What started in 2008 as an alternative to physical currency has now evolved into a $1.65 Trillion industry. Cryptocurrency is the latest phenomenon that has captured attention worldwide. What Wall Street and stockbroking used to be a couple of decades ago, cryptocurrency now occupies that position. Foremost business and thought leaders have said things about blockchain and cryptocurrency to pique curiosity.
After a long time in the form of crypto, our society is experiencing something which has attracted the interest of one and all. People who know nothing about finance are interested in crypto, and intelligent people are also interested in it. Most importantly, people who have no clue what it is but are faking it until they make it are especially interested in it.
Have you ever wondered what it is about that has attracted such a vast audience? Do you feel like a noob and experience fear of missing out because of not knowing enough about it?
If that is the case, then fret not, because after going through this article, you will know everything you need to know about cryptocurrency. So without further ado, let’s start from the basics.
Basic Pillars of Cryptocurrency
Below we highlight the following fundamental pillars of cryptocurrency. Go through them, and we are sure you will gain beginner knowledge in the subject, and next time it is being discussed around you, you won’t feel out of place.
What is Cryptocurrency?
Cryptocurrency is the exact opposite of the physical (cash) currency. It is a digital currency created, circulated, and regulated on its own. It is not answerable to any bank or government and has no third-party interference. You have direct ownership of your cryptocurrency, and its value, similar to money, is decided by the forces of market demand and supply.
Forms of Cryptocurrency
There are two significant forms of cryptocurrency: “Coins” & “Tokens” in this scenario, coins represent the actual value of your digital money. In contrast, tokens can be subjective to several interpretations. They can be money, affidavit, deed, and much more.
Major Types of Cryptocurrency
Although tens of thousands of types of cryptocurrency are currently circulating the web, as a beginner, we would like to inform you about the two biggest market leaders:
Bitcoin is the original digital currency that was invented in 2008. Bitcoin has been credited for making cryptocurrency mainstream, and it currently enjoys the biggest market cap in the industry. Bitcoin has such a high value in cryptocurrency that other currencies crash simultaneously with it when it crashes.
Bitcoin is created, circulated, and regulated using blockchain technology and is often compared to the US dollar of physical currency.
Ethereum is the only other major type that has made a name for itself out of many other types. Through Ethereum, you can create tokens of digital art known as NFTs. This digital art has the same value and can sell for millions of dollars as physical art.
Is Cryptocurrency Safe & Secure
Cryptocurrency is processed, powered, stored, and ledgered through Blockchain technology which is impenetrable/ unhackable as it is distributed peer to peer. Unlike traditional hacking, if someone wants to hack and steal cryptocurrency, they would have to hack half the computer through which it is processing.
Hence, we can safely claim that cryptocurrency is safer and more secure than physical currency.
How To Know If Cryptocurrency is Not A Scam?
Although there are quite a few cryptocurrency types that are scams, the top 100 types can be considered reliable/stable. The most basic way to know those cryptocurrencies, at least the major players, are not a scam is they have been around for 15 years. People who invested in them back then have become multi-millionaires. This however in no way suggests that you should ignore the several other viable emerging cryptocurrencies with good growth potential and leadership.
What is the Future of Cryptocurrency?
Major players in cryptocurrency like Bitcoin have been doubling their worth every four years. Hence, according to the available data, we think the stable/ senior types of currencies are the economy’s future, and those who will invest in them after doing research will reap great benefits.
Should You Invest in Cryptocurrency?
Since cryptocurrency is still somewhat in its infancy stages, it can be extremely volatile. There are also project that spring up with no real value, solely to take advantage of the rising trend and interest in crypto. So prospective investors should be aware and make well informed decisions before investing in cryptocurrency.
You may want only invest in cryptocurrency with expendable income after you’ve first invested in your knowledge of the industry. You should also consider consulting a licensed financial professional. This way, when your investment appreciates, it’s a win and when the market experiences a dip, a tendency that more experienced investors are aware isn’t uncommon, you don’t resort to panic and end up making irrational decision.
We believe cryptocurrency is the financial revolution the world has been waiting for, as the success it has seen is unrivaled in history. But with, less than 15 years into its existence currently, it is going through its infancy, and predicting its legacy may be a challenging task.
However, the future of it is as bright as it can be. Hence, in this article, we have explained crypto in the most basic language so even beginners can comprehend them.
If you love to delve deeper, you can further explore our comprehensive guide on cryptocurrency for beginners and also download your copy of beginners to cryptocurrency and decentralized finance to give yourself a head-start with cryptocurrency investment.