3 Top Things to learn about Cryptocurrency Today
Cryptocurrency is digital money which uses encryption techniques to generate currency and verify the transfer of funds.
It has been designed to be quicker, cheaper and more reliable than our regular government issued money, removing the middleman in all transactions.
Cryptocurrencies are stored in a virtual wallet.
Each wallet uses a string of random characters called a “public key”, visible to anyone, as an address for sending and receiving the cryptocurrency.
A separate “private key” allows the owner access to the money in the wallet.
1. Cryptocurrencies still overpriced
Cryptocurrency such as Bitcoin, Ethereum are still overpriced.
Major cryptocurrencies like Bitcoin are still overpriced from the cryptocurrency bubble back in late 2017.
There is still some room to fall and that a correction is still happening.
Unlike stock exchanges, crypto exchange often operate without any set of rules, regulations, or obligations.
Some are set up as seemingly legitimate exchanges but can be fraudulent.
2. How could any crypto be worth anything?
They all have absolutely nothing backing them up.
There is no tangible value in their string of bits and bytes or a bit of code?
At least the paper/plastic notes or bank accounts we call fiat currency is backed up by the federal reserve and tax payer as legally enforceable tender.
Cryptocurrencies have no such call or backup.
The whole thing could be worth zero by tonight or tomorrow? They are not even a barter system as such.
Perhaps another way to look at it is similar to software, which is also ‘just’ lines of code.
But you quite happily buy Microsoft Office at ever increasing prices, even though it’s not ‘backed by anything’.
Just because something is digital doesn’t mean it’s instantly worthless.
And if you understand the fractional banking system you’ll also know that all the ‘cash’ in the world isn’t actually backed by real cash either.
So the system you currently exist in also has plenty of money with nothing to call on.
In fact, it’s is as much an illusion as you purport cryptocurrency to be.
3. The future of cryptocurrency
Cryptocurrency has a long way to go with regards to mainstream adoption.
Cryptocurrencies are a bit like the Wild West right now. Volatile, unregulated . . . it’s all a bit crazy . . .
Price volatility makes it hard to determine the true value of the coin that used in transactions.
If you are a long-term investor, do your due diligence – research the legitimacy of the project, and find out who’s backing the coin.
If you are a short-term investor, buy the dips and don’t wait to sell to make a profit.
Ultimately though, stay away from trading cryptocurrencies until the markets have stabilized and the ecosystem has become less shady.
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