Since Satoshi Nakamoto founded bitcoin in 2009, the entire cryptocurrency market has flourished into the now saturated market we see today. At well under $1.00 per bitcoin in 2009 to an all-time high of just under $20,000 in February of 2017, it is clear how volatile and uncertain the crypto market can be. Over the past few years, there has been a major influx of new cryptocurrencies coming onto the scene, offering an application for almost anything. From in-app mobile purchases to coins with almost no practical value, which are just offered for fun or as a collectible, the list of available coins to buy is endless. In today’s world, it is important to understand how a cryptocurrency works and how to use it responsibly.
We have gathered all the information you need to know about cryptocurrencies and what the future holds for them.
How does it work?
Cryptocurrency was designed as a decentralized digital asset that can be used as a medium of exchange. The system that cryptocurrencies function on is known as a blockchain. A blockchain is a record of all the transactions on the crypto network known as blocks. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction date. In simpler terms, a block is just a recorded ledger of all transactions being made on the crypto network.
How do you invest?
Buying or investing in cryptocurrencies has become a very popular trend and is becoming even easier for anyone looking to invest. The recent development of multiple online crypto exchanges makes the process simple by allowing deposits of fiat currencies onto the platform and then using it to purchase, sell, or trade cryptocurrencies. Many of these online crypto exchanges also include an online wallet that is used to store digital assets.
What are the concerns?
Some main concerns many people have when looking at investing in or buying cryptocurrencies is the extreme volatility in the markets. Some days the price movement of bitcoin can be hundreds of dollars, while other days it sees no movement at all. There are many reasons why the price is so volatile, much of which can be associated with fake news in the industry. Another common reason behind the volatility is the banks or world government’s decisions to regulate the crypto markets or accept cryptocurrencies as a means of payment.
Another important problem plaguing the crypto markets is scams and hacking. There are many exchanges out there that are scamming innocent people into depositing money into their platforms and then stealing it. When looking to invest in any cryptocurrency, always make sure that the proper research has been done on the exchange you have chosen before purchasing the cryptos. Exchanges have become very susceptible to hackers who target people’s virtual wallets on the exchanges platform to steal their cryptocurrencies.
Cryptocurrencies are yet to see major adoption into our everyday lives and many people are still very skeptical of it. There have been some small developments in terms of using cryptocurrencies as a payment method for everyday things such as shopping. However, nothing ground-breaking enough to change how things are done, at least for now.