A crypto currency is a digital currency that can be used to buy goods and services, but uses an online ledger to secure online transactions. Much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices. Here are some questions asked if n cryptocurrency:
1. What is Cryptocurrency? Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens or coupon, and these can be traded specifically for the goods or services that the company provides. Crypto-currencies work using a technology called block chain. Block chain is a decentralized technology spread across many computers that manages and records transaction. Part of the appeal of this technology is its security.
2. Crypto-currency by market capitalization: These are the top 10 growing cryptocurrency in the market and their capitalization.
Cryptocurrency Market capitalization
Bitcoin $1.59trillion Ethereum $222.3billion Tether $33.1billion
Binance Coin $30.5billion Cardamom $28.3billion
Polka dot $28.1billion XRP $24.4billion
Chain link $13.3billion
Bitcoin Cash $13.1billion.
3. Why are cryptocurrency popular? Crypto currency appeal to their supporters for different reasons. Supporters see crypto currency as a currency for the future such as Bitcoin. Some supporters like the fact that cryptocurrency removes central banks from managing the money supply, since over time these banks tend to reduce the value of money via inflation.
4. Are cryptocurrency a good investment? Cryptocurrency may go up in value, but many investors see them as speculations and not real investments. Just like real currencies, cryptocurrency generate no cash flow, so for you to profit, another person has to pay more for the currency than you did. Bitcoin and other cryptocurrency have been anything but stable through much of their history. For example, while Bitcoin traded at close to $20000 in December 2017, it’s value then dropped to as low as about $3200 ahead later. By December 2020, it was trading at record levels again. This price volatility creates a conundrum. If bitcoin might be worth a lot more in the future, people are less likely to spend and circulate them today, making them less viable as a currency.
5. How do I buy Cryptocurrency? Well some cryptocurrency, including Bitcoin are available for purchase with U.S Dollars; other require that you pay in Bitcoin or other cryptocurrency. To buy cryptocurrency, you’ll need a “wallet”, an online app that can hold your currency. Generally you create an account on an exchange, and then you can transfer real money to buy cryptocurrency such as Bitcoin.
6. How to I secure myself? If you’re looking to buy cryptocurrency in an ICO, read the fine print in the company’s prospectus for this information:
* Who owns the company? A well-known owner is a positive sign
*Are there other major investors who are investing.
* Is the currency already developed, or is the company looking to raise money to develop it; It can take alot if work to comb through a prospectus; the more the detail it had the better your chances it’s legitimate. But even legitimacy doesn’t mean the currency will succeed. That’s an entirely separate question, and that requires a lot of market savvy.
But beyond those concerns, just having cryptocurrency exposes you to the risk of theft, as hackers try to penetrate the computer networks that maintain your assets. One high-profile exchange declared bankruptcy in 2014 after hackers stole hundreds of millions of Dollars in Bitcoin. Those aren’t typical risks for investing in stocks and funds on major U.S. exchanges.