What is cryptocurrency?
cryptocurrency is typically decentralized digital money designed to be used over the internet. Bitcoin, which launched in 2008, was the first cryptocurrency, and it remains by far the biggest, most influential, and best-known. In the decade since, Bitcoin and other cryptocurrencies like Ethereum have grown as digital alternatives to money issued by governments.
The most popular cryptocurrencies, by market capitalization, are Bitcoin, Ethereum, Bitcoin Cash and Litecoin. Other well-known cryptocurrencies include Tezos, EOS, and ZCash. Some are similar to Bitcoin.
What Is Bitcoin (BTC)?
Bitcoin is a decentralized cryptocurrency originally described in a 2008 whitepaper by a person, or group of people, using the alias Satoshi Nakamoto. It was launched soon after, in January 2009.
Bitcoin is a peer-to-peer online currency, meaning that all transactions happen directly between equal, independent network participants, without the need for any intermediary to permit or facilitate them. Bitcoin was created, according to Nakamoto’s own words, to allow “online payments to be sent directly from one party to another without going through a financial institution.”
Some concepts for a similar type of a decentralized electronic currency precede BTC, but Bitcoin holds the distinction of being the first-ever cryptocurrency to come into actual use.
Who Are the Founders of Bitcoin?
Bitcoin’s original inventor is known under a pseudonym, Satoshi Nakamoto. As of 2021, the true identity of the person — or organization — that is behind the alias remains unknown.
On October 31, 2008, Nakamoto published Bitcoin’s whitepaper, which described in detail how a peer-to-peer, online currency could be implemented. They proposed to use a decentralized ledger of transactions packaged in batches (called “blocks”) and secured by cryptographic algorithms — the whole system would later be dubbed “blockchain.”
Just two months later, on January 3, 2009, Nakamoto mined the first block on the Bitcoin network, known as the genesis block, thus launching the world’s first cryptocurrency. Bitcoin price was $0 when first introduced, and most Bitcoins were obtained via mining, which only required moderately powerful devices (e.g. PCs) and mining software. The first known Bitcoin commercial transaction occurred on May 22, 2010, when programmer Laszlo Hanyecz traded 10,000 Bitcoins for two pizzas. At Bitcoin price today in mid-September 2021, those pizzas would be worth an astonishing $478 million. This event is now known as “Bitcoin Pizza Day.” In July 2010, Bitcoin first started trading, with the Bitcoin price ranging from $0.0008 to $0.08 at that time.
However, while Nakamoto was the original inventor of Bitcoin, as well as the author of its very first implementation, he handed the network alert key and control of the code repository to Gavin Andresen, who later became lead developer at the Bitcoin Foundation. Over the years a large number of people have contributed to improving the cryptocurrency’s software by patching vulnerabilities and adding new features.
Where Can You Buy Bitcoin (BTC)?
Bitcoin is, in many regards, almost synonymous with cryptocurrency, which means that you can buy Bitcoin on virtually every crypto exchange — both for fiat money and other cryptocurrencies. Some of the main markets where BTC trading is available are:
1. Binance
2. Coinbase Pro
3. Coinmama
4. OKEx
5. Kraken
6. Huobi Global
7. Bitfinex.
What is a crypto wallet?
Crypto wallets keep your private keys – the passwords that give you access to your cryptocurrencies – safe and accessible, allowing you to send and receive cryptocurrencies like Bitcoin and Ethereum.
Unlike a normal wallet, which can hold actual cash, crypto wallets technically don’t store your crypto. Your holdings live on the blockchain, but can only be accessed using a private key. Your keys prove your ownership of your digital money and allow you to make transactions. If you lose your private keys, you lose access to your money. That’s why it’s important to keep your hardware wallet safe, or use a trusted wallet provider.
How do you use a crypto wallet?
Crypto wallets range from simple-to-use apps to more complex security solutions. Keys are stored in an app or other software – look for one that is protected by two-step encryption. This makes sending, receiving, and using your crypto as easy as using any online bank account, payment system, or brokerage.
Wallets offered by a major exchange are the simplest way to get started in crypto and offer a balance of security and easy access. (Because your private info is online, your protection against hackers is only as good as your wallet provider's security – so make sure you look for features like two-factor verification.). Using an app as Wallet or Exodus gives you easy access to your crypto holdings. You can:
1. Manage all your digital assets in one secure place
2. Control your own private keys
3. Send and receive cryptocurrency to and from anywhere in the world
4. Interact with usernames rather than long, hexadecimal “public key” addresses
5. Browse dapps (decentralized finance apps)
6. Shop at stores that accept cryptocurrency
What is cryptocurrency trading?
Cryptocurrency trading is the act of speculating on cryptocurrency price movements via a CFD trading account, or buying and selling the underlying coins via an exchange. The word "CFD" means "Contract For Differences." A contract for differences (CFD) is a financial contract that pays the differences in the settlement price between the open and closing trades. CFDs essentially allow investors to trade the direction of securities over the very short-term and are especially popular in FX and commodities products.
CFDs trading are derivatives, which enable you to speculate on cryptocurrency price movements without taking ownership of the underlying coins. You can go long (‘buy’) if you think a cryptocurrency will rise in value, or short (‘sell’) if you think it will fall. Both are leveraged products, meaning you only need to put up a small deposit – known as margin – to gain full exposure to the underlying market. Your profit or loss are still calculated according to the full size of your position, so leverage will magnify both profits and losses.
How does cryptocurrency trading work?
You can trade cryptocurrencies via a CFD account – derivative products that enable you speculate on whether your chosen cryptocurrency will rise or fall in value. Prices are quoted in traditional currencies such as the US dollar, and you never take ownership of the cryptocurrency itself.
CFDs are leveraged products, which means you can open a position for a just a fraction of the full value of the trade. Although leveraged products can magnify your profits, they can also magnify losses if the market moves against you.
How do cryptocurrency markets work?
Cryptocurrency markets are decentralised, which means they are not issued or backed by a central authority such as a government. Instead, they run across a network of computers. However, cryptocurrencies can be bought and sold via exchanges and stored in ‘wallets’.
Unlike traditional currencies, cryptocurrencies exist only as a shared digital record of ownership, stored on a blockchain. When a user wants to send cryptocurrency units to another user, they send it to that user’s digital wallet. The transaction isn’t considered final until it has been verified and added to the blockchain through a process called mining. This is also how new cryptocurrency tokens are usually created.
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Benefits of Investing in Cryptocurrency
Are you thinking about hopping on the cryptocurrency train? If you are, it’s not a bad idea. Currencies like Bitcoin and Ethereum have seen massive growth in recent years. In fact, if you invested $1,000 a decade ago, you’d have over $15.6 million today. Today, we’re going to talk about some of the other benefits that go along with investing in cryptocurrency. Read on to learn all about the benefits of investing in crypto.
1. Huge Opportunities for Growth
One of the biggest benefits of crypto investments is the growth potential. While most stocks can provide you with a moderate return on investment over time, nothing compares to crypto. New currencies come out all the time, and many of these see massive jumps in value. Even more stable options like Bitcoin and Ethereum grow at incredible rates, making it easy for beginners to make money. You do want to make sure you get a currency before investing in it, however. While the profit potential is huge, newer currencies also have a greater chance of going under.
2. Options to Trade Over the Short and Long Term
Cryptocurrencies give you the option to choose between investing in the short and long term. Dips and fluctuations won’t affect your profit as much over the long term. However, profit growth also won’t be as large. On the other hand, while short-term investments allow you to bring in much returns on investment.
3. Decentralization
While the crypto market certainly sees its ups and downs, it’s not tied down to any financial institutions or political organizations. The power is in the hand of the user, so you don’t have to worry about things like fiscal policy or recessions affecting the currencies. Keep in mind that the decentralized nature of crypto also makes it tricky to track down your funds once you spend them. Ensure you know exactly where you’re sending them off to before doing so.
4. Short Processing Time
Blockchain technology makes all crypto transactions peer-to-peer. That means you don’t have to worry about lengthy wait times or financial institutions getting in the way of you sending or receiving money. Most processing time happens in a matter of seconds.
5. Investing in Cryptocurrency Made Easy
If you’re looking to invest some money in a fast-growing market, crypto is the perfect place for you to do it.