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What you need to know about CryptoCurrency

What is CryptoCurrency?

Cryptocurrency or digital currency is the new form of currency that has become the topic of conversation in recent weeks. You hear some types of digital currency being called “coins” and others being called “tokens”. There are even digital coins being called “pyramid scams”. The cryptocurrencies go by many names, such as BitCoin, LiteCoin and Ethereum. They are real, yet you can’t touch or feel physically. Currently, there are over 1,300 of them!

Many people are speculating that some of the many cryptocurrencies will grow to replace the paper money (fiat currency) as digital currency stored in your wallet or purse. Others think of them simply as a passing fad or a bubble, that will leave many investors regretting their investments.

Change The Way You Think about Money!

With cryptocurrency, changing the way you see money may include:

  • Researching any new coin before acquiring it, to avoid the every growing pool of scam coins.
  • Storing coins in your digital wallet and keeping track of the current value of those coins.
  • Paying for things by sending coins to the recipients digital wallet address similar to sending an email.
  • Creating backups of your wallet file, wallet address and secret key.

“Digital coins” are now stored in a “digital wallet” and instead of keeping your money in a bank. Digital Wallets are programs you download onto your local computer that store the specific currency’s blockchain which contain all existing transactions to date. These wallets have a unique hash number assigned to it, which allows others to send coins directly from sender to recipient. There is no need for anyone in-between asking for a fee or knowing either parties identities. Digital Exchanges are sites like CoinBase, that allow you to store wallets and also buy and sell currency. You may also opt to keep some of your coins online, in a place called a Digital Exchange. You can think of these digital exchanges like banks, where you store your money in several accounts and sometimes you can exchange foreign currency.

Is it Safe?

With digital currency it is easy, and hassle free, to send “money” to anyone throughout the world. Transactions are anonymous and secure. Everyone who uses cryptocurrency has a copy of the ledger. The ledger is simply the blockchain for the specific currency (i.e., BitCoin, LiteCoin). This ledger keeps a record of all the transactions, very similar to a database. But this database only lets you write but does not let you edit! This provides a measure of security with using cryptocurrency. It’s not easy to “steal” someone else’s digital currency or even forge currency for free. Someone can’t just add transactions onto the blockchain, giving themselves extra coins. All transactions are verified by several computers on the network. These special computers are called “miners”. These miners are the closest thing on the blockchain to being any form of centralization. Using digital currency does not require the need to be centrally regulated as is the case with existing fiat currencies.

What are some of the Coins?

Most people have recently started paying attention to cryptocurrency this year, with all the news of the amazing monetary gains. One of the first, and most popular, of the many cryptocurrencies being talked about is called BitCoin. BitCoin was created by a person named Satoshi Nakamoto. In his white-paper (a report or proposal on a particular topic of interest), he explains how using blockchain technology, one could create a secured method of storing transactions. The blockchain technology allows BitCoins and other digital coins to record transactions.

Some of the other popular crypto currencies LiteCoin, Ethereum and Ripple just to name a few. Both Ethereum and LiteCoin came on the scene at the tail end of 2016, and already have shown great returns. Its creator, Charlie Lee, envisions continued growth for LiteCoin and recently left CoinBase (a popular cryptocurrency digital exchange) to focus on LiteCoin’s growth. Ripple is relatively new and I am still watching its performance. Ripple is said to be supported by a few banking institutions. Banks using the Ripple network for their bank to bank transactions could see a reduced cost with those transactions.

Why get into CryptoCurrency?

I considered crypto currency as a sound investment after observing its growth since 2016. It has definitely resulted in high returns on investment.The value recently jumped 10x since the beginning of the year (2017). This kind of growth could easily cause anyone to pause and be concerned. Is this just a bubble waiting to burst, or an opportunity of a lifetime? Using a mobile app called Coinbase, anyone can  start tracking and purchasing Bitcoins, LiteCoins and also Ethereum. Just one year ago today, the value of 1 BTC was about $731, but as of the writing of this post, 1 BTC is now over 10,000!

Regardless  of what you think about crypto currency, it has proven to be a valuable asset to own and hold, as well as a currency to transact business. Some of the coins being put out are actually “tokens”, which are purchased and used to access specific networks in order to take advantage of certain blockchains. With currently over 1,300 coins available on the market, you have to take the time to research each one to see if its a currency, token or a scam. But now is the time to get in and invest for the future.

 

If you feel this article has helped you better understand CryptoCurrency, then send some crypto!
LTC: LPNdm672aT3cJPv9ZBXkMLfUst6o32d4B6
BTC: 1GxNzwyKZyDDsCMVP6M78dj8Lt7drnDpGB
ETH: 0xDA99790846A78Fe1DD4fc47559CB6510AEc46EF7
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