What is Cryptocurrency?
A cryptocurrency is a means of digital exchange that uses encryption (cryptography) to ensure the processes involved in generating units and performing transactions. The transfer of funds operates on the internet, independently of central banks and governments. Transactions are added to a public ledger, also called a transaction block chain, and new currencies are created through a process known as mining.
Cryptography is a technique that uses elements of mathematical theory and computer science and was developed during the Second World War to transfer data and information safely. Currently, it is used to protect communications, information and money online. As of 2017, cryptocurrency has been used as a decentralized alternative to traditional fiduciary currencies (which are usually backed by some central government), such as the US dollar (USD).
The cryptocurrency allows users to make secure payments, without having to go through banks.
List of Important Cryptocurrencies:
Bitcoin is the pre-eminent cryptocurrency and the first to be widely used. It was created in 2008 and made public in 2009. As of 2017, Bitcoin is the best known and most widely used cryptocurrency. Bitcoins are created digitally through a process of “mining” that requires powerful computers to solve complex algorithms and crisp numbers. Currently they are created at a rate of 25 Bitcoins every 10 minutes and will have a limit of 21 million, a level that is expected to reach 2140. Despite the large increase in price, Bitcoin is the best option for anyone entering the cryptocurrency space . .
Bitcoin is more accessible (with more merchants, more exchange) than other cryptocurrencies. With Bitcoin ATMs and extensive knowledge and adoption, it is now easier than ever to extract and obtain Bitcoins and make real transactions. Bitcoin, however, should not be confused with Bitcoin Cash. Bitcoin Cash is a dissident part of Bitcoin, which is now a separate cryptocurrency.
Litecoin was founded in October 2012. It is probably the second most important digital currency and is designed to process smaller transactions more quickly. Unlike the heavy computer power required for Bitcoin mining, Litecoin can be mined by a normal desktop computer.
Ethereum is probably the third most important coin. It has a less intimidating cost that Bitcoin, and has the second highest market cap. On that note, Ethereum classic is also notable.
- Bitcoin Cash & Bitcoin Gold:
Bitcoin Cash is a spin-off of Bitcoin, destined to have faster transactions, voted and implemented by the Bitcoin community. Bitcoin Gold is also a spin-off of Bitcoin. These currencies have a high market capital and could become the best players in the long term.
Ripple tends to have a constant price due to its great offer. It has had the power of permanence over time. It is a popular and fast alternative to Bitcoin that is often less volatile than other currencies towards the top of the list. The payment mechanism allows the transfer of funds in any currency to another user in the Ripple network in a matter of seconds, in contrast to Bitcoin transactions, which can take up to 10 minutes to be confirmed.
Should You Invest to Cryptocurrencies?
There have been many speculations about the future of digital currencies, with skeptics encouraging everyone to take their money out of the bubble before it explodes. On the other hand, cryptocurrencies continue to enjoy a wave of popularity like never before.
If you are considering investing in cryptocurrencies, it may be better to treat your “investment” in the same way that any other highly speculative company would treat it. In other words, recognize that you risk losing most of your investment, if not the whole. As stated above, a cryptocurrency has no intrinsic value other than what a buyer is willing to pay for it at any given time. This makes it very susceptible to large price fluctuations, which in turn increases the risk of loss for an investor.
Investing in cryptocurrencies could be a good investment, or could not. Now, the best cryptocurrency to invest is Bitcoin. These are the main reasons why Bitcoin is the best investment in the future.
Bitcoin is growing in adoption in the world. In April 2017, Bitcoin officially became a payment method in Japan. Now, more than 260,000 establishments selling food establishments and retailers are accepting cryptocurrencies.
In 2018, we expect to see a dramatic increase in the supervision and regulation of cryptocurrencies and, as a result, we expect to see established financial institutions that invest billions of new money in space.
Major retailers such as Overstock and Expedia have also begun to accept it as payment, and countries around the world have started to open exchanges and accept Bitcoin as the official currency.