Open Menu Close Menu

What Is Cryptocurrency and How Can It Help You to Become Rich?

Most probably, you have heard about cryptocurrency at least once so far. Bitcoin made enough noise around it when it turned so many people millionaires. Even though this particular cryptocurrency is falling now, the hype is still present as several other cryptocurrencies exist, and most probably there will be new options.

In general, it is a digital/virtual currency created to serve as a medium of exchange. It applies cryptography to make the transactions safe and confirm them. To specify, cryptocurrencies are restricted entries in a database that nobody can modify until the particular requirements are met.

Origins and Background

Historically, a lot of attempts were made to develop a special digital/online currency. Most of the attempts to replace the traditional currencies as USD and Euros failed. The most common reasons for such failures were fraud, financial issues, and frictions between employees and their management. The modern developers have taken those factors into account while working on the cryptocurrency – cash of the future.

The first innovation was the decision to get rid of the intermediaries and central bank’s support. That is what Satoshi Nakamoto offered back in 2009. That is the founding father of the primary and most known cryptocurrency in the world – Bitcoin. It is a peer-to-peer network, fully decentralized. It means no servers engaged in the transactions exist as well as any monitoring authority. It makes the transactions quicker and fees lower, but not always.

The major issue every payment network faces is a double-spending. Why would a user spend the same amount of money two times? A third-party authority is a solution in case of traditional money. The problem is a user will have to share private details with people he/she does not know.

In case of cryptocurrency, everyone who takes part in the “game” has to do such job. The way to do so is called a Blockchain, which is a public ledger. It contains the entire list of transactions since the very beginning of the particular cryptocurrency. It means all the participants can view the account’s balance.

Each transaction is a separate file made of the sender’s/recipient’s public keys. Those are the addresses of their wallets. The number of transferred coins also matters. It is necessary to confirm the transaction before it appears on the network. Miners are the only participants who have a right to do that. After each confirmed transaction, the miner is rewarded.

Thanks to the rules followed by all participants, the system is solid, and many preventive measures exist to prevent it from falling apart. The point is every “player” agrees to the terms and conditions.

Ways to Purchases Products & Services with Cryptocurrencies

Thanks to the excellent cryptocurrencies’ performance (especially of some), it is easier to find a merchant that accepts such type of money today. Some of such merchants operate online while others stick to the traditional methods of exchange. You may use Bitcoins to pay for the resorts, travels jewelry, applications, and even a college/university program. Unfortunately, you can not do that with other types of cryptocurrencies, but it’s just the matter of time. Keep in mind that now you can exchange those cryptocurrencies for real money. Another way to benefit from earning digital money is to take the best of the special selling websites that deal with more than 20 cryptocurrencies. Some marketplaces accept only cryptocurrencies. They have a lot of advantages for the loyal customers.

Investing in Cryptocurrencies

As you may probably know, many people have turned millionaires thanks to the extreme jump in the value of Bitcoin over the last decade. In November 2017, the price of one Bitcoin reached its peak – more than $7,000. As for the second-place winner, Ethereum, since 2016, its value has gone up by something like 2,700%!

Still, one should keep in mind those are high-risk investments compared to the real-estate, for example. It is not recommended to buy Bitcoins and other types of cryptocurrencies at their peak or, vice versa, when they totally crash. To purchase the coins of your choice, use the basic exchanges like Kraken, BitFinex, or BitStamp.

Storing Your Cryptocurrency

After purchasing a certain amount of coins, the next question is how and where to keep them safe. Luckily, the basic exchanges mentioned above offer various wallet services. Experts recommend choosing an offline wallet on the hard drive for saving Bitcoins and other types of the digital currency. It is secure. Also, it guarantees you full control over the assets.

Look at the way the preferred cryptocurrency behaves at the platforms like Coinmarketcap. Mind the price/value, volume, market cap, and circulation supply. Pay attention to the experts’ forecasts.

Mining: Beneficial or Not?

It is not easy to be a miner as the complexity of the math problems involved in trading cryptocurrencies gets more confusing with each new day. It is a challenge when the cryptocurrency becomes very popular and profitable. Thanks to the process of mining a PC or laptop, it is possible to earn incredible amounts of money! If you are looking for the cost-effective cryptocurrencies to begin with, think about investing in Litecoins, Dogecoins, and Feathercoins. All cryptocurrencies are completely legal, so do not worry about that.

Top demanded cryptocurrencies

  • Bitcoin
  • Ethereum
  • Ripple
  • Bitcoin Cash
  • NEM
  • Litecoin
  • IOTA
  • NEO
  • Dash
  • Qtum
  • Monero
  • Ethereum Classic