For first-timers, cryptocurrency may sound like an extremely complicated thing. Although it has existed for more than a decade already, some people may not have a full understanding of the matter.
The emergence of Bitcoin in 2009 has grabbed the attention of investors and has stirred the world of tech and finance industries. During those early years upon introduction, people seemed to ignore it until 2017 where it started to rise up to $19,783. Since then, people have wanted to be part of the trend.
Since the conception of Bitcoin, thousands of alternative coins have joined the competition in the digital space. Ethereum, Ripple and LiteCoin also became popular names. Digital wallets and cashless payments have become convenient features of cryptocurrency.
What is cryptocurrency?
As a beginner, you must fully understand the meaning of cryptocurrency and its characteristics. Cryptocurrency is known as a form of digital or electronic currency that offers the same utility as our fiat currency. It can be used to purchase products and services. In addition, it can also be converted to other forms of currency.
Using blockchain technology, cryptocurrency’s decentralised and distributed ledger allows the recording of data and transactions. It enables you to make financial transactions and perform exchanges without the need for intermediaries. Also, unlike fiat money, cryptocurrency is not issued, distributed or regulated by the government or central authorities.
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History of Cryptocurrency
The concept of cryptocurrency was outlined in 2008. It was designed by a person or group of people under the pseudonym Satoshi Nakamoto. The first-ever cryptocurrency was named Bitcoin.
It was first released in 2009 where supporters and users began mining and exchanging the currency.
It was 2010 where the first-ever successful trade using cryptocurrency happened. An anonymous person used 10,000 Bitcoins to purchase two boxes of pizza. Since then, several cryptocurrencies like LiteCoin have emerged. The era of cryptocurrency began where its utility expanded. It was only mined before until people started to appreciate its value and made crypto the newest form of payment.
WordPress was the first major merchant to accept Bitcoin as payment for their products and services. Since then, large corporations like Tesla, Microsoft and Expedia have followed. And recently, over a thousand merchants and retailers started adopting cryptocurrency as payment.
How many cryptocurrencies exist in the market?
According to CoinMarketCap.com, there are more than 13,000 cryptocurrencies in the market today. So as a beginner, you have a thousand names to choose from. These include alternative coins and stablecoins. As of October 2021, if you sum up the total value of all cryptocurrencies out there, it would be approximately around $2.5 trillion. The most popular cryptocurrencies or the so-called crypto giants are Bitcoin, Ethereum, LiteCoin, Ripple, Binance, Tether, Cardano, Dogecoin, XRP etc. If you sum up the value of all these major names, it would cost around $1.2 trillion.
Are cryptocurrencies worth investing in?
Although cryptocurrency has recently shown an all-time high price of $62,000, it still remains a speculative investment for many people. Because of its volatility and instability, critics regard the currency as “fool’s gold”.
For those who want to consider cryptocurrency as an investment, you must always remember that it has an unstable nature. For instance, in 2017, its price reached $20,000, followed by a sudden drop of $3,200 a year later. In April 2021, it gained an all-time high price of $62,000 and remained at that range just recently. Whether the price will suddenly drop again, no one really knows.
How to purchase cryptocurrency?
Some cryptocurrencies like Bitcoin can be purchased using fiat currency or US dollars. However, there are exceptions where you can only buy them using another cryptocurrency.
In order for you to successfully purchase cryptocurrency, you need to download a crypto wallet app. These types of wallets enable you to store your Bitcoin or crypto assets. You can transfer money to your account, which you can use later on to buy cryptocurrency.
Are they legal?
Although some countries like China and Turkey have banned cryptocurrency, its legality in the U.S. is not a question. Cryptocurrency is widely accepted and adopted in many parts of the world. As of the moment, the senate in different regions is discussing the regulation of cryptocurrencies to this day.
Should you buy cryptocurrency?
Whether you should buy or not, the decision is in your hands. But before you take measures, you must always remember that cryptocurrencies are unstable and volatile in nature. Like any other investment, it can be risky and requires you to have effective managing strategies and skills. If you really want to push through, you must first research and ask for experts’ advice.