5 Things You Must Know About Cryptocurrency

  5 Things You Must Know About Cryptocurrency

                                

Cryptocurrency, or digital currency, has been growing in popularity over the past several years, both as an investment vehicle and as a way to make everyday purchases more efficient. If you’re not familiar with this concept, it may be difficult to understand why so many people are investing in cryptocurrency right now – and why some experts think that cryptocurrency is bad news for consumers. Here are five things you need to know about cryptocurrency before you consider whether or not it’s right for you:

• What is cryptocurrency?

(Investopedia) A cryptocurrency is a digital or virtual currency that uses cryptography for security. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation. The first cryptocurrency to capture the public imagination was Bitcoin, which was launched in 2009 by an individual or group known under the pseudonym, Satoshi Nakamoto. Because cryptocurrencies are virtual and do not have a centralized repository, a digital cryptocurrency balance can be wiped out by a computer crash if a backup copy of your holdings does not exist outside of the cloud. In January 2015, Bitstamp became -the world’s first nationally licensed Bitcoin exchange.[10] Being fully decentralized means it has no single point of failure.

• What are the benefits of using it?

The question of whether or not you should use cryptocurrency depends on what you’re looking to get out of it. Are you looking for ways to exchange money anonymously? Check. Are you seeking alternative investment options? Bitcoin is trading at a record high and could soar even higher in 2018. Are you concerned about hyperinflation or other financial issues that might render national currencies useless? If so, cryptocurrencies are probably your safest bet. For more tips on how and why to use cryptocurrency, read our guide to buying bitcoin as an investment.

Is it Safe?: In terms of safety, cryptocurrencies are generally just as safe as (or safer than) national currencies.

• How do you get started with it?

The easiest way to get started with cryptocurrency is through Coinbase, a digital asset exchange company headquartered in San Francisco. They have thousands of satisfied customers and let you buy bitcoin as well as other cryptocurrencies using US dollars, Euros, or another supported fiat currency. If you are new to cryptocurrencies make sure to check out my Top 5 Crypto Tips for Beginners! The main thing to keep in mind when investing in Bitcoin or any other cryptocurrency is that it’s very speculative and volatile.

• What are the risks?

Investing in cryptocurrency isn’t just risky, it can be downright scary. However, there are ways to mitigate your risk and manage your cryptocurrency portfolio wisely. Read on for our top 5 tips for crypto investing.

...Cryptocurrencies aren’t very liquid either: you may find that when you need to sell (or buy) cryptocurrencies quickly, you run into a roadblock at every turn. Be prepared for that—it could happen if prices suddenly plummet or spike unexpectedly. ...Who says it’s anonymous?: It’s also important to note that cryptocurrencies are not anonymous. As part of KYC/AML regulations, cryptocurrency exchanges must collect identity information from customers—including name and address details—before they can trade crypto on those platforms.

• Should you buy into it?

Yes! Just take a look at bitcoin: just one year ago, it was trading at $750, but by November 2017, it has soared to more than $7000. If you’re looking for an easy way to turn your bitcoin into cash—and you’re willing to be patient about how long that might take—check out sites like Coinbase and LocalBitcoins. There are other exchanges out there, too. To learn more about cryptocurrency in general and how to stay safe from hacks or scams, read up on crypto fraud. Whether you decide to buy crypto or not is up to you; just remember that investing in these currencies (even if they do seem too good to be true) comes with the real risk of loss. It may even seem like there are no rules of engagement here—but buying cryptocurrencies isn’t all Wild West gambling.