Cryptocurrencies have become a recognizable way of investing in the last few years. There are more and more companies, but also private individuals who see in them a way to save or make money. Although their status is still not regulated in most countries, the fact is that people are showing increasing interest in it day by day.
What are cryptocurrencies?
Cryptocurrencies are money that exists only in digital form. However, this diminishes their importance. What is specific about them is that they are decentralized, which means that there is no central authority (Government, bank). What gives cryptocurrencies a special advantage is blockchain technology, which enables secure peer-to-peer transactions, which means that no third party is required for transactions. Blockchain uses innovative consensus protocols over a network of nodes, to check transactions and record data in a way that cannot be corrupted. As the system does not rely on a central body, the fees that organizations typically charge are no longer a factor. Therefore, it can be assumed that the transaction on the blockchain is cheaper because the only costs that participants have are the nominal fees used to reward miners or counterfeiters who run a node in the network.
There are thousands of different currencies on the market, but Bitcoin has long been synonymous with this virtual money. Bitcoin was created and released in 2009 by a group of people hiding under the pseudonym Satoshi Nakamoto. If we go back to the very beginning when it was created, we will remember that its value at the time was insignificant and almost equal to zero ($ 0.03). At the time, it was thought that Bitcoin would be successful if it managed to equalize with the US dollar, although the forecasts for that were not the most optimistic. However, what few people expected happened, the value of Bitcoin grew rapidly and, although it had many ups and downs like all other cryptocurrencies, it managed to stay on the throne all these years. Its current value is $ 38,249.30.
Of course, this does not mean that there are no other cryptocurrencies worth investing in – Ethereum, Ripple, Litecoin, and so on. In any case, Bitcoin is maintained on the throne and is a proud representative of other currencies. Yet faith in this currency has been shaken many times. Let’s just remember last year when Elon Musk, the owner of the Tesla company, invested a large sum in this currency, after which its value fell sharply. Still, although it took some time to recover, it worked.
It is clear to everyone that investing in cryptocurrencies is unstable and risky, and that in a short time the investment can double, but it can also melt away quickly. The market is volatile and often seems to have no rules that affect the fall and growth of currencies, but still the desire for quick earnings or hope that in the long run, it is an investment that will end in green is stronger than caution when investing in crypto. The fact is that the value of cryptocurrencies fluctuates greatly over time. This oscillation creates opportunities for those who follow events more closely to take advantage of them and make nice money by buying when the price falls when the price recovers. Due to the volatility of the market, these crashes are much more frequent and those who observe the market for longer are used to it, and even expect it.
There are real “madness” of investors and businessmen in the world, as well as ordinary people for digital cryptocurrencies. Bitcoin has been considered a failed project many times, but each time it manages to win in the market and return to the very top. To learn more about it click here.
Trading and mining
There are two ways to make money when it comes to virtual money – mining and trading. Trading is considered a simpler and faster method because it does not require additional investment, and you also have the help of software applications that use artificial intelligence to monitor the market situation, even when you do not. Trading is also considered a fast method, but that does not mean that mining is negligible. On the contrary, mining is very profitable, but you have to keep in mind additional investment costs such as equipment and high electricity consumption. The chances of making money are higher if you join a mining pool.
Although we know how money has evolved throughout history, and it can teach us and prevent us from making potential mistakes in the future, we do not know where it will surely take us. According to some predictions, the assumption is that it will be digital money. Many companies pay workers a part of their salary through digital money, and in many places, it is accepted as a means of payment, so with Bitcoin, you can pay for tuition, airline tickets, luxury vacations, or dinner at a restaurant.
The development of money will take as long as there are companies. Money is constantly evolving and its roles in society are constantly improving. With some drawbacks, e-money is expanding rapidly, and the main market in which it is traded is certainly the Internet. Although for now this form of money is not accepted globally, people are still skeptical about this form of money because they cannot see it.
No one knows what will happen to bitcoin. Not skeptics, not believers, not even Satoshi Nakamoto. There is no crystal ball. Many of the sharpest minds of cryptography accept this uncertainty, agreeing that we simply do not know. And maybe that’s part of the appeal. The cryptocurrency market has many opportunities that appear unexpectedly and disappear very quickly. It is important to know how to recognize them in time and act accordingly. But one thing is sure – who does not take a risk, does not profit.