What is Cryptocurrency?
Cryptocurrency is a digital money system designed to make transactions super secure. The complex tender uses cryptography, a form of secret coding originating from the Second World War to process transactions securely and to verify them. A host of different currencies exist under the cryptocurrency title. The most well-known, Bitcoin, was created in 2009 as a form of digital money and world payment system.
Unlike regular money, the cybercash has no physical presence and differs from regular transactions by using decentralised control as opposed to central banking systems.
In the world of cryptocurrency, the production of currency is generally capped. Bitcoin’s younger brother Litecoin consists of 84 million units, for example, as opposed to its sibling’s 21 million.
The risks of investing in cryptocurrencies:
- Cryptocurrency is subject to minimal regulatory oversight, susceptible to cybersecurity breaches or hacks, and there may be no recourse should the cryptocurrency disappear.
- Cryptocurrency accounts are not insured by the Federal Deposit Insurance Corporation, which insures bank deposits up to $250,000.
- The high volatility of cryptocurrency investments makes them unsuitable for most investors, especially those investing for long-term goals or retirement.
- Investors in cryptocurrency are highly reliant upon unregulated companies, including some that may lack appropriate internal controls and may be more susceptible to fraud and theft than regulated financial institutions.
- Investors will have to rely upon the strength of their own computer security systems, as well as security systems provided by third parties, to protect purchased cryptocurrencies from theft.
Can you earn by buying/trading cryptocurrency?
Similar to the stock market (although not exactly), you exchange dollars, or whatever your country’s currency is for virtual coins or part of a coin (you can buy a sliver of a coin up to eight decimal places).
There are more complicated ways to buy or sell crypto that avoid fees, however using some sort of broker that will include a small fee for every time you buy or sell.
Similar to stocks you can buy a small piece of many, or go all in one two to three coins. There are other brokers that allow you to buy a variety of coins, however, to buy those other coins you’ll have to exchange Bitcoin, not dollars.
How do you make money? Buy and hold. That’s it.
The coins’ worth can be exchanged for dollars using these networks. Some say it’s about timing, others have a longer strategy. When you get ready to cash out, cash out.
If one would have spent $1,000 on Ethereum on March 12th, 2017, at $25 a coin, he/she would have had 40 coins. If one held these coins until, June 9th 2017, one coin would be worth $269. A virtual portfolio would have gone from $1,000to $10,760 . That’s a 10x return. The beauty of it is you can buy just one coin, or a part of a coin. In order to realize these gains, one would need to convert it to cash. Today 20 Jan 2018, one ETH is worth 1.300$.
You can also earn a lot by trading, “buy low, sell high” as we like to say.
How can you trade?
It’s easy, first you educate yourself about how to read charts and risk management. Than you create an account on an exchange and start trading. I use and recommend one of the biggest exchanges: www.binance.com
But there are others too, you can do your research and register on the exchange you believe it’s the best or go with my recommendation based on my research and experience using it.
Good luck and don’t trade base on your emotions.
And also, keep in mind one thing: DO NOT INVEST MORE THAN YOU ARE WILLING TO LOSE!