What is Cryptocurrency Guide for Beginners. All the talk about Cryptocurrency investing has finally gotten you curious and now you’re wondering exactly just what Cryptocurrency is and how you can start investing in it. Cryptocurrency (crypto currency) is a virtual digital money. It’s algorithm is secure and in most of the cases use anonymously. For Secure transactions it uses cryptography. Bitcoin is the first cryptocurrency and the second digital currency is Litecoin. Litecoin is faster than bitcoin as it has larger quantity of tokens and advance new mining algorithm. This currency uses cryptography and connected to internet.
What is Cryptocurrency Guide for Beginners
Cryptocurrency is future of money. First cryptocurrency bitcoin was created by pseudonymous developer Satoshi Nakamoto in 2009. This currency uses SHA-256 which is a cryptographic hash function. It is not regulated by national governments. Cryptocurrencies are a digital or virtual currency that uses the blockchain which is a global ledger to handle transactions. You can think of Cryptocurrency as a form of exchange. What makes Cryptocurrency so special is that it’s a limited resource.
Unlike traditional money which can be printed, there can only exist a limited number of Cryptocurrencies at a moment which is one of the reasons why their popularity keeps rising along with their prices. For example, only 21 million Bitcoins can exist at a moment in the world. Compared to the everyday paper money we use, Cryptocurrencies have no physical form and are decentralized as opposed to the traditional central banking system.
Limitations & Risks of Cryptocurrency
Buying any kind of Cryptocurrency is a high-risk investment. The Cryptocurrency market is still extremely volatile with large spikes and falls being frequent in their prices which is why it’s recommended by many to only invest as much money as you are willing to lose. This doesn’t mean that Cryptocurrency can’t be profitable but it doesn’t hurt to be careful.
Another issue Cryptocurrencies face is the matter of legality. Laws around Cryptocurrencies like Bitcoin are murky, to say the least. While some countries have outright banned Cryptocurrency exchanges and mining there are some that encourage the practice. Besides that, since Cryptocurrency is a digital medium the threat of hackers is always high as well.
How To Invest in Cryptocurrency?
The simplest way to start investing is buying Cryptocurrency through any of the multiple Cryptocurrency exchanges available online. Most sites for buying Bitcoin, Litecoin and other forms of Cryptocurrency are mostly free to register and let you purchase Cryptocurrency with relative ease. Once you’ve bought some Cryptocurrency you can use a Wallet software to trade it online.
Alternatively, you can also mine Cryptocurrencies using powerful hardware yourself. You can mine for a currency by using a computer software that solves complex mathematical riddles which in turn gets them a block of the currency they are mining. To profitable mine for a currency, you’ll need an industrial level hardware along which is accompanied by a massive electrical bill. Mining for new emerging Cryptocurrencies is much more affordable and convenient making it ideal for beginners when starting out.