Everyone has heard how Bitcoin and other cryptocurrencies have made millionaires out of those they bought a year ago. Gains of 1,000% or more are not only possible, but common to many of these cryptocurrencies. Someone who bought Bitcoin in May 2016 for less than $ 500 would have gained 1,400% in about 17 months. Then we saw in the past few days that Bitcoin had lost almost $ 1,000, so it would be hard to say that these cryptocurrencies are unstable.
Since the beginning of Bitcoin in 2008, we at Trend News have been skeptical about the ability of cryptocurrencies to survive, as they pose a very clear threat to governments that want to see and tax all transactions. But while we may still be wary of real cryptocurrencies, we are very aware of the potential of the underlying technology that drives these electronic currencies. In fact, we believe that this technology will be a significant disruption to data management and will affect every sector of the global economy, much like the Internet has affected the media.
Here are some questions and answers to get you started …
Q: What are cryptocurrencies?
The most famous cryptocurrency (CC) is BITCOIN. It was the first CC, launched in 2008. Today there are more than 800 CCs, including Ethereum, Litecoin, Dash, Zcash, Ripple, Monero, and they are all “virtual”. There are no “physical” coins or currencies.
Q: How do CCs work?
CCs are virtual currencies that exist in very large distributed databases. These databases use BLOCKCHAIN technology. Since every Blockchain database is widespread, it is considered immune to hacking, because there is no central point of attack and every transaction is visible to everyone online. Each CC has a group of administrators, often called “miners”, who validate transactions. One CC called Ethereum uses “smart contracts” to validate transactions. Crypto TREND will give more details in the coming news.
Q: What is BLOCKHAIN?
Blockchain is a technology that supports all CCs. Each transaction for the purchase, sale or exchange of CC is entered in the BLOCK that 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 application in many other industries.
Q: Are CC exchanges regulated by the government?
Basically, the answer is NO, which is a big attraction for some users of this market. At the moment, it is the “Wild West”, but governments in most developed countries are examining this market to decide which regulations might be needed. The big decision is whether to treat CC as a currency or a commodity / security. Canada and the US have so far stated that CCs are legal, however the situation remains fluid in terms of reporting and tax implications. Crypto TREND will monitor 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 intermediaries. You start by selecting the stock exchange, setting up an account and transferring the fiat currency to your account. Then you can place your BUY and SELL CC orders. There are many exchanges around the world. Opening an account is quite simple and all these exchanges have their own rules on initial financing and withdrawal.
Crypto TREND will recommend CC exchanges in the future.
Q: Where should I store my CC?
To have the freedom to move your cryptocurrencies and pay bills, you will need to have a digital wallet. These wallets come in several formats, such as desktop, cloud based, hardware (USB), mobile phone and paper. Many of them are FREE, however, security is a big factor because no one ever wants to lose their wallet or have it stolen. 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 cryptocurrency for some financial transactions, such as money transfers and bill payments. The list of companies that accept cryptocurrencies is growing rapidly and includes big players such as Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynga, Subway and WordPress.
Q: What’s next?
Initially, we will keep each Crypto TREND article short and keep the scope of each one as narrow as possible. As mentioned earlier, we believe that cryptocurrency technology will change the game and that potential investment opportunities like this will occur once or twice in a lifetime. Make no mistake, investing early in this sector will only be for your most speculative capital, money you can afford to lose.
Even if you don’t want to invest at the moment, an early understanding of this new disruptive technology will put you in a good position to profit from our recommendations as we progress.
Expect to see more news and concrete recommendations from Crypto TREND as we embark on this journey into what may seem like a foreign jungle at first glance. This is an unstable market and may not be to the liking of all investors, however, Crypto TREND will be your guide if and when you are ready.