The cryptocurrencies or digital currencies are currencies which you can neither see, touch or feel but you can buy and sell using it. They are currencies in which encryption techniques are used to regulate the generation of units and verify the transfer of funds, operating independently of a central bank. Unlike the common money we know, digital currencies are digital; e-monies, you can’t lay hold of it but it qualifies as money since it is a recognized means of buying and selling and a medium of exchange. They are decentralized and no government or organization could claim to have control of it and hence nobody can regulate it.
A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange, it uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets.
It has been a controversial topic as to the initiator or founder(s) or starter(s) of cryptocurrencies, while some claim that is the mysterious Satoshi Nakamoto, whose identity is unknown, some link the invention to another individual but it is a known fact that digital currency finally gained success in the year 2009 when Bitcoin (represented as Btc) was released as open-source software after numerous futile attempt to create digital currencies.
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Bitcoin is generally considered the first decentralized currency. It is not regulated by any government or organization neither is it under the control of any state or person.
Till date, bitcoin remain the most popular, most accepted and the most expensive among all other cryptocurrencies as there have been more than 3000 other cryptocurrencies released into the market since 2009, after the huge success of bitcoin.
Some out of the numerous cryptocurrencies released afterwards include Ethereum (represented as Eth), Litecion (Ltc), Stellar (Xlm), Ripples (xrp), Bitcoin cash (bch), Pivot (pvt), namecoin etc. All these other coins other than bitcoin are referred to as altcoins.
Bitcoin was valued for the first time in 2010 when someone decided to swap his 10,000 units of bitcoins for two pizzas on 22nd of May 2010 and this date is celebrated every year as bitcoin pizza day in remembrance of the day bitcoin gained value.
Since 2010, Bitcoin has gained more popularity, and is widely accepted and extended into more countries in America, Europe, Asia, Australia and even Africa. Bitcoin and other digital currencies have remained a unit of investment, business and means of livelihood for most individuals.
Although many people are yet to know what cryptocurrencies are, it is a way to make money at the comfort of your home without physical contact with the person you are buying from or selling to; all you need is a smartphone or a computing device. Since it is digital or an E-money, you can transact with any body in any part of the world; you can buy, sell, hold, mine or swap.
It’s high time individuals avert their attention to this digital way of making money as it is on the ‘soft work’ way of making money and creating exchange.
There are about four segments in this business and four distinct way a person involved in it can make his money as it doesn’t only revolve around buying and selling; there are the traders, the holders, the miners and those engaged in swapping.
The traders are those engaged in the buying and the selling of the coins on daily bases. They buy in order to sell, they sell with little or more profit margin. It takes a lot of experience to be a trader of cryptocurrencies. A trader should be conversant with the pull and the push factor that leads the rise and fall of the prices.
Then there are the holders, the holders are the investors, they invest in the cryptocurrencies, they can hold that for years and can only withdraw it when they feel it’s necessary. Holding in the real sense of it is the most lucrative part of cryptocurrencies.
Earlier this year, a bitcoin was sold for $4000 USD but by June the same year, bitcoin hit $14000.There are other coins (referred to as altcoins) which is less than $1 now but have the prospect of hitting $11000 in the nearest future. Some of those altcoins include; Ripple (Xrp), Stellar (Xlm), Bitcoin cash (bch) etc. These coins are predicted to be worth more than a thousand dollar in the nearest future and due to the success of bitcoin the prediction will not be far from the truth despite the fact that each of those coins cost less than one dollar.
There are those that are into mining of bitcoins and other cryptocurrencies. Constant energy or electricity is required for mining. Most times the cost of power and the cost of machines to be used in mining makes cryptocurrency mining less lucrative. Some of the most popular machines used in mining are Antminer S9, Antminer R4, Avalon 6 etc (you can check the cost on Amazon if you are interested in getting one).
There are also those that are into swapping of coins. All they do is to swap one coin for the other, they make their income from the fees they charge for swapping.
The good news about cryptocurrency investment or trade is that there is no minimum or maximum amount of money that’s required to start up the trade, you can start with as low as 10 dollars while you can invest with as much as one million dollars. All it takes is to create an account on any of the online exchanges and buy any of the coins with any amount of money you wish and send the coins into your wallet and there you go.
Be it noted that since it’s a business and just like other trade, it is determined by the market forces of demand and supply; the price could fall and rise at any time. The $10 worth of bitcoins or any other coin you get today could experience 10% increment by the next day and it could also fall by 10% by the next day; you must always study the price chart of each coin for you to be able to decipher the fate of the coin. Reading a chart is not rocket science, basic knowledge of economics will help you.
Be smart when dealing with crypto – it can make or burn you financially depending on the market.