As news of substantial wealth in ordinary communities hits the headlines of your newspaper, it might start to become apparent that your everyday cash and coins are not as sought after, or as valuable, as they once were. In fact, there’s a new form of cryptocurrency that is putting dollar signs in people’s eyes instead.
Cryptocurrency, also known as a decentralized digital currency, is taking the market by storm. Everyday internet users are emptying their savings accounts, in search of more bang for their buck. It’s so popular that even the Bulgarian Government, which seized a substantial amount of Bitcoin in December, is looking to use it to clear a fifth of their national debt. However, for those who are new to the phenomenon, it can be frustrating. You might not have the knowledge to secure your own piece of the pie, and you might not be familiar with how it all works. Even if you know the idea of more money sounds good, there can be confusion about how to turn it into reality.
To help ordinary people to become avid cryptocurrency investors, we’ve compiled an informative article that outlines what cryptocurrency is and what the main cryptocurrencies are. Once you’re up-to-date with the most popular cryptocurrencies, you can then look at investing in them. By merely opening this article, you’re halfway there.
What is cryptocurrency?
We know regular currency is what we carry in our physical wallet. It consists of coins and notes, and once used during a transaction, can be given back to you as even smaller amounts of coins or cash known as change. We grow up with this form of currency, and it’s widely used around the world. However, cryptocurrency is entirely different, with just a few similarities to our current and most commonly used form of currency. Cryptocurrency is a digital asset – meaning it exists on the internet. It works as a medium of exchange, using cryptography to secure transactions and control the quantity and validity of the assets.
The first form of cryptocurrency was Bitcoin, and it’s currently worth, as of December 2017, 21,900.96 Canadian Dollars. However, it’s that volatile that within a matter of days, you could see this drop or increase by thousands. In fact, in just a few days, investors were noticing a considerable increase in their investment.
Bitcoin was created in 2009, operating as a decentralized form of currency that isn’t controlled by any given person. From the creation of Bitcoin, numerous types of cryptocurrency were established, and have now been given the name altcoins. Altcoins, or alternative coins, refers to any cryptocurrencies that aren’t Bitcoins.
In essence, cryptocurrencies are a type of money that you can’t touch, but you can see it and watch how it’s growing (or dropping) in value online.
What are the main ones?
For those who like what they see, and are interested in getting a taste of the action, we’ve outlined a few of the most popular cryptocurrencies below.
Bitcoin, as it stands currently, is the most valuable cryptocurrency available. It continues to grow in value at a rapid pace and has been invested in by up to 5.8 million unique users. Bitcoin operates without a central bank, and transactions take place in what is commonly known as a blockchain – or public ledger. Over 100,000 merchants accept Bitcoins as a valid payment method, and it’s only a matter of time before you’ll see that figure triple.
Similar to Bitcoin, Ethereum is an open-source, public blockchain platform that executes scripts using public nodes. While it provides a decentralized Turing-complete virtual machine, it also has its own form of cryptocurrency known as Ether. Ether can be transferred between accounts, and you can use it to compensate participant nodes for computations performed.
Ethereum, and the consequent Ether was developed in 2013 by Vitalik Buterin, a cryptocurrency researcher, and programmer. Since its inception, it has been split into two separate blockchains known as Ethereum (ETH) and Ethereum Classic (ETC).
If Bitcoin is a little out of your price range, but you like the way in which it operates, Litecoin could be the next best thing. While it’s worth a significant amount less than its counterpart, there is still so much room for growth, and it’s considered one of the most popular forms of cryptocurrency to date.
Operating similar to Bitcoin, Litecoin is a peer-to-peer open source software project and cryptocurrency. It has a lightning fast transaction rate, and also offers a zero-payment cost. Currently, it’s worth 280 Canadian Dollars.
If you’re confused by the different cryptocurrency exchanges, Dash is an excellent investment to make. Like other cryptocurrencies, it’s an open source peer-to-peer currency that’s user-friendly and offers instant transactions. It operates using a self-governing and self-funding model, which gives it the label of being a decentralized autonomous organization.
Ripple operates slightly differently to other cryptocurrencies. It’s a real-time gross settlement system and is built upon a Ripple protocol. It has a consensus ledger and offers its users a cryptocurrency called XRP (ripples). Ripple is relatively new and provides a secure and instant global financial transaction that’s quick, easy and straightforward. As such, it’s used by many banks and payment networks.
If you’re a frequent visitor to internet forums, you would have come across Doge, a legitimate yet hilarious cryptocurrency. While it can’t easily be used to make purchases, it’s commonly used on forums as a tipping system. It has a current capitalization of 308 million US Dollars, with close to 5.3 billion coins being mined every year.
Whichever cryptocurrency you choose to invest in, ensure you do your research. While investment is no ‘get rich quick scheme,’ it can open the doors to a far more lucrative lifestyle, especially when you know where to look.