Digital Money – The Basics Of Cryptocurrency

Digital Money

Money is something that comes in a plethora of shapes and forms these. Electronic payment methods have recently surpassed the worldwide embrace of paper currency. Not only does this mean the spender no longer needs to carry money physically, but the simple ‘swipe to pay’ or ‘click here to pay’ methods are more accessible. However, there is an even newer player on the field. In an article on the website www.cointelegraph.com, the author points out another non-physical currency that is currently taking the world by storm – cryptocurrency.

Cryptocurrency is derived from the software cryptography that gives it its value. It uses a system of ledgers called a blockchain for distribution. Unlike physical currency that is specific to a region, easily counterfeited and prone to demonetization and devolvement, cryptocurrency is far more secure during payments, has a traceable source, is decentralized and private. Bitcoin was the first company to delve into the world of cryptocurrencies and create the interest and the crowd we see today in the field. By harnessing this technology, investors intend to build further upon the 400% gain they have achieved over the past year.

A great example of this type of investor interest is the profit that bitcoin experienced since its inception. Simply look at the price inflation of bitcoin over the years to understand the robust profits to be gained. If you, as an investor, had repurchased even a fractional of bitcoin during its inception when it was worth next to nothing, that initial investment would have grown astronomically now. To put it into perspective, if an investor repurchased US$5 worth cryptocurrency in 2010, it would currently be worth US$4.4 million, climbing nearly 60,000%. It is simply a matter of waiting for the right time to sell.

Investors, especially those new to the field, should remember that any type of cryptocurrency is a speculative investment. The price gains each currency experiences depends entirely on the willingness of their respective investors to wager on their value in the following years. However, cryptocurrency is not to be confused with stock and shares that companies want to sell. Cryptocurrency does not possess any rights of ownership right, produce any revenue or generate earnings to be distributed as dividends. In fact, they are more akin to a single value, tradable assets. In the forthcoming years, many experts believe that cryptocurrency will replace PayPal and other similar services.

Cryptography primarily focuses on the security of the information set between the parties involved, which theoretically makes it safer than any other form of information transfer. Cryptocurrency and the blockchain theory that provides a backbone for these assets pose a revolutionary take on currency like never before. Merging technology with currency has become an impact that could very well end online and offline transactions as we know it. Not only have investors wagered on the cryptocurrencies themselves, but also on the underlying technology that provides it with its inherent value, which includes the decentralized network and the cryptography itself. As a result of so little being known about the extent of cryptocurrency at this time, investors should speak with a financial advisor before purchasing any form of cryptocurrency.

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