Everyone has heard how bitcoin and other cryptocurrencies have made millionaires those who bought a year ago. Profits of 1000% and more are not just possible, it has been a commonplace for many of these cryptocurrencies. Anyone who bought bitcoin in May 2016 for less than $ 500 would get a 1,400% increase in about 17 months. Then over the last few days we have seen that bitcoin has lost almost $ 1,000, so to say that these cryptocurrencies are unstable would be a significant understatement.
Since the creation of bitcoin in 2008, we at Trend News have been skeptical about the survival of cryptocurrencies, given that they pose a very obvious threat to governments that want to see and tax all transactions. But while we can still be wary of real cryptocurrencies, we are very aware of the potential of the underlying technology that drives these electronic currencies. In fact, we believe that this technology will be a significant destroyer in the way data is managed, and that it will affect all sectors of the global economy, just as the Internet has affected the media.
Here are some questions and answers to get you started …
Q: What is a cryptocurrency?
The most famous cryptocurrency (CC) is BITCOIN. It was the first CC launched in 2008. Today, there are over 800 CCs, including Ethereum, Litecoin, Dash, Zcash, Ripple, Monero, and they are all “virtual”. There are no “physical” coins or currency.
Q: How do CCs work?
CCs are virtual currencies that exist in very large distributed databases. These databases use BLOCKCHAIN technology. Because every Blockchain database is widespread, it is believed that it is immune to hacking, as there is no central point of attack and every transaction is visible to everyone on the network. Each CC has a group of administrators who are often referred to as “miners” who check transactions. One CC called Ethereum uses “smart contracts” to verify transactions. Crypto TREND will tell more details in upcoming news releases.
Q: What is a BLOCKCHANE?
Blockchain is the technology that underlies all CCs. Each transaction for buying, selling or exchanging CC is entered into a BLOCK that is added to the chain. This technology is complex and will not be explained here, but it can revolutionize the financial services industry because transactions can be performed quickly and easily by reducing or eliminating fees. The technology is also being studied for application in many other industries.
Q: Are CC exchanges regulated by the government?
For the most part, the answer is NO, which, for some users, is a big attraction of this market. It is now a “wild west,” but governments in most developed countries are studying the market to decide what regulation may be needed. An important decision is to treat CC as a currency or commodity / security. Canada and the US have so far stated that CCs are legal, however the situation remains unchanged with regard to reporting and tax implications. Crypto TREND will monitor and report on these events.
Q: How to invest in this market?
You can buy, sell and exchange CC using the services of specialized “Exchanges”, which act as a broker. You start by choosing to exchange, set up an account and transfer fiat currency to your account. You can then place orders to BUY and SELL CC. There are many exchanges around the world. Opening an account is fairly simple, and all of these exchanges have their own rules on initial funding and withdrawals.
Crypto TREND will recommend CC Exchanges in the future.
Q: Where can I store CC?
To have the freedom to move cryptocurrencies and pay bills, you will need a digital wallet. These wallets are available in several formats such as desktop, cloud, hardware (USB), mobile phone and paper. Many of them are FREE, however security is an important factor as no one will ever want to lose their wallet or steal it. Crypto TREND will recommend digital wallets in the future.
Q: What can I do with my CC?
In addition to investing in CC products, you can also use cryptocurrency for certain financial transactions such as remittances and bill payments. The list of companies that accept cryptocurrency is growing rapidly and includes major ones such as Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynga, Subway and WordPress.
Q: What’s next?
Starting, we will keep each of the Crypto TREND articles short and keep the scope of each as narrow as possible. As we noted earlier, we believe that cryptocurrency technology will change the game and such potential investment opportunities will appear once or twice in a lifetime. Make no mistake, early investing in this sector will only be on your most speculative capital, money you can afford to lose.
Even if you don’t want to invest at this time, an early understanding of this new destructive technology will put you in a good position to profit from our recommendations as we move forward.
Expect more news and specific recommendations from Crypto TREND when we embark on this journey into what may at first seem like an alien jungle. This is a volatile market and it may not appeal to all investors, however Crypto TREND will be your guide when and when you are ready.