Cryptocurrency, also known as crypto, is a digital currency that can be used to buy services and goods.
They have an online leader who should have strong cryptography (a skill to secure communication techniques like using a secret key) so the transaction would be secured. Interest from this is being traded for profit.
Below are the frequently asked questions about cryptocurrency:
What really is a cryptocurrency?
It is a payment which can be exchanged for goods and services online. Currencies here are called tokens which will be the one you can exchange for goods and services.
Tokens in crypto are like those we can see at the arcades. To access the goods like fluffy plushies, you have to exchange your real money for that token.
Cryptocurrencies work using blockchain. It is a technology, actually a system of recording information in a certain way which makes it impossible to somewhat hack or change nor cheat. Mainly because it doesn’t have a central point, informations are stored in different computers simultaneously across the internet. So it is really impossible to steal the data.
Different Cryptocurrencies And Their Worth
According to CoinMarketCap.com, there are 14,500 different kinds of crypto that are being traded publicly. As per Nerdwallet, these are the best cryptocurrencies by market capitalization tracked by CoinMarketCap (crypto currency data analytics) as of 2021, 19th of November.
|Binance Coin||$94.3 billion|
|USD Coin||$34.4 billion|
Why Is Crypto So Popular?
This is appealing because :
- Because they are going up in value and no interest
- See the crypto as the currency of the future
- Cryptocurrency somewhat removes the bank from managing money supply which has the tendency to reduce the value of money because of inflation
- Security because of the blockchain
Is It Good As An Investment?
This is one of those risks. You can get rich or lose all you got. It is a good investment if you want to gain direct exposure to the demand for digital currency.
However, some investors see them more like speculations and not real investments. Merely because for one to profit, someone has to pay more for the currency than you did or else there would be no cash flow.
How To Buy Crypto And Is It Safe?
To buy, of course you have to have a “wallet or e-wallet”. Where you can exchange real money for a token. And if you’re worried if it’s legal, yes it is and they are actually legal in the United States but in China, it is banned.
One should also be watchful from fraudsters who see crypto as an opportunity for their own hidden-agenda.
How am I supposed to protect myself from crypto scam?
To protect yourself, you have to know these things :
- Company owner, an identifiable owner is a good sign.
- Well known investors, for sure before they invested, they have knowledge about it and they can see potential in it.
- Is it already developed?