What is cryptocurrency and is it profitable investment
Cryptocurrency is a digital currency that emerged in January 2009, with the first currency being called Bitcoin. It is a cryptocurrency also called virtual currency.
It could also be defined as an “online” version of money. It is possible to use it to buy products and services, and more and more businesses accept it.
This virtual currency was born following the real estate crisis of 2008 in a context of uncertainty and distrust of traditional monetary systems.
The concept of Bitcoin is presented in a white paper written by the mysterious “Satoshi Nakamoto”. He is considered to be the creator of this technology and whose true identity is unknown.
This cryptocurrency promises lower transaction fees than other traditional online payment mechanisms. However, its real advantage is its decentralization, in contrast to currencies created by governments.
There is no physical cryptocurrency. This currency is entirely virtual and is based on balances kept up to date on a public register accessible to all. Bitcoin is created, distributed, exchanged and stored through this decentralized ledger called Blockchain.
Likewise, all crypto transactions can be viewed seamlessly. These transactions are verified by a system that requires immense computing power.
Due to its meteoric popularity, Bitcoin has launched a real trend. Many other cryptocurrencies have since emerged. They are called “altcoins”. Many of them are also very popular for investment, such as Ripple, Dogecoin etc. In XRP Rich List, you can see who are the richest owners of Ripple altcoin. However, “BTC” remains the most important cryptocurrency in terms of capitalization.
Investing in cryptocurrencies
Bitcoin and some other altcoins can be used as a means of payment for many products and services. However, to get rich, it is also possible to invest in cryptocurrency, the value of which changes over time.
Many people are convinced that this virtual currency represents the future of the financial system. Cryptos makes it easier, faster and cheaper to pay and therefore has many advantages over traditional currencies.
Exchange rates are also often attractive. People often choose to exchange their savings in euros or dollars, or even commodities like gold, for bitcoins.
Unfortunately, the capital gains made thanks to Bitcoin are now taxed by the tax authorities, as in many countries. Despite this, investing in BTC can still bring in a lot of money.
As with any asset, the principle of investing is to buy bitcoins when the price is low to sell them when the price is high. The most common way to buy bitcoins is through an “exchange” type platform. Coinbase, eToro, are some examples of popular exchange platforms.
However, beware that Bitcoin is a high-risk investment. Many people have gone broke thinking of making a fortune because the price of BTC can rise dramatically and collapse overnight.
If you want to avoid risks related to investing in cryptos and not fall into the trap of scammers, go for reliable crypto exchange platforms. Also, always check if the platform is regulated, offers various trading accounts, and has positive opinions on the forums related to the crypto sector.