This is one of the most frequently asked questions out there. What is cryptocurrency? To make it simple, cryptocurrency is a digital version of money where the transactions are done online. A cryptocurrency is a medium of exchange just like your normal everyday currency such as the USD, but designed for the purpose of exchanging digital information through a process known as cryptography.
The first ever-successful cryptocurrency emerged from the invention of Bitcoin, by Satoshi Nakamoto. This was then followed by the birth of other types of cryptocurrencies competing against Bitcoin.
Why Cryptocurrency Investment?
The reason why cryptocurrencies are such in demand right now is because Satoshi Nakamoto successfully found a way to build decentralized digital cash system. What is a decentralized cash system?
A decentralized system means the network is powered by its users without having any third party, central authority or middleman controlling it. Neither the central bank, nor the government has power over this system.
The problem with a centralized network in a payment system is the so called 'double spending'. Double spending happens when one entity spends the same amount twice. For instance, when you purchase things online, you have to incur for unnecessary and expensive transaction fees. Usually, this is done by a central server that keeps track of your balances.
Apart from cryptocurrency being very secure and is run through a decentralized network, there are other properties which projects why cryptocurrencies may be the most talked about topic in town. It is now viewed as an emerging investment vehicle.
Have you heard of Erik Finman?
He is the teenage Bitcoin millionaire who started picking up Bitcoin at only $12 a piece back in May 2011, when he was just 12 years old. He received the Bitcoin as a tip from his brother and a $1000 gift from his grandmother.
He now reportedly owns 403 Bitcoins, which holds a value of roughly $2,600 where it has accumulated to a stash of $1.08 million and change.
What Can Cryptocurrency Be Used For?
Cryptocurrencies can be spent for different purposes and the best part is, all transactions are completed online! There are 3 different transactions that can be performed when using cryptocurrency:
1.Bitcoin Trading
Bitcoin trading can be very profitable for both professionals and beginners. The market is new, where arbitrage and margin trading is widely available. The currency's high volatility has also played a major role in bringing new investors to the trading market.
2.Personal Spending
You can use Bitcoin to purchase almost anything! From buying cars to travelling the world.
3.Crowd Funding
Cryptocurrency also provides the chance for you to give back to society. How? By crowd funding. You are able to be part of someone's success story by donating to a crypto crowd funding project.
The Types of Cryptocurrency
There are over 800 cryptocurrencies, but we will only discuss the top 5 prominent currencies in the market.
The 5 cryptocurrencies are Bitcoin, Ethereum, Litecoin, Monero and Ripple. For this report, we are going to cover only two of the Cryptocurrency ' Bitcoin and Ethereum.
