Have you ever heard the word “Bitcoin?” What about “Ethereum?” Or “Ripple?” If not yet, then let me tell you. These terms are all linked to cryptocurrency. Well, that’s still a big word, how about breaking it down to its roots? The prefix “crypto” means hidden or secret while the word “currency” is a system of money. So, if combined, cryptocurrency generally means a secret system of money. Now, if you’re here to know more about cryptocurrency and want to invest in the near future, you’re on the right page.
For the last few years, cryptocurrencies have been pretty circulating the internet as a topic of intense argument. Well, you’ve probably heard many times now stories of people becoming millionaires in just a short period of time, perhaps overnight as well. Then, have you also heard about some people losing a lot of money in trading but then gain them back quickly? Yes, those stories are true.
Cryptocurrency wasn’t luring much interest and attention as an investment before. Yet, this year, most business moguls can now see the present and future potential of it. It’s growing and getting a bigger audience like SpaceX and Tesla CEO, Elon Musk, who invested in Bitcoin. Today, many people are investing in cryptocurrencies since their path is clearly rocketing all the way to the moon. The attention of the speculators has been drawn to this digital asset because of its emerging price rise in the digital market.
What Is Cryptocurrency?
Cryptocurrency is a digital asset intended for trading wherein an individual can store coin ownership in a digitalized record that uses strong cryptography for security purposes in transacting, regulating, and verifying the transference of coin proprietorship. Based on decryptionary.com, cryptocurrency is an “electronic money created with technology controlling its creation and protecting transactions, while hiding the identities of its users.”
Meanwhile, according to Forbes, “a cryptocurrency is a medium of exchange that is digital, encrypted and decentralized.” There is no central or regulating institution that oversees the value of cryptocurrency unlike the traditional currency such as the Euro and U.S. Dollar. Hence, the management of cryptocurrency is largely dispersed among its users on the internet.
Digital Currency Vs Cryptocurrency
Although cryptocurrency is just one of the variants of digital currencies, there are still some key differences between the two.
- Cryptocurrencies are primarily decentralized and the policies inside the system are regulated by most of the community while digital currencies are centralized which means that the transaction within the network is managed in a centralized location, like a bank. However, there are some cases that some of the cryptocurrencies are eventually centralized and run by some founding authority.
- Most cryptocurrencies are transparent while digital currencies are not transparent. It means that all transactions in cryptocurrency can be seen and placed in a public chain – the blockchain.
- Cryptocurrencies are controlled by their respective communities while digital currencies have this central regulating body that can deal with any problems or concerns. At the request of the clients or authorities, the central regulating body can freeze, block, or cancel transactions.
The Top Cryptocurrencies
Years ago, you could still count the number and types of cryptocurrency using one hand. However, since the crypto market has grown so much, counting it on one hand is no longer possible. There are many kinds of cryptocurrencies out there. The most popular are Bitcoin, Ethereum, Ripple, and Litecoin. Every day, their value, amounts in supply, and properties are changing.
Let’s take a look at the top currencies right now:
Bitcoin – Around 2008, the concept of Bitcoin was revealed by a person named Satoshi Nakamoto. However, it was then discovered that this was not this person’s real name. And until now, many are still wondering who the creator of Bitcoin is. Previously, they didn’t realize the value of Bitcoin, but at that time, it was the beginning of a colossal technological movement in digital history. Around December 2017 when Bitcoin reached a price of $20,000 per single Bitcoin. Consequently, those who are holding or owning 50 Bitcoins or more became a millionaire. Insane, right? But that is a real investment. Currently, its value is around $50,000.
Here are the pros and cons of Bitcoins:
- There will only ever be 21 million Bitcoins.
- Bitcoin is easier to liquidate than rival cryptocurrency types.
- More stores accept Bitcoin than other cryptocurrency types.
- Bitcoin is the biggest cryptocurrency.
- Bitcoin fluctuates a lot.
- In the future, Bitcoin may be replaced by a better cryptocurrency.
- People still use Bitcoin for a crime.
Ethereum – This cryptocurrency platform allows people to build tokens, dApps, and smart contracts. Ether (ETH) is the name of its currency. If you’re wondering what dApp is, let me enlighten you. Dapp is a cross-chain platform for people to discover, use, and enjoy dapps with ease using cryptocurrency like Ether. Today, Ethereum’s value is around $1,700.
Here are the pros and cons of Ether:
- Users of dApps built on Ethereum will always need Ether.
- Many new projects are being built on Ethereum.
- Ethereum can process transactions in a matter of seconds.
- There are many more Ether coins than there are Bitcoins.
Ripple – In essence, this cryptocurrency is what they call the “banker’s coin” because it was designed to be used by banks for faster payment transactions. Ripple had its fair share of popularity because of its partnerships with international banks around the world. Its currency code is XRP and its current value is around $0.40.
Here are the pros and cons of Ripple:
- Global banks are trusting Ripple.
- Ripple isn’t decentralized, unlike any other cryptocurrencies.
Litecoin – Basically, Litecoin is just an upgraded version of Bitcoin’s blockchain. It was designed as an improvement of Bitcoin. It uses the Lightning Network technology for faster transactions. Bitcoin transactions take around 10 minutes and more while Litecoin transactions take around a few seconds. Its currency code is LTC and it’s around $200.
Here are the pros and cons of Litecoin:
- Litecoin is both faster and much cheaper than Bitcoin.
- Litecoin is a lot better for micropayments.
- Litecoin is still only a slight improvement in Bitcoin.
So, there you go, you should be familiar now with the top trending or the most popular cryptocurrencies in the digital world. Thus, this puts you at an advantage to start deciding where you will invest your money.
Advantages and Disadvantage of Cryptocurrency
Since cryptocurrencies are becoming more popular these years because of their price hike in their value, they are now changing the landscape of trading and investments. But just like any other thing on earth, it also has its own positive and negative side.
Let’s take a closer look:
- Easy to use.
- Can be used internationally.
- Low operation cost.
- Offers unlimited and faster transactions.
- It is transparent.
- Provides security and anonymity.
- No inflation.
- Peer-to-peer cryptocurrency network.
- Lack of knowledge creates complexity.
- Strong volatility.
- Large risks of investments.
- Not yet accepted widely.
- No reverse payments.
- Lost devices or passwords might be a problem.
These are just some of the pros and cons of cryptocurrency. You’re still the one who will decide if you’re going to take the risk or simply just go with the traditional form of investments or trading. But what if, what you invest today in cryptocurrency might make you a millionaire in the future? Who knows?
Why should you invest in Cryptocurrency?
Remember the story of how Bitcoin started where its currency value was just less than $1 before? Look at how big it is now. Today, its worth is more than $50,000. So, let me ask you a question, should you really invest in cryptocurrency? Well, let me enlighten you with these top reasons why investing in the crypto market will give you a higher chance of becoming rich.
- Authorities foresees growth in cryptocurrency.
- Start small and grow with the process.
- Anybody can buy cryptocurrency.
- It is flexible.
- Crypto is yours no matter what.
- Since its private, your identity is secured.
Back in time, you should be technologically literate before you can invest in the crypto market. However, the barrier is starting to fade as there are a lot of tutorials now on social media like YouTube or Tiktok that teach you on how to trade or invest. So, it’s really a good thing that everyone can be able to purchase cryptocurrency and invest.
So, was I able to convince you?
Even if you look in a different direction, you will be able to see the potential of cryptocurrency. Cryptocurrencies are here because they are the future of money. Yes, we all know that it is a young market, but young markets are where the best opportunities lie. Are you still on the edge of jumping into the crypto market? Worry not, because all you need is courage and knowledge to be able to cross to the other street of investment. We don’t want to lose anyway, but why not try it first with a small capital and then let your crypto journey grow into profit. It’s still your mighty decision to choose what’s best for you anyway. If I was able to convince you, then I’m proud of you. My best advice? Only invest your money in something you think or feel comfortable losing.