Bitcoin, Ethereum, Litecoin, among many other digital currencies have become a trendsetter and for some good reasons. With their growing presence in the market, we notice the wide acceptance of cryptocurrencies through Bitcoin ATM machines. While this is only the beginning, we can expect big moves from other competing cryptocurrency brands in the near future.
What Exactly Is Digital Currency?
Don’t worry if you’re unfamiliar with cryptocurrencies and how they work. Not everyone is aware of this trend, however, those that are have increased chances of greatly benefiting from this craze. In short, a digital currency is an electronic form of money that operates independently from a bank. It holds encryption techniques used to regulate the creation of currency units.
Additionally, the encryptions also verify the transfer of funds, making digital currencies safe and secure. Serving as a medium of exchange, it wasn’t until 2009 when Bitcoin was introduced that cryptocurrencies began to rise in popularity. There were many unsuccessful attempts to introduce digital currency in the 90s.
What Can You do with Cryptocurrency?
Back in the day, finding a merchant or service that accepted digital currency was extremely difficult. Today, there are many providers who accept this form of payment – both online and offline. There are many ways to use your cryptocurrency among them the following;
- Purchase Goods – there are many online realtors, local shops and restaurants that are beginning to accept digital currency, usually Bitcoins. People have also used their currency to pay for hotels, flights, apps, and even college degrees!
- Invest – you may have heard stories about people getting rich from cryptocurrencies. While these stories may be true, it’s important to understand that this sort of investment is very high risk since their market value fluctuates like crazy. Savvy investors typically stray away from cryptocurrencies; however, many individuals have had much success investing within them.
- Share it – you also have the option to send some of your currency to a friend, so they can enjoy it too! This makes for a great gift. Many also like to donate to their preferred charities. This is a great way to give back and buy yourself some happiness!
Aside from Bitcoin, there are many different types of cryptocurrencies. Bitcoin is still the most dominant one as it was the very first ever digital currency created. It is also the more commonly accepted by merchants than other brands. Non-Bitcoin users do have the option of exchanging their coins for BTC’s or purchasing gift cards.
Additional cryptocurrencies include:
- Ethereum – following Bitcoin, this provider is the most valued cryptocurrency. It has been recorded that it has the fastest growing cryptocurrency rate since digital currency was introduced. Ethereum also allows developers to build a series of different distributed apps and technologies that don’t work with Bitcoin. Cryptocurrency advisors like cryptohead.io can help guide you on how to buy Ethereum.
- Ripple – another popular cryptocurrency is Ripple. What makes this brand different is that they do not use a Blockchain to reach a network-wide consensus for transactions. Instead, unlike most digital currencies, they use an iterative consensus process, making it quicker than Bitcoin but also more vulnerable to hackers.
There is so much to love from digital currencies, but they are also considered a very high risk for these reasons:
- While it’s not likely, there is the possibility that cryptocurrency exchange can be hacked.
- Digital currencies are partly unregulated. This means there is always a slight chance of them getting outlawed by jurisdictions.
- Investing in digital currencies is at high risk as prices are extremely volatile. It’s important not to invest until you fully understand the process.
The craze for cryptocurrency makes sense as there are many people who have gotten rich by it! Different from conventional money, this item is not controlled or printed by anyone. Many people are put at ease knowing that large banks are not controlling their money. Compared to traditional bank accounts, users can set up their cryptocurrency account in a matter of minutes.
Additionally, there are no questions or fees collected, which is a huge benefit for consumers. We hope this post has been of help to you if you are wondering what the hype is all about, and if you are considering investing in this market, best of luck!