Cryptocurrencies have been a very hot term in the financial markets for many years. It is also one of the most selected assets by investors. So what is cryptocurrency? Should we invest in cryptocurrencies? Just read the article below reference.
The history of cryptocurrency
In the 1990s, as technology began to explode, people made constant efforts to create digital currencies, such as systems like Flooz, Beenz, and DigiCash. These projects were once known in the market but they quickly went into the past for several reasons such as fraud, financial problems, even due to internal conflicts of the development company.
Most notably, all contemporary systems adopt a "Trusted Third Party" approach, that is, the companies behind the system to validate and expedite transactions. So the collapse of companies means the disappearance of cryptocurrencies.
Nearly two decades later, an anonymous programmer (or a programming group), aliased as Satoshi Nakamoto, introduced Bitcoin. Satoshi described this as a "peer-to-peer electronic" system. The system is completely decentralized, with no server or third party control present. This idea is similar to the P2P network used to share data. After the advent of Bitcoin, a series of other cryptocurrencies appeared, designed to exchange currencies for fiat money.
Cryptocurrencies are run via Blockchain - a public ledger that records every transaction in a network accessible to any participant. Because of that, everyone in the network can query balances of all accounts.
The cryptocurrency network relies on the absolute consensus of all the components in the space to validate balances and transactions. If the nodes of the network do not accept, the system will stop working. However, many rules are built and programmed into the system to help prevent this risk.
What can we do with cryptocurrencies?
- Buying goods
There are many stories in the world - online or offline - that accept cryptocurrencies as a valid form of payment. From big online retailers like Overstock and Newegg to local shops, bars, and restaurants. Bitcoins can be used to pay for hotel rooms, book flights, buy jewelry, buy applications, computer equipment, and even a university degree. Recently, Apple has supported the payment of 10 different cryptocurrencies on AppStore.
In the world, there are currently two markets that accept cryptocurrency payment: Bitify and OpenBazaar.
- Investment method
Many believe that cryptocurrencies are one of the hottest investment opportunities available today. A lot of people have become billionaires thanks to speculation in cryptocurrencies.
Bitcoin is one of the most recognized digital currencies to date as well as one of the most invested coins.
Ethereum, the second most valuable cryptocurrency in the market, is recognized as one of the fastest-growing currencies ever.
However, it should be noted that cryptocurrency is an investment with a very high risk. The market value of cryptocurrencies fluctuates, unlike any other asset class. Also, the lack of control of the legal space has led to many scams.
As with other investments, you need to pay attention to the market value of assets and all the volatile news surrounding the market. CoinMarketCap is one of the most comprehensive websites to track the fluctuations in price, volume, circulating supply, and market capitalization of most cryptocurrencies.
- Mining cryptocurrency
Miners are also an important part of the cryptocurrency network, and, as speculation, mining is also an investment. Miners will provide services to their community. The miner team will contribute to the power of computers to solve complexly encoded puzzles to confirm transactions and store them in a public distributed ledger called Blockchain.
One of the interesting things about the mining field is that the difficulty of the puzzles will continuously increase over time, proportional to the number of people involved in the process of solving problems. So, as a cryptocurrency becomes more and more popular, many people will try to exploit it, and the process's difficulty will increase.
Currently, Litecoin, Dogecoin, and Feathercoin are the best cryptocurrencies in terms of cost-effectiveness.
But how to make miners most effective? The higher the computer power, the better chance of solving a problem on Blockchain. Once miners have solved a problem, they will receive a reward with a transaction fee.
- Accept payment
If you own a business and are looking for a new set of leads, accepting cryptocurrency payments can be an interesting solution. Profit from cryptocurrencies has never been so high. Along with the increasing popularity over time, the crypto ATMs are also competing like mushrooms. According to data from Coin ATM Radar, there are currently about 4,415 ATMs in 58 countries around the world.
First of all, you need to promote to customers that your business is accepting payments. Payment can be made via a device, phone app, or simply wallet address via QR code.
Many different services help you accept cryptocurrency payments. For example, CoinPayments currently accepts more than 75 different digital currencies and takes only 0.5% commission for a transaction. Various popular services like Cryptonator, CoinGate, and BitPay currently only accept Bitcoin payments.
In the United States, Bitcoin and other cryptocurrencies have been recognized as a convertible currency, which can act as a means of payment, similar to the current card payment methods.
The legal of cryptocurrencies
As cryptocurrencies are becoming more popular than ever, the authorities, tax authorities and lawmakers around the world are trying to embrace the idea of cryptocurrencies as well as find ways to apply them to the regulatory framework. current reason.
Many issues are surrounding the cryptocurrency in its nature as well as its independent use. The house is responsible for worry that cryptocurrency will be used by fraudulent businesses. Besides, the use of cryptocurrency to launder money and evade taxes also exists in space.
In November 2017, Bitcoin and other cryptocurrencies were viewed as illegal payment methods by Bangladesh, Bolivia, Ecuador, Kyrgyzstan, China. The rest of the countries have not yet placed out-of-law cryptocurrency, regulations are quite diverse depending on the country.
The most popular cryptocurrencies today
- Bitcoin - The first cryptocurrency in the world.
- Ethereum - A pre-programmed cryptocurrency that allows developers to build different distributed applications and technologies other than Bitcoin.
- Ripple - Ripple does not use Blockchain to achieve consensus in transactions.
- Bitcoin Cash - The forked version of Bitcoin is backed by BTC mining company and miner ASICs. The coin has surpassed the top 5 largest capitalized cryptocurrencies just a few months after being formed.
- NEM - This currency uses the Proof of Importance (PoI) algorithm. This algorithm requires users to own a certain amount of coins to be able to buy new coins.
- Litecoin - This is a forked version of Bitcoin, but unlike BCH, this coin creates 4 times faster block and has 4 times the maximum coin amount: 84 million
- IOTA - the cryptocurrency's breakthrough ledger technology is called "Tangle" and requires the sender in a transaction to perform a Proof of Work to prove the two transactions. Therefore, IOTA has excluded the miner factor from the process.
- NEO - This is a smart contract network that underpins all types of financial contracts and decentralized development applications.
- Dash - An open-source cryptocurrency, which is an autonomous decentralized organizational shape (DAO) operated by a collection of users, called a "master node." This cryptocurrency allows for faster dash sales and leaves no transaction traces.
- Qtum is an open-source Blockchain application of Proof of Stake (PoS). Qtum's core technology incorporates a branch of Bitcoin Core, the Account Abstraction Layer.
- Monero (XMR) is a secure, private, and traceable monetary system. XMR uses a special crypto algorithm that makes XMR transactions 100% guaranteed to be impossible to link and trace.
- Ethereum Classic (ETC) is a cryptocurrency developed and created from Ethereum's Blockchain technology.
How to store cryptocurrency?
To store cryptocurrencies, you must use a cryptocurrency wallet. There are many types of crypto wallets available for different purposes. If your top priority is privacy, you can simply use a paper or a hardware wallet. This is the safest way to store crypto funds. Also, the market offers "cold" (offline) stored on the hard disk or online wallet, linked to exchanges or independent platforms.
How to buy cryptocurrencies?
Many opinions are surrounding buying Bitcoin. For example, there are currently nearly 4,415 ATMs in 58 countries worldwide. Besides, you can also buy BTC through cryptocurrency exchanges, trust funds, or even the OTC market for BTC.
For other cryptocurrencies, buying options are not as diverse as BTC. However, there are quite a few exchanges where you can convert cryptocurrencies into fiat money or Bitcoin. Direct transactions are also a popular way.
The list of crypto experts
- Vitalik Buterin (@VitalikButerin) - The genius behind the mayor's second most valuable cryptocurrency today - Ethereum
- Andreas M. Antonopoulos (@aantonop) - Bitcoin devotee and author of "Mastering Bitcoin".
- Charlie Lee (@SatoshiLite) - Founder of Litecoin
- Nick Szabo (@ NickSzabo4) - Szabo's expertise in cryptocurrencies dates back to 1998 with his proposal of BitGold, the precursor to Bitcoin.
- Brian Armstrong (@brian_armstrong) - Co-founder and currently CEO of the largest U.S. cryptocurrency exchange Coinbase.
- Brock Pierce (@brockpierce) - Co-founder of Blockchain Capital.
- Barry E. Silbert (@barrysilbert) - Founder and CEO of Digital
- Don Tapscott (@dtapscott) - President and CEO of Tapscott Group, Inc.
- Erik T. Voorhees (@ErikVoorhees) - Founder and CEO of ShapeShift.io.
- Laura Shin (@laurashin) - Forbes editor and co-supervisor reporter for Forbes Fintech.
- Alex Tapscott (@alextapscott) - Co-founder and CEO of Blockchain Research Institute.
- Roger K. Ver (@rogerkver) - Bitcoin angel investor.
- Jihan Wu (@JihanWu) - Co-founder and director of Bitmain Technologies. Ltd.
- Gavin Andresen (@gavinandresen) - Science expert at Bitcoin Foundation and Bitcoin Core developer.
- Adam Back (@ adam3us) - Co-founder and chairman of Blockstream.
- Oliver T. Bussmann (@obussmann) - President of Crypto Valley Association and founder of Bussmann Advisory.
- Meltem Demirors (@Melt_Dem) - Development Director at Digital Currency Group.
- Fred Ehrsam (@FEhrsam) - Co-founder of cryptocurrency exchange Coinbase.
The largest forum about cryptocurrencies
- Cryptocurrency Talk
- Bitcoin Talk
- Bitcoin Wealth Club
- BTC Warriors
- Bitcoin Subreddit
- Ethereum Subreddit
- Litecoin Subreddit
- Cryptocurrency Subreddit
- Update information about the cryptocurrency market
Currently, there are many tools available for you to track and keep abreast of the volatility of the cryptocurrency market. You can use Coinmarketcap.com, the most popular website that tracks Bitcoin and most altcoins in the world. The website provides information about price fluctuations, market capitalization, and trading volume in a day for traders.
Besides, the exchange provides you with services to track your portfolio. Large exchanges like Huobi also provide you with a separate indicator for you to monitor your asset portfolio.
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