The invisible Money
MONEY FROM THIN AIR
A cryptocurrency is a medium of exchange like government issued currencies, that uses cryptography to secure the exchange of digital information and control the creation of new units. It is simply the next evolution of money. As many things in our world transition to becoming digital, so will our money.
Cryptocurrencies are fully self-contained systems that both control and track each unit of cryptocurrency. Each individual unit acts like piece data moving around a network. Units of a cryptocurrency can be as small as $0.01 USD or as big as $1 Billion USD.
Cryptocurrencies use various time stamping schemes to avoid the need for a trusted third party to verify the transactions added to the blockchain ledger. Bitcoin, the most popular cryptocurrency, uses a Proof-of-Work scheme, which is also known as Mining. Other cryptocurrencies achieve the same result with alternative approaches that are often labeled Consensus Protocols or Consensus Platforms.
Bitcoin is the first cryptocurrency to successfully prove the viability of a cryptographic-backed public money supply that is open to anyone. From a market capitalization point of view and public adoption point of view, bitcoin is currently the most popular cryptocurrency. However, there are close to 1,000 different types of cryptocurrencies currently tracked on coinmarketcap.com, the most popular place to discover cryptocurrency prices. Among the many choices available, different cryptocurrencies provide different benefits over others. Some cryptocurrencies such as Litecoin provide faster confirmation times than bitcoin. Newer cryptocurrencies such as ether, refer to themselves as crypto assets and use their native token ether to power a decentralized virtual machine that can execute peer-to-peer smart contracts. Just like when shopping for a new smartphone, the best cryptocurrency is the one that fits your specific need that you intend to use it for.
Bitcoin was introduced in 2009, each bitcoin was valued at about $1 USD. In late 2014, one bitcoin was valued at over $1,000 USD and has spiked as high as nearly $20,000.
Hoping to strike it rich with short timelines and significant returns has drawn the attention of speculators worldwide, causing great desire to learn how to invest in cryptocurrencies and yield returns that crush the stock market. The cryptocurrency market is only less than a decade old and still remains very small in comparison to the global financial markets. These attributes (nascency and size) should remind investors to revisit a fundamental rule of investing: the higher the return, the greater the risk; the lower the return, the lesser the risk.
Cryptocurrencies can be bought at many online providers, however, before you purchase cryptocurrency, make sure that you have a plan on how to store it in a cryptocurrency wallet. Most first time buyers often find the process of buying cryptocurrencies to be challenging.
Trading cryptocurrency is different from buying cryptocurrency. Although many of the places to buy cryptocurrency online, also provide trading services however, the two acts are fundamentally different in nature. The industry of cryptocurrency trading is also beginning to mature and exchanges are providing more powerful tools that closely resemble the same market trading tools commonly found in the capital markets.
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