If you have been present on the Internet for some time and get informed from time to time, it is almost impossible that you have not heard at least something about the famous cryptocurrencies. If you haven’t traded or invested, then at least you found out about their existence.
However, many laypeople are interested in learning more about the famous Blockchain technology and cryptocurrencies by reading relevant Crypto glossary examples, blog posts, articles, and news. Given the high volatility of cryptocurrencies and their potential for excellent earnings, it is not surprising where so much mass interest in them comes from.
Therefore, we decided to explain all the ambiguities to beginners and give them all the critical answers to what a cryptocurrency is and how to start investing in it. So let’s begin!
What Is Cryptocurrency Exactly – Get All The Fundamentals
A cryptocurrency represents a virtual or digital currency secured by cryptography. It means that there’s no way to double-spend or counterfeit it. Numerous cryptocurrencies are decentralized networks that are based on famous Blockchain technology.
Blockchain technology represents a distributed ledger enforced by a disparate network of computers for those who are still unfamiliar with it. These blockchains act as peer-to-peer networks and are maintained by miners.
That’s allowing almost anyone to transact directly with whomever they want. The majority approves all transactions on the Blockchain of consensus of all the miners. In general, a defining feature of cryptocurrencies is that any middleman or central authority doesn’t issue them. Therefore they are immune to manipulation or government interference, theoretically.
It’s essential to know that the first cryptocurrency ever appeared in the famous Bitcoin (BTC) based on a whitepaper. It’s published by Satoshi Nakamoto, the pseudonym of a person or a group of people. Since its establishment, thousands of cryptocurrencies, better known as altcoins, have been created.
Learn All The Main Types Of Cryptocurrencies
The Main Types Of Cryptos Are:
- Medium exchange tokens – they are intended primarily to be used to transfer value between two parties.
- Platform tokens are mainly used to access a blockchain that does more than just store a ledger of transactions.
- ICOs – are mainly used for transactions on decentralized applications such as Dapps or DAOs.
- Asset-backed tokens are backed by bonds, commodities, or stocks, which are traditional assets.
How Can You Invest In Cryptocurrencies The Best?
There are several ways you can start investing in crypto. We will single out the best and most effective ones:
- Cryptocurrency trading – it’s one of the most profitable ways of investing, given the volatility of cryptocurrencies. Trading is challenging to learn, but it’s a very lucrative way to participate in the market.
- Buy and hold investing – the most usual strategy that relies on your beliefs and intuition on whether you believe one currency has a value and will grow in value over time.
- Cryptocurrency investing – it’s a very different and unique way to profit from cryptocurrencies. The profitability of crypto mining solely depends on the price of the mined cryptocurrency. Miners have high setup costs and overheads.