What is Cryptocurrency?

Cryptocurrency

The first time I heard about cryptocurrency was when Bitcoin hit US$12, it was mention on the news but I didn’t pay much attention to it!

The second time I took notice of cryptocurrency was at the beginning of 2017 when someone told me about Ethereum, they told me to invest in it because it was gonna be the next big thing!

I still didn’t take any notice of cryptocurrency, I can really kick myself for not making the effort back then to look more into it! We all learn from our mistakes I guess!

Cryptocurrency When Ethereum hit the US$150 mark and was mentioned in the news, I was kinda forced to take notice of this booming cryptocurrency!

That was it – I decided I’m gonna invest in Ethereum and see what happens!

Investing in cryptocurrency wasn’t as easy as I thought. After a few days of doing some research on where to buy Ethereum and how to store them. I decided to go for it and I made my first ever investment in Cryptocurrency!

I was the proud owner of Ethereum! My first ever Cryptocurrency!

This investment in cryptocurrency is probably the best decision and investment I’ve ever made in my life!

I must admit I didn’t pay much attention to my investment for the next few months and one morning in December 2017, I decided to look at my wallet. I bought Ethereum at US$150 and when I looked on that morning the price for one was up to US$790 or something around that!

Ethereum reached a all time high of US$1377 in January 14, 2018 and I was just blown away!

Cryptocurrencies has the potential to make you a lot of money but it is also a very volatile market and you can loose a lot of money too! Currently the Ethereum price is at US$1058, which is still unbelievable and I’m so grateful but as you can see in a short space of time it went up like crazy but it also dropped like crazy!

I just wanted to share my story of how I got involved in Cryptocurrency!

For those of you who are completely new to the Crypto World, I hope this article will help you understand more about cryptocurrencies!

I’m no expert and the Crypto world is still very new to me too!

What is Cryptocurrency?

Cryptocurrency is a digital asset designed to work as a medium of exchange of assets or money or anything of value.

It uses cryptography to secure the transaction and to control the creation of additional units of the currency.

This essentially means that through principles of cryptography electricity is converted into lines of code that gain monetary value.

Most Cryptocurrencies are designed to decrease in production in order to avoid inflation.

Bitcoin was the first cryptocurrency and was released in 2009, its currently the biggest and most popular currency!

After Bitcoin there were other crypto currencies released including Litecoin and Namecoin released in 2011 followed by Peercoin in 2012.

Other Cryptocurrencies followed and they were incorporating some unique features – for example Gridcoin with computing power contribution, Omni with the first communication protocol and Burst with the first smart contracts (also called crypto 2.0)

Cryptocurrency – The Magic Book Analogy

I found this in a video and I thought it was a great way to describe and explain what a cryptocurrency is and how it works!

So Imagine there is a magic book and everyone in the world have access to that magic book. Everyone can also write into that book. If you write something into the book, it appears almost instantly to everyone having access to that book. Also nobody can delete anything from that book!

So if I own 1 Bitcoin and I decide to give that to my friend Patrick and enter that into the magic book, 1 Bitcoin will be given to Patrick and I will loose one Bitcoin!

The great thing is everyone that has access to this book can check and see that I’ve given one of my Bitcoins away to Patrick!

It Goes a bit further than that… With Something called ‘Smart Contracts’ we can also add conditions in the book! For example, If it snows in London on April the 1st, I will give patrick 1 Ethereum….. So if it snows on April the first in London, I will loose 1 ethereal and Patrick will gain 1 Ethereum.

It cannot be changed because you already entered it into the book for everyone to see.

Cryprocurrency 2.0 – Smart Contracts

Burstcoin was the first to implement Smart contracts in 2015!

Smart Contracts enables many things to run on the blockchain which would otherwise have to be individually programmed in.

Smart Contracts can include a variety of functions like predictions, auctions, crowdfunding, lotteries and many many more!

The Ethereum Blockchain platform is the Most Popular platform and its also the second biggest Cryptocurrency!

Smart Contracts are gaining massive traction with several alternatives to Ethereum being available including but limited to:

  • Ethereum Classic
  • Counterparty
  • Burst
  • Ubiq
  • Waves
  • Neo
  • Bitshares
  • Stratis
  • Lisk

They each are trying to do something els or tries to improve on some of the solutions or to implement new solutions.

How to Buy Cryptocurrency?

Main Cryptocurrencies like Bitcoin and Ethereum can be purchased with fiat money through services like Coinbase, Kraken, Gemini or others.

You usually have to provide some form of identification to use these services (to protect from fraud) and and after you do that you can either use your debit/credit card or a bank transfer to buy cryptocurrency!

Those services also allow you to sell your cryptocurrency for fiat!

Less popular crypto currencies have to be traded for Bitcoin or Ethereum via exchanges like Bittrex, Cryptopia or others.

How to Store your Cryptocurrency?

Cryptocurrencies can be stored on exchanges. I would not recommend this for long term. If you can send it out of an exchange immediately, I will!

Ideally you want to get your own wallet. There are many wallets available. Most cryptocurrencies have there own wallets available to download from their websites or you can use a wallet that stores several cryptocurrencies at once.

There are also different types of wallets, including online wallets, desktop wallets, hardware wallets, mobile wallets and paper wallets. Each have advantages and also disadvantages.

What is the Future of Cryptocurrency?

I think the future of Cryptocurrencies are very bright!

I’m looking forward to seeing how the market grows as more and more people get involved in this new and exciting world.

Cryptocurrencies are still at a very early stage and there is so much room to grow and develop.

I truly believe cryptocurrency can change the world and internet as we know and I for one do not want to be left behind.

I want to be involved in this new world and I’m definitely investing in the Cryptocurrencies I believe in. Lets see what the future holds!

There are also exciting new developments in the sector called Cryptocurrency 3.0.

I’m not completely sure which cryptocurrency will be the next big thing that could be called 3.0!

Speculations are:

IOTA – using Tangle ledger is able to settle instant transactions with zero fees.

Tezo – self governing blockchain that rewards protocol development.

EOS – Blockchain operating system designed to support commercial decentralised applications.

My money is on EOS personally, but everyone has to make up their own minds on who they want to invest in.

I hope this post helps you understand cryptocurrency a little better.

Feel free to leave a comment with your thoughts on cryptocurrencies and also the once you support!

I’ve never been into investments before and since I started trading in cryptos my life has become so much more exciting!

Please note: I’m not a financial adviser and none of what is written on this page should be taken as advise, I’m only sharing my opinion on this! 

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