There is no doubt in anyone’s mind that the cryptocurrency world has undergone a whirlwind of change. One such cryptocurrency exchange platform can attest to this fact due to the number of users that signed up.
One can expect all kinds of fluctuations. Take Bitcoin for example. It peaked massively during December 2017 at an all-time high of just over $19,000 only to crash to a low of $6,000 during April 2018. Currently, the cryptocurrency market is so volatile that you can expect fluctuations of $1,000 up or down in any week.
You may remember the ICO craze where Google, Facebook, MailChimp, and Twitter banned cryptocurrencies because of the amount of deceptive and misleading claims being made. The mere ability to make millions overnight through ICOs attracted bad actors who were looking to profit from uneducated investors.
Thankfully, new ICOs made their way into the market during 2018. As of now, there are over 1,600 coins and tokens listed on various exchanges.
Some say that the ability to profit from cryptocurrencies has passed. However, there are still opportunities to benefit from ICO investing and crypto trading. It goes without saying, that there will be days when the market will experience volatility and unexpected swings. This is where one can make the most significant gains.
If you take it that George Soros felt that cryptocurrency is just a bubble that would burst. Just recently, he changed his mind and plans on trading with this commodity.
What we’ve also seen are investment bankers who left their jobs from Wall Street and set up crypto funds for themselves.
Note that this article is meant for newbies to the cryptocurrency market and not meant for fundi traders.
After all, you want to make smarter decisions regarding your digital currency investments.
Things are looking up in this game as billions of dollars have been plowed into blockchain startups by individuals who left Wall Street and venture capitalists.
As an investor or trader, you will need a basic understanding of cryptocurrencies as well as the underlying technology that drives it.
There is a lot of noise, hype, and misinformation about cryptocurrencies that one has to sift through, which proves to be overwhelming and result in poor investment decisions.
What cryptocurrency does is to allow two individuals to safely and securely transfer fund to each other using different locations without the need to depend on a bank or government entity in a digital format.
Cryptocurrency takes the form of:
- Platforms such as Ethereum to serve as a place where other companies or tokens can build on top of through smart contracts and decentralized apps.
- Other currencies such as Monero (XMR) to solve the problems of traditional fiat currency that focuses on being private, secure, and untraceable.
- Companies or apps who make it their aim to solve particular problems to do with blockchain. One example is a company by the name Golem who creates a global market for idle computing power to use with blockchain.
What comes to your mind when you hear people chat about tokens and coins? Do you think of a gambling house? In the digital world, it serves as shares in which you can trade on the stock exchange. However, unlike the shares we know about that can take on a physical form, these don’t. What happens is that you get access to using a specific product or service.
Bitcoin is a cryptocurrency being used as payment in exchange for services or goods. Any transactions that transpire are added to the public ledger or blockchain through nodes on the network with a said agreement in place that is made possible through what they call a proof of work system (mining).
Miners offer their computers to help solve mathematical equations so all sort of transactions can be verified on the blockchain. In turn, they are compensated with bitcoins.
Now that we mention blockchain, it would be good to understand its role in all of this.
Essentially, it is database architecture of records found on a public ledger that contain a host of transactions that have been implemented and shared among various parties who participated in this endeavor.
Every transaction within the public ledger is verified by the majority who utilizes this system and have given their consensus. Once it has been recorded within the blockchain, the transactions cannot be erased or tampered with.