Everyone has heard that Bitcoin and other cryptocurrencies have created millionaires from those they bought a year ago. Gains of 1,000% or more are not only possible, but have been a commonplace for many of these cryptocurrencies. Someone who bought Bitcoin for less than $ 500 in May 2016 would have a profit of 1,400% in approximately 17 months. Then we’ve seen Bitcoin lose nearly $ 1,000 over the last few days, so to say these cryptocurrencies are volatile would be a big understatement.
Since the founding of Bitcoin in 2008, we at Trend News have questioned the viability of cryptocurrencies, given that they pose a very clear threat to governments that want to see and tax all transactions. But while we can still be wary of real cryptocurrencies, we are very aware of the potential of the underlying technology that drives these electronic currencies. In fact, we believe that this technology will significantly disrupt the way data is managed and will affect every sector of the global economy, much like the internet has affected the media.
Here are some questions and answers to get you started …
Q: What are cryptocurrencies?
The most famous cryptocurrency (CC) is BITCOIN. It was the first CC, launched in 2008. Today there are more than 800 CCs, including Ethereum, Litecoin, Dash, Zcash, Ripple, Monero and they are all “virtual”. There are no “physical” coins or currencies.
Q: How do CCs work?
CCs are virtual currencies that exist in very large distributed databases. These databases use BLOCKCHAIN technology. Because every Blockchain database is widely distributed, it is considered immune to hacking because there is no focal point of attack and every transaction is visible to anyone online. Each CC has a group of administrators, often called “miners”, who validate transactions. One CC called Ethereum uses “smart contracts” to validate transactions. Crypto TREND will provide more details in the upcoming news.
Q: What is BLOCKCHAIN?
Blockchain is a technology that supports all CCs. Each transaction for the purchase, sale or exchange of CC is entered in a BLOCK that is added to the chain. This technology is complex and will not be explained here, but it can lead to a revolution in the financial services industry, as transactions can be executed quickly and easily, reducing or eliminating fees. The technology is also being tested for application in many other industries.
Q: Are CC exchanges regulated by the government?
The answer is mostly NO, which is a big attraction for some users of this market. At the moment, it is the “wild west”, but governments in the most developed countries are examining this market to decide which regulations may be needed. It is a big decision whether to consider CC as a currency or a commodity / security. Canada and the US have so far stated that CCs are legal, however the situation remains fluid in terms of reporting and tax implications. Crypto TREND will monitor and report on these events.
Q: How do I invest in this market?
You can buy, sell and exchange CCs using the services of specialized “stock exchanges” that act as brokerage houses. You first select Exchange, set up an account and transfer fiat currency to your account. You can then send orders BUY and SELL CC. There are many exchanges around the world. Opening an account is quite simple and all of these exchanges have their own rules on initial funding and withdrawals.
Crypto TREND will recommend CC exchanges in the future.
Q: Where can I keep CC?
To have the freedom to move cryptocurrencies and pay bills, you will need to have a digital wallet. These wallets come in several formats, such as cloud-based desktops, hardware (USB), mobile phones and paper. Many of them are FREE, however, security is a big factor because no one ever wants to lose a wallet or steal it. Crypto TREND will recommend digital wallets in the future.
Q: What can I do with my CC?
In addition to investing in CC products, you can also use cryptocurrency for some financial transactions, such as money transfers and bill payments. The list of companies that accept cryptocurrency is growing rapidly, and includes big hitters like Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynge, Subway and WordPress.
Q: What’s next?
As we get started, each of the Crypto TREND articles will be short, and the scope of each will be as small as possible. As mentioned earlier, we believe that cryptocurrency technology will change the game and potential investment opportunities like this once or twice in a lifetime. Make no mistake, an early investment in this sector will only be for your most speculative capital, money you can afford to lose.
Even if you don’t want to invest at the moment, gaining an early understanding of this new disruptive technology will put you in a favorable position to profit from our recommendations as we move forward.
Expect to see more news and concrete recommendations from Crypto TREND as we embark on this journey into what may initially seem like a foreign jungle. This is an unstable market and may not be to the liking of all investors, however, Crypto TREND will be your guide if and when you are ready.