What is Cryptocurrency Wiki?
A cryptocurrency (or “crypto”) is a digital currency that can be used to buy goods and services, but uses an online registry with strong cryptography to secure online transactions. Much of the interest in these unregulated currencies is to trade for profit, with speculators sometimes raising prices to the sky.
Here are seven things to ask about cryptocurrencies and what to look out for.
1. What is cryptocurrency?
Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service the company offers. Think of them as you would make arcade chips or casino chips. You will need to change the actual currency for the cryptocurrency to access the good or service.
Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of this technology is its security.
2. How many cryptocurrencies are there? What is it worth?
More than 6,700 different cryptocurrencies are publicly traded, according to CoinMarketCap.com, a market research site. And cryptocurrencies continue to proliferate, raising money through initial coin offerings or ICOs. The total value of all cryptocurrencies as of December 18, 2020 was more than $ 645.7 billion, according to CoinMarketCap, and the total value of all bitcoins, the most popular digital currency, was set at about $ 421.7 billion. . (You can check the current price to buy Bitcoin here.)
Top 10 cryptocurrencies by market capitalization
3. Why are cryptocurrencies so popular?
Cryptocurrencies appeal to their supporters for several reasons. Here are some of the most popular:
Proponents see cryptocurrencies like Bitcoin as the currency of the future and are struggling to buy them now, probably before they become more valuable.
Some supporters appreciate that cryptocurrency eliminates central banks from managing the money supply, because over time these banks tend to reduce the value of money through inflation.
Other supporters such as the technology behind cryptocurrencies, the blockchain, because it is a decentralized processing and registration system and can be more secure than traditional payment systems.
Some speculators like cryptocurrencies because they grow in value and have no interest in accepting coins in the long run as a way to move money.
4. Are cryptocurrencies a good investment?
A cryptocurrency can grow in value, but many investors see it as mere speculation, not real investment. The reason? Like real currencies, cryptocurrencies do not generate cash flows, so in order for you to profit, someone has to pay more for the currency than you do.
This is called the “biggest fool” investment theory. Contrast it with a well-managed business, which increases its value over time, increasing the profitability and cash flow of the operation.
For those who see cryptocurrencies like bitcoin as the currency of the future, it should be noted that a currency needs stability. ””
For those who see cryptocurrencies like Bitcoin as the currency of the future, it should be noted that a currency needs stability so that traders and consumers can determine what a fair price for goods is. Bitcoin and other cryptocurrencies have only been stable for much of their history. The value of a Bitcoin is now 140,000 RON, ie $ 35,000 USD, if you want to see the current value enter here.
This price volatility creates an enigma. If bitcoins could be valued much more in the future, people are less likely to spend and circulate them today, making them less viable.