The name "crypto" gives a picture of something encrypted with specific figures that are classified and can only be accessed through a particular channel.
Currency is a general value estimation, the rate used to measure value, represented mainly by banknotes that have been accorded a particular value, used as exchange for goods and services.
Considering these two terms,
What then is Cryptocurrency?
Cryptocurrency is a digitally encrypted form of payment that is available for making purchases online; this currency exists independently without the need for central monetary authority like the government and banks.
These currencies are created by cryptographic techniques that enable people to buy and sell online with ease.
This currency is strictly encrypted such that there is no need for third party involvement,
One of the most popular cryptocurrencies is bitcoin.
Bitcoin is the most used and familiar cryptocurrency that has been in circulation all over the world.
People are subscribing to these digital currencies because of how easy and efficient they can be.
Cryptocurrencies like bitcoin use a system of operation known as the blockchain.
The blockchain collects information from both ends together in groups known as blocks that hold data sets and structure them into chunks that are strong together. It is structured so that no set of people has control, but everyone will collectively have absolute control over their data,
Blockchain transactions are irreversible once a transaction is done; it is permanently recorded and viewable to everyone.
How do I invest in cryptocurrency?
To buy cryptocurrencies,
You need to know certain things; one of them is that you need to have an online wallet, wall app that will hold your currency. Remember, unlike the local currency that you can hold onto or keep in a specific position, cryptocurrency can not be seen or handled, so we need an online wallet that will become our link with this invisible currency; the wallet can relate with is currencies and can weigh the exact value of the currency.
Then secondly, you can create an account on an exchange; you will pay in real money in exchange for the currency,
You will pay in real money to the seller’s account, but currencies like bitcoin.
For a beginner, you can contact a trusted online broker or open a brokerage account where you can deposit money and purchase brokerage; it is with this brokerage that you can carry out exchange for stocks or cryptocurrencies; your online brokerage is what we call buying power because it represents the value of funds you have transferred and you will carry out transactions at that value.
A broker is an online agent who is a mediator between a seller and a buyer. He is acting as the trustee for australiansuper, like what you will call an accountant; he understands the steps, so he stands for you, so at the end, he earns a certain percentage when the purchase is complete.
Few online brokers that offer Cryptocurrencies
- Robin hood
- Sofia active investing and trade station
Pure Crypto Exchange
- Coin base
- Gemini Kraken
Note: the two won't give you access to stocks and bonds but they have a better selection of cryptocurrencies and more wallet functionality.
How many cryptocurrencies do we have?
Research has shown that there are over 16,000 different cryptocurrencies that are traded publicly.
Yeah, you heard that right! 16,000.
Here are some of the top cryptocurrency list:
- Bitcoin Cash
- Binance Coin
- Ethereum Classic
- USD Coin
And there are many more of them, being used all over the world.
Why is cryptocurrency so popular?
People generally invest in cryptocurrency for different reasons, but whatever the reason might be, the primary drive for parading these currencies is always the drive to make much profit.
- Some people believe currencies like bitcoins are the future currencies used worldwide. they think that the world is evolving and everything I am, going digital, and then here in a short while, there be no need for banknotes anymore
- There was a time when education was was tied to a specific location called the school, you had to walk to a distance to enroll and fraternize with other students to gain general knowledge taught to you by a teacher,
- But now one can sit down in the comfort of his bed and apply for a school online, attend lectures online and get his certificate online, these changes are aiding the fast spread of cryptocurrencies.
- People are happy with the fact that central banks are not in charge of managing the cryptocurrency money supply, in every country, there is a predominant currency, each different in names and values,
- Central banks tend to reduce the value of the local currency through inflations but the value of cryptocurrency cannot be altered by the central bank, nor will any country reduce its value.
- People like that fact, and they are investing so much in it. for example, the exchange rate from dollar to naira in the black market is $1 = #560; this exchange rate is very frustrating, so investors feel more Secure using the cryptocurrencies as they hold the same value everywhere and will save you the stress of having to change currencies to purchase in a foreign country.
- Currencies like Bitcoin can be more secure than the traditional method of payments; because of the blockchain system, people feel more secure using Cryptocurrencies than the rigorous process of making standard payments.
- You will find challenges transferring dollars to a rupee account, you will need to follow different channels and third-party apps like Paypal and the rest of them who can take their percentage before sending you what is left, this way you are not in charge but with bitcoin, both ends are in complete control of their funds and can parade it anyhow they want.
- while others are not interested I'm the long time acceptance of the digital currencies, they see it as a quick way to make a profit because of the rising and falling of the value, they buy because they believe it will increase in value in a short while and they will sell it at a higher rate and ake double or ore profit.
Is it legal?
In the USA, there are no questions as to whether it is legal or not,
So the question of legality depends on the individual country.
The government of China banned the use of any digital currency in the country, so I guess the question is, is it legal in my country?
Is it a sure and safe investment?
Cryptocurrency is a risky investment because many see it as mere speculations and not a solid investment,
Cryptocurrencies doest not generate cash flow,
So if you must profit from it, then someone has to pay you more than you paid for the currency,
Currencies need stability so that a merchant can have a fair price for goods.
But the constant shift in value makes cryptocurrency unreliable.
And there are many precautions that one has to take to avoid falling into the hand of swindlers, especially if you are a beginner in the cryptocurrency field.