gaining popularity, more people are investing in it. This trend is expected to continue in the near future, which is likely to result in significant growth in the market.