Ever since Bitcoin was released back in 2009, the digital currency eco-system has been busy and growing. New ideas, different use cases, new target markets, a whole slew of new digital currencies that are worthwhile taking a closer look at. Whether your an investor, entrepreneur, store owner, artist, gamer, whichever field you work in, there will be a use case that all of us will be able to apply into our daily lives in the near future.
i'll post some information to get a better understanding of the digital currency market here.
Any digital currency can be purchased very easily, mainly through bitcoin. There are ways to exchange to others without the need of registration or any personal information thanks to how digital currencies work!
In the above image, you'll see the top 7 digital currencies. Each with its own blockchain and unique use case. There is currently 1000+ different kinds of digital currencies listed on that site, many of them are just trying to swindle you while others are building status quo changing use cases.
How do digital currencies work?
A simplified explanation.
Each digital currency is built on predetermined rules, rules that once added cannot be changed by any individual or small groups, even the creator. For example, core developer of Dash, Evan Duffield has no control over Dash but continues coding improvements for the Dash network. If Evan has an update for Dash, he releases the code to the public and then it gets audited. If the the addition of the code is something that will help improve the network, it is then voted on by the miners(though Dash uses something called Masternodes for voting and funding projects). Read up on Dash under investment opportunities.
Each digital currency has scarcity to it, some have yearly inflation that lasts forever and others are hard capped, Bitcoin is set at 21 million and dash is capped at 18 million coins. Scarcity is a factor of the price but its not the only thing. There are digital currencies out there right now that are solving real-world business problems. Currencies that can pay out derivatives, currencies backed by physical gold and only you have access and control over. Sell CPU power(in exchange for digital currency) from your computer, sell extra hard drive space(you're not using that extra space anyways!).
Theres a new term out there, ICO(Initial coin offering) where these startups raise funding to begin development on the proposed project. The raised funds are then allocated for different purposes like marketing, developer funding, bug bounties, ect. If you participate in a ICO, you will recieive a certain amount coins depending on ICO terms and your investment(Investments can be as low as $1).
There are a ton of incredible uses cases coming from this technology and this is just the beginning.
Make sure to check out some of the projects im keeping an eye on, under investment opportunities and subscribe to not miss out!
Investing in Digital Currencies
For those of us, who are less tech savvy than others, digital currencies are the internet based medium of money exchange. Which is different than physical banknotes and coins, that are seen with physical currencies. Digital currencies, can be instantly transacted, and can be transferred over borders easily.
No matter how far away from digital currencies you are, there will come a time when you will read or hear about crypto currencies. Over the past few years bitcoin, was able to outperform any other investment such as stock market, real estate, and gold. We have seen no less than hundreds of digital currencies come into the market, and most of them were merely copycats or just had one simple feature that set them apart. There were only a handful of them that made it out of them mess, and are seen to disrupt their industry.
Some of the interesting digital currencies out there:
Difference between Digital currencies and Blockchain
Whereas bitcoin, Ethereum, Ripple, Monero, Factom, etc. are digital token currencies that allow you to pay for goods and services all around the world, they have large servers that keeps check on the legitimacy of transactions 24/7; so that no government or bank needs to be the middleman. The computers are also required to keep a track of your balance, and share them online like a shared public ledger. This shared ledger allows people to check if they have received the amount they were suppose to, along with checking if the amount they send went through successfully. Once the transaction is marked as legitimate, everyone’s balance is updated. This public ledger that carries all the transactions is known as blockchain. They are used to keep records, but can also be used to revolutionize the financial sector.
Along with many benefits of digital currency, such as low transaction rates, and the flexibility to make a payment at any given moment is appealing; on the other hand the risks around payment beneficiary identification, security, and currency vapourization is a huge concern in the business market. Despite the unknowns, many corporations have started to open their doors for digital currencies. Here are the most important things you should consider before making a cryptocurrency investment:
Speculating, not Investing
There is no doubt that digital currencies have a bright future, and will one day be a powerful way to conduct commerce. Which does not mean that their current value is sustainable. It is still in its early days, even though many companies are opening their doors towards them; it does not mean it is big enough to turn it into a legitimate trading system. For now, buying cryptocurrencies is more speculative, than investing. Until and unless you are ready to start spending them.
The most common benefits of using cryptocurrency are that it offers cheaper transactions, it has zero transfer fees internationally, no account fees, easy to create an account, and it can be a huge investment in your future.
When you put your money in a bank, they use your money to make financial trades to gain profit for themselves. So you have to really trust them to have all your money ready when you need it. After the 2008 aftermath, many banks did not have enough to give their customers what they owed them. The local government stepped in and had to pay them, so they can pay the people back. When you hold money as digital currency you alone have the power to spend it. As there is no bank involved, and you will never lose this money due to someone else’s shortcomings.
If you are not careful with your wallet, there is a chance someone might steal it. You can use secure wallet softwares to keep your wallet away from hackers. It is generally a good idea to avoid exchanges that do not have a good reputation. Pick a strong password, not something that can be easily cracked. Try to use two factor authentication wherever you can. It is okay to be more paranoid when it comes to cryptocurrency.