What You Need To Know About Cryptocurrency?

Are you in need of a guide to understand cryptocurrency? Because if you are then surely you might have stumbled across many articles on investing in cryptocurrencies and or trading them actively to make a living out of it. Cryptocurrencies have become an incredible means of business for people and given the fact that the market is only a little over a decade old, it has seriously given some tough time to both the stocks and forex markets.

Wait a minute, does it sound all too complex? Have you not heard about crypto before? Relax, if you don’t have any idea what cryptocurrency is then you have come to the right spot. This guide will help you through and through, dissecting the very meaning of the word ‘cryptocurrency’, the technology behind its application, and how you can start earning money with it.

What is cryptocurrency?

Unlike gold or silver, cryptocurrency is not a physical store of value, it is virtual. Think of cryptocurrency as digital money, all your dollars, euros, or other sorts of Fiat currencies converted into digital counterparts. You must not confuse the idea of cryptocurrency with that of a Standard Bank account or a digital account having your money made available to you in real-time which you can use to make transactions, purchase products, and avail services around the globe.

Cryptocurrency is just like that but completely decentralized. This means that no single entity, state, or organization has any kind of say or control over how these cryptocurrencies are produced, are transacted and the data which is produced in the event of doing so. Cryptocurrencies propose users complete anonymity because these are not regulated or controlled by a dedicated state or a country.

A few examples of cryptocurrencies are Bitcoin, Ethereum, Dogecoin, Litecoin, and many more. Bitcoin is the flagship cryptocurrency as it was the first-ever cryptocurrency to be ever developed. Every crypto that came after it is known as the altcoins. All of these cryptocurrencies work on a principle technology known as the blockchain and protocol is known as decentralization.

What is blockchain technology?

All the transactions that take place in terms of cryptocurrencies happen on a dedicated blockchain. A blockchain is a digital ledger of sorts that streamlines all the transactions taking place for a particular cryptocurrency in the form of blocks. These blocks contain all the data about a specific transaction, details about the sender and receiver, and the amount that was transacted. Suppose you have to send a dedicated amount of crypto to some other person, you would have to sign in to your wallet which is a digital secure facility that contains all your cryptocurrencies.

Extremely secure and fundamentally anonymous

When you sign into that wallet you have to fill in the details of the person to whom you want to send the cryptocurrency, when all the particulars are filled your transaction would transpire then. But to make sure that it is a human that is conducting the transaction it first needs to be validated by multiple computer nodes that are providing the blockchain with the processing power required to authenticate these transactions.

These are actual people called miners that are in charge of validating these transactions by solving complex mathematical equations to make sure that it was a real person who requested this transaction to go through in the first place. When all the nodes of the network have reached a consensus that it was indeed a real transaction the transaction is considered to be complete and the person on the receiving end of the transaction would then be able to receive their crypto in their wallet.

Transactional data gets recorded in real-time

Now the record of this transaction would get embedded into the blocks over the blockchain and be given a dedicated hash number to identify the transaction. All the information present on a blockchain system is made public so that anyone can crosscheck or verify that a certain transaction indeed took place but the private data such as how much crypto was transacted and the information on both sending and receiving parties remain completely anonymous. This adds to the overall security of the blockchain network and the use of cryptocurrencies as a mode of digital money.

Crypto trading, is there a future?

Now that you are completely caught up with what cryptocurrency is and other particulars associated with the technology you must be wondering how can you make some money with it? There are two ways to do so, you can either invest your money into particular cryptocurrencies such as the likes of Bitcoin, Ether, Dogecoin, and multiple other cryptocurrencies and then leave these be for a few years.

Hopefully, the price of these cryptocurrencies would continue to rise and you would be presented with a huge chunk of profit in the end. This is a plain and simple and extremely lucrative way of earning a handsome return on investment but you should know that it is extremely volatile too. The Crypto market has seen multiple trimming along the years and the prices of cryptocurrencies have been slain to half and even into a negative quadrant too but there are chances of growth as well.

A Guide to Cryptocurrency trading and Crypto exchanges

To begin with the crypto investment you require capital and a lot of it or otherwise it is just a futile effort. The next thing that you can do is to become a crypto trader. It is kind of the same thing as a crypto investment but you can become a full-time trader such as investing in cryptocurrencies on a daily or weekly or even monthly basis and then chipping these away when the time is right to earn a profit.

Here you would simply require the services of crypto exchanges or the trading mediums that allow you to convert your Fiat currency into cryptocurrencies. You can sign up with multiple crypto exchanges simultaneously, such as Binance and Coinbase along with others, and start trading in crypto today.

There is no restriction nor an upfront investment capital required, you can begin with $50 in hand or go all the way up depending on how much money you can set aside for the task. As told earlier you would also require a crypto wallet which is a secure digital facility to lock away your cryptocurrencies in as these are extremely secure entities that can safeguard your digital assets better.

It might sound a lot simpler on the paper but in reality, the crypto market is not for everyone because of the extreme volatility among the prices of these cryptocurrencies, the heavy fees that crypto exchanges and wallet services take from you and even the probability of turning a profit is also extremely slim. That is why you need to be logical and understand the whole process before starting.