Second Part
Properties of Cryptocurrency
Cryptocurrency has a lot of properties both monetary and transaction and they are outlined below:
- Cryptocurrency has features that allow for adaptive scaling
This means that cryptocurrency possesses adaptive features that allow the currency to work well both on a large scale and small scale. Cryptocurrency possesses other measures that have been added such as limiting the supply of the currency, and this is to allow this adaptive feature of the currency to work fine.
- Cryptocurrency is a decentralized currency
Cryptocurrency is an open-source currency, both the creation and transaction are open sources. What it means to be decentralized is that there is no bank, government or third party that has any control or hold over the currency. There is also regulatory body that regulates this currency. This currency has eliminated the need for third parties as it relies mainly on peer to peer network. This currency cannot be affected by any individual or organization.
- Cryptocurrency is digital currency
Just as normal currencies are stored in wallets, cryptocurrency is stored in digital wallets and they can be digitally transferred to digital wallets of other people. There is no physical currency that represents cryptocurrency.
- Cryptocurrency makes use of opensource network
This means that developers don’t need to pay a fee to create API’s and the network is open for everyone to join.
- Cryptocurrency is Pseudonymous
Rather than the connection between the owner and his cryptocurrency be anonymous, it is pseudonymous. This means that as the cryptocurrency is stored in digital wallets that are encrypted, the identification of the owner is kept in an address that is coded and it is not attached to the real identity of the owners since the blockchain is open source and public.
- Cryptocurrency is a currency with value
Cryptocurrency just like other forms of currency has to have value for it to be an effective currency. Cryptocurrency is a very active currency with regards to its value. The value of cryptocurrency is added to it during the process of mining. The scarcity and demand for the cryptocurrency however causes the fluctuation in the value of the currency. The proof of work system is also another means by which value is added to this currency.
- Cryptocurrency cannot be reversed
This means that once a transaction has been confirmed, it cannot be reversed. As there is no third party or regulatory body, there really isn’t any safety net. So proper care and precision has to be taken during transactions as there is no reversal once the transaction has been confirmed. However, reversal can occur if and only if the transaction has not yet been confirmed. The window before confirmation is a very small window and transaction process is relatively fast.
- Cryptocurrency is fast and it is used globally
Cryptocurrency can be used anywhere in the world so far as you have the software and your digital wallet. The transaction process is also relatively fast. These are what makes using cryptocurrency advantageous.
- Cryptocurrency networks are secure
Cryptocurrency is a very secure currency as they are safely locked in an encrypted system with a public key and only the owner of the private key can make use of the currency and do transactions. This essentially means that cryptocurrency networks are impossible to break into.
- There is no need for permission when making use of cryptocurrency
When making use of cryptocurrency, there is no gatekeeper so all you have to do is download the software, install it and then you are ready to send and receive the various types of cryptocurrency.
- There is controlled supply with cryptocurrency
This essentially means that there are certain times when there will be scarcity of cryptocurrency and it also means that periods like this can be predicted mathematically.
Types of cryptocurrency
There have been quite a huge number of cryptocurrency that has been generated over the years, but only a few are relevant enough. Of these few, only a small number have a market cap that is has an overhead of one million dollars. Based on relevancy and market cap, outlined below are a few of the existing cryptocurrencies of today.
- Bitcoin
- Litecoin
- Ethereum
- Bitcoin crash
- Ripple
- IOTA
- Darkcoin
- Tether
- Namecoin
- Nxt
- Peercoin
- Dogecoin
How To Trade and Invest In Cryptocurrencies
The important things you need to have before you start trading or investing in cryptocurrency include :
- One or more cryptocurrency wallet
- One or more cryptocurrencies you want to trade on
These are the basic things you need, from here the rest is really simple. If you want to invest in cryptocurrency as a first-time investor, you can choose between GBTC trust which is essentially like the cryptocurrency IRA (here cryptocurrency are traded at premium rates) or an exchange. Where you will buy your cryptocurrency on and a wallet to store them or a hybrid blend of both the exchange broker and the wallet. Each of these options outlined above all come with their varying disadvantages and advantages so before you decide to use any of them, it is important to have all the information.
There are several important things you need to know before you start trading or investing in cryptocurrency.
- You need to fully understand that cryptocurrency is not like the regular stock exchange, so the investing process is obviously different as well.
- The best place to buy, trade, exchange, and store cryptocurrency is coinbase.
- It is important to know that the cryptocurrency market fluctuates and is extremely volatile.
- If you are a beginner, you need to start trading prominent coins first and choose companies that have good reputations.
Conclusion
Cryptocurrency is growing rapidly; if you want to invest in any cryptocurrency, it is important to start investing now as the value of them will continue to increase over time.