You’ve probably heard of bitcoin, but most people haven’t used it yet because they do not understand it or they are not sure if it is relevant to their lives.
Bitcoin, together with some other cryptocurrencies are now poised to disrupt global financial markets, as well as payment that until now have been controlled by banks or some significant payers such as PayPal acting as the middleman.
Now, it will be time to educate yourself about how cryptocurrency is converting the world, in addition to how you can get involved as we head into this New Year.
Here, we are going to take a look at the three of the most common cryptocurrencies, and see how they work and why you need to get savvy on this emerging trend in the year that came, in particular when it comes to your investment portfolio.
– What is cryptocurrency?
Cryptocurrency is a digital or maybe virtual currency which does not exist in the real world in a tangible form, but can also be used as a medium of exchange for buying goods or services.
The base word “crypto” actually refers to the cryptography that is used to verify transactions, as well as keep the virtual asset secure.
The first successful cryptocurrency in 2009 as a “peer-to-peer electronic cash system” was bitcoin.
By permitting humans to transact with one another directly, without a middleman, cryptocurrency is probably surprisingly to grow in the years that are coming.
We may use a check, a credit card, or PayPal when we buy something or we pay for some service, and that introduces a mediator that acts as a gatekeeper and charges a fee, to facilitate your transaction.
With using cryptocurrency, parties to an exchange can certainly change virtual cash for a few other items and services, without incurring delays, costly and luxurious transaction fees and with fewer complications related with permitting a third party into your transaction.
If you are interested in purchasing cryptocurrency, you should sign up for an account on Coinbase and get $10 of free bitcoin.
Blockchain technology is the backbone of cryptocurrency.
– But, what is blockchain?
Bitcoin was the first decentralized cryptocurrency, and it was created in 2009, to allow transactions without a bank.
Bitcoin was increasingly accepted as transactional currency over the past few years, and it continues to grow today.
Those that accept bitcoin are Expedia, Overstock.com, NewEgg, Shopify, Dish Network, and Roadway Moving and there are also more companies which embrace cryptocurrency every day.
Besides of using bitcoin as a payment medium, you may add investing bitcoin to your portfolio without going through some complex steps which are required to set up a bitcoin wallet. Some exchanges such as Coinbase, facilitate investing.
– What is Ethereum?
Ethereum was actually created in 2014, and it differs significantly from bitcoin for the purpose that it has.
The primary intention of bitcoin is to be a cash alternative, but Ethereum, as well as its Ether, are genuinely aimed at financing peer – to – peer contracts and applications development as well.
Both bitcoin and Ether are digital currencies, but they also operate differently as the latter is not well – suited for everyday consumer usage.
However, Ether can also be traded on the virtual currency market, and it is something which can also be considered as a potential investment. Ether is also available through Coinbase.
While currently, one bitcoin is worth around $14k, Ethereum is closer to $750.
– What is Litecoin?
Litecoin is also called the “little brother” to bitcoin, and it was created in 2011.
Litecoin differs from Bitcoin in the size of transactions which it is intended to support.
Bitcoin can also support huge transactions, while Litecoin, which is invented by a Google employee, is actually aimed at microtransactions.
It is also a cheaper of cryptocurrency than bitcoin and it transactions process much more rapidly.
There are several online stories now which accept litecoin, and some online travel agencies as well, such as CheapAir and Btctrip, Re/Max Realty, Overstock, and Uber.
Litecoin is currently valued at $275, and it can be obtained via Coinbase, as well as some other exchanges.
Cryptocurrency is a new way of personal investing which is expected to grow significantly this year.
Bitcoin, ethereum, and litecoin are the global currencies which grow in acceptance and may offer some stability as an investment.
The price of the cryptocurrencies fluctuates, but it has also seen significant growth over the past year in particular.
Digital currency needs to be stored in an online wallet or exchange account, and it is also critical that the storage is secure.
Coinbase, as well as some other services, offer secure storage, to protect your investments, as well as allow individuals more comfortable access to cryptocurrency for investments.
Investing in bitcoin, Ethereum and litecoin has also been equated to commodities investments, like art, oil or gold, as there is a limited amount of these assets available and the value it has is entirely driven by market value which can be volatile.
But, it can also be significantly rewarding.
– Consider investing in cryptocurrency in 2018
When some new investors enter the market, both individual and institutional, also including hedge funds, the value of cryptocurrency is predicted to rise.
According to some experts, blockchain technology is the future of software development and the next evolution of the internet.
When you are ready to invest in cryptocurrency, you should do your homework before you buy.
A lot of cryptocurrency exchanges exist, so we also must be critical to choose carefully.
Coinbase stores investors’ digital currency securely, investments are insured, and the exchange also facilitates recurring buy orders, so that you can build a cryptocurrency portfolio over time.
By using a digital currency wallet, you can finance your cryptocurrency investment by using some funds from your bank account, as well as credit card or debit card.
Currently, Coinbase stores roughly 10% of all bitcoin in circulation.
No matter what exchange you choose for investing in cryptocurrency, you should make sure that it is secured, as well as insured and stable.