Tag: crypto

Cryptocurrency is decentralized digital money, asset, and network that are based on blockchain technology. It can be mined or purchased. Bitcoin is the first of its kind and by a large margin, the most popular cryptocurrency among over 5,000 different cryptocurrencies. Bitcoin was founded in 2009 and developed by Satoshi Nakamoto. Today, people with an interest in cryptocurrency, they're a major aim to trade for profit. Here are some key concepts. But, before you get started, check out all you need to know about cryptocurrency in general. Safety and Security Bitcoin network has never been hacked. Almost all the cryptocurrencies like Bitcoin, Ethereum, Bitcoin Cash, and Tezos are secured with a technology called a blockchain. It is open to everyone! That is, it doesn't require the involvement of regulatory authorities or bodies. What's more, numerous computer scientists and cryptographers constantly examine all aspects of the network and its security. Privacy In cryptocurrency, your financial information is protected and secure. This can be traced to traders not providing personal information before buying or selling. More so, transactions in cryptocurrency require little financial information. More interestingly, there is little or no risk of your sensitive financial information being exposed. Since no sensitive information will be sent over the internet or via a third party, consider your privacy secure. Transferability Transactions in cryptocurrency make payments to people all around the globe quite easy like making payments to a local store. Transparency Manipulation of transactions is nearly impossible because every transaction on Bitcoin and other cryptocurrencies is publicized. Transactions stored in the Bitcoin network are traceable. Portability No matter the region or location you are in the world cryptocurrency is available and tradeable because it isn’t under any financial regulatory body. Irreversibility Bitcoin is very difficult or impossible to reverse cryptocurrency transactions. It highly reduces the tendency of being scammed or defrauded. This digicoin has made commerce cheaper for traders of crypto by eliminating high-processing chargers. WHAT IS CRYPTOCURRENCY MINING Mining is the process of generating/creating new coins (Bitcoin, Ethereum, etc.) and verifying transactions in the process. Most cryptocurrencies are mined via decentralized networks of computers around the world by frequently verifying and securing the public blockchain ledger and adding new transactions. HOW CAN YOU MINE CRYPTOCURRENCY? New coins/currencies are released through mining in return for verifying transactions in cryptocurrency. Formerly an average person can easily mine cryptocurrency, but it is quite difficult in proof of work systems, like Bitcoin. Spencer Montgomery, founder of Units Crypto Consulting says “As the Bitcoin network grows, it gets more complicated, and more processing power is required.” He also said, “The average consumer used to be able to do this, but now it’s just too expensive. Some people have optimized their equipment and technology to outcompete.” From estimation, 0.21% of all the electricity in the world goes to powering Bitcoin farms. This is approximately the same amount of power Switzerland uses in a year. Also, it is estimated that most Bitcoin miners end up using 60% to 80% of what they earn from mining to cover the cost of electricity. In a proof of work system, it is not feasible for an average person to earn cryptocurrency by mining. However, the proof of stake model does not require high-powered computing. This is because validators are chosen at random based on the amount of the stake. However, it is mandatory that you already own a cryptocurrency to participate. Remember, you have nothing to stake if you have no crypto. IS CRYPTOCURRENCY SAFE AND SHOULD YOU INVEST? The way cryptocurrency is structured and built using blockchain technology. Blockchain narrates the way transactions are recorded into “blocks” and time-stamped. This cannot be easily changed after creation and it’s tough for hackers to meddle with. That is because blockchain involves a technical process that results in a digital ledger of cryptocurrency transactions. Since crypto is a highly unpredictable investment, with the possibility of enormous price swings, experts hold mixed opinions about investing in crypto. Some financial advisors don’t recommend people invest at all. Furthermore, when making a transaction a two-factor authentication code is required for the process. This means to start a transition, you will be told to input a username and password, then you might have to input an authentication code sent to your cell phone via text. Here's an instance: Bitcoin nearly quadrupled in value throughout 2020, closing out the year above $28,900. By April 2021, the price of BTC had more than doubled from where it started the year, but all those gains had been lost by July. Then BTC more than doubled again, hitting an intraday high above $68,990 on November 10, 2021—and then dropped to around $46,000 at the end of 2021. As you can see, cryptocurrencies can be very volatile. While securities are in place, that does not mean cryptocurrencies are un-hackable. Several high-dollar hacks have cost cryptocurrency start-ups heavily. Hackers hit Coincheck to the tune of $534 million and BitGrail for $195 million, making them two of the biggest cryptocurrency hacks of 2018. Unlike government-backed money, the value of virtual currencies is driven entirely by supply and demand and can create wild swings which lead to remarkable gains or big losses for investors. Cryptocurrency investments are subject to far less regulatory protection than traditional financial products like stocks, bonds, and mutual funds. That’s why Peter Pavilion, a certified financial planner (CFP) in East Norwich, N.Y., thinks it’s safer to stick to the currency that’s backed by a government, like the U.S. dollar. CRYPTOCURRENCY SCAMS AND FRAUDS Sadly, cryptocurrency crime is increasing frequently. A lot of investors, companies, and individuals have lost their hard-earned money to cryptocurrency scams and frauds. We don’t want you to fall victim; here are four popular cryptocurrency scams to look out for. Virtual Ponzi schemes: Cryptocurrency criminals create the illusion of massive returns by paying off old investors' money and they promote fake opportunities to invest in digital currencies. In December 2019 a scam operation, BitClub Network, raised more than $700 million before its culprits were indicted. Fake websites: There are bogus sites that feature fake testimonials and crypto jargon promising huge, guaranteed returns, provided you keep investing. Romance scams: Over time people have fallen victim to romance scams via the internet. The FBI’s Internet Crime Complaint Centre fielded more than 1,800 reports of crypto-focused romance scams in the first seven months of 2021. That scam alone caused a loss worth $133 million. The FBI warns of a trend in online dating scams, where fraudsters persuade people they meet on dating apps or social media platforms to invest or trade in virtual currencies. “Celebrity” endorsements: Online scammers impersonate themselves as a well-known billionaire who makes fake promises to multiply your investment in a virtual currency. In the end, they steal what you send instead of multiplying. They encourage investors by starting rumors on messaging apps or chat rooms about a famous businessperson that is backing a specific cryptocurrency. Through this action, scammers trick investors to give them money. There are other cryptocurrency scams where criminals break into digital wallets to steal virtual currency. Fraudulent sales pitches for individual retirement accounts in cryptocurrencies, and more. IS CRYPTOCURRENCY SAFE? Cryptocurrency is structured with a technology called "Blockchain". This sophisticated technology describes the way transactions are recorded into blocks and time-stamped. With the huge security in place, it doesn’t mean cryptocurrency can’t be hacked. Hackers hit Coincheck to the tune of $534 million and BitGrail for $195 million, making them two of the biggest cryptocurrency hacks of 2018. Meanwhile, cryptocurrency is driven entirely by demand and supply it is not money backed by the government. WRAPPING UP In this article, we focused on the key concepts, mining crypto, and reasons you should invest in cryptocurrency. Investing in cryptocurrencies like Bitcoin which is the most popular version can be profitable with lots of benefits.

Tag: crypto

Bitcoin Key Concepts For Freelancers

11 Things To Know Before Investing In Cryptocurrency

What Is Cryptocurrency – Introduction To Cryptocurrency

ABOUT US

CATEGORIES

CONTACT