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What is Cryptocurrency?
Cryptocurrency or “Crypto” is a digital medium of exchange secured by cryptography. In simpler terms, it’s a payment system secured by a bunch of codes. Cryptocurrency is a virtual currency that can be used only on the internet. It is based on blockchain technology which is a distributed ledger that records transactions across multiple computers in the network (nodes).
The first and most famous cryptocurrency is Bitcoin, which has gained popularity in recent years by providing an alternative to our current financial system. According to CoinMarketCap, there are currently more than 11 thousand cryptocurrencies that arose after Bitcoin. Together they are called altcoins.
Altcoins
Altcoins or alternative cryptocurrencies are all those cryptocurrencies that appeared after Bitcoin. The great majority of them use blockchain technology but they are each unique and provide different services to help in different areas of our everyday life such as finance, health, content ownership, etc. In the early years of cryptocurrencies, Bitcoin made up more than 95% of all cryptocurrencies, making altcoins less popular. As of today, August 25th, Bitcoin’s domination is around 66% and some Cryptocurrencies are growing rapidly such as Ethereum and Cardano.
How can you use cryptocurrencies?
You can use cryptocurrencies to buy goods and services or trade with them. With the recent growth in the adoption of cryptocurrencies, many companies opened their doors to crypto payments so you can buy basically everything from food and clothes to cars and airplane tickets. Also, cryptocurrencies have provided high returns in recent years which opens the possibility for a potentially good investment.
Should you invest in cryptocurrencies?
While investing in cryptocurrencies sounds like an easy way to earn money, one should be very careful and prepared when starting to invest. Cryptocurrencies are known for being one of the highest risk and most volatile assets there is. Volatility can be very challenging, especially for a new investor.
If you are to invest in cryptocurrencies, be sure to educate yourself first on the risk that comes along.
How can you buy cryptocurrencies?
You can buy crypto through cryptocurrency exchanges such as Coinbase, Binance, Gemini, etc. They differ based on residence, fees, and options available.
Conclusion
Cryptocurrencies have become extremely popular in the last few years in line with their price, which has risen sharply. New projects come out daily, which contributes to the development of the industry. An additional push is given by large corporations that hold part of their money in cryptocurrencies. Given the value they create, I can say with certainty that cryptocurrencies are here to stay. The only question we need to ask ourselves is which projects, or better say cryptocurrencies, will be the ones that will survive and fully develop.
