Everyone has heard how Bitcoin and other cryptocurrencies have made millionaires of those who bought as recently as a year ago. Gains of 1,000% or more are not only possible, they are common place with many of these cryptocurrencies. Anyone who bought Bitcoin for less than $500 in May 2016 would have made a 1,400% profit in about 17 months. Then in the last few days, we’ve seen Bitcoin lose nearly $1,000, so calling these cryptocurrencies volatile would be a huge understatement.
Since Bitcoin’s inception in 2008, we at Trend News have been skeptical about the viability of cryptocurrencies, given that they pose a very clear threat to governments that want to track and tax all transactions. But while we may still be wary of actual cryptocurrencies, we are very aware of the potential of the underlying technology that powers these electronic currencies. In fact, we believe this technology will cause a significant disruption in how data is handled and will affect every sector of the global economy, just as the Internet has affected media.
Here are some questions and answers to get us started…
Q: What is crypto currency?
The best known crypto currency (CC) is BITCOIN. It was the first CC, which started in 2008 Today there are over 800 CCs including Ethereum, Litecoin, Dash, Zcash, Ripple, Monero and they are all “virtual”. There is no “physical” coin or currency.
Q: How does CC work?
CC is virtual currency that exists in many large distributed databases. These databases use blockchain technology. Because each blockchain database is widely distributed, it is considered immune to hacking, as there is no central point of attack and every transaction is visible to everyone on the network. Each CC has a group of administrators, often called “manikers”, who verify transactions. A CC called Ethereum uses “smart contracts” to verify transactions. Crypto TREND will provide more details in an upcoming news release.
Q: What is blockchain?
Blockchain is the technology that underpins all CC. Each transaction for the purchase, sale or exchange of CC is entered into a block which is added to the chain. This technology is complex and will not be explained here, but it has the potential to revolutionize the financial services industry, as transactions can be executed quickly and easily, reducing or eliminating fees. The technology is also being tested for applications in many other industries.
Q: Is CC Exchange regulated by the government?
For the most part, the answer is no, which is a big draw of this market for some users. It’s the “wild west” right now, but governments in most developed countries are examining this market to decide what controls might be needed. A big decision is whether CC will be treated as a currency or a commodity/security. Canada and the USA have so far declared that CCs are legal, but the situation remains fluid in terms of reporting and tax implications. Crypto TREND will follow and report on these developments.
Q: How do I invest in this market?
You can buy, sell and exchange CC using the services of specialized “exchanges” that act as brokerage. You start by selecting an exchange, setting up an account, and transferring fiat currency into your account. Then you can place your buy and sell CC orders. There are many exchanges around the world. Opening an account is fairly easy and these exchanges have their own rules about initial funding and withdrawals.
Crypto Trends Will recommend CC exchange in the future.
Q: Where do I keep my CC?
You need a digital wallet to have the freedom to move your crypto coins around and pay bills. These wallets come in different formats, such as desktop, cloud based, hardware (USB), mobile phone and paper. Many of them are free, however, security is a big factor as no one ever wants to lose or steal their wallet 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 crypto currencies for certain financial transactions, such as money transfers and bill payments. The list of companies accepting cryptocurrencies is growing rapidly, and includes big hitters like Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynga, Subway, and WordPress.
Q: What next?
As we begin, we will keep each crypto trend article short and the scope of each one as narrow as possible. As we mentioned earlier, we believe that cryptocurrency technology will be a game changer and potential investment opportunities like this come once or twice in a lifetime. Make no mistake, initial investment in this sector is only for your most speculative capital, money you can afford to lose.
Even if you don’t want to invest at this time, getting a basic understanding of this new disruptive technology will put you in an advantageous position to profit from our recommendations as we move forward.
Expect to see more news and specific recommendations from Crypto TREND as we embark on this journey into what may at first seem like a foreign jungle. It is a volatile market and may not appeal to all investors, however, crypto trends will be your guide if you are prepared.