Everyone has heard how Bitcoin and other cryptocurrencies have made millionaires from those who bought as recently as a year ago. Earnings of 1,000% or more are not only possible, but have been commonplace with many of these cryptocurrencies. Someone who bought Bitcoin in May 2016 at less than $ 500, would have made a 1,400% profit in about 17 months. Then, in the last few days, we saw that Bitcoin lost almost $ 1,000, so to say that these crypto currencies are volatile would be a huge understatement.
Since the inception of Bitcoin in 2008, we at Trend News have been skeptical about the survivability of cryptocurrencies, as they present a very clear threat to governments who want to see and tax all transactions. But while we can still be wary of real cryptocurrencies, we are well aware of the potential of the underlying technology that powers these electronic currencies. In fact, we believe that this technology will be a significant disruptor in the way data is managed and that it will affect all sectors of the global economy, just as the Internet impacted the media.
Here are some questions and answers to get you started …
Q: What are cryptocurrencies?
The best known crypto currency (CC) is BITCOIN. It was the first CC, started 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 coins.
Q: How does CC work?
CCs are virtual currencies that exist in very large distributed databases. These databases use BLOCKCHAIN technology. Because each Blockchain database is widely distributed, it is believed to be immune from hacking, as there is no central point of attack and each transaction is visible to everyone on the network. Each CC has a group of administrators, often called “miners”, who validate the transactions. A CC called Ethereum uses “smart contracts” to validate transactions. Crypto TREND will provide more details in upcoming news posts.
Q: What is BLOCKCHAIN?
Blockchain is the technology that underpins all CCs. Each CC buy, sell or trade transaction is entered into a BLOCK that is added to the chain. This technology is complex and will not be discussed 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 examined for applications in many other industries.
Q: Are CC exchanges regulated by the government?
For the most part, the answer is NO, which, for some users, is a huge draw in this market. It is the “wild west” at the moment, but the governments of most developed countries are examining this market to decide what regulation may be necessary. A big decision is whether to treat CC as a currency or a commodity / value. 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 follow and report on these developments.
Q: How do I invest in this market?
You can buy, sell and trade CCs using the services of specialized “Exchanges” that act as brokerage. Start by selecting an exchange, setting up an account, and transferring fiat currency to your account. You can then place your BUY and SELL CC orders. There are many exchanges around the world. Opening an account is quite simple and all of these exchanges have their own rules about initial funding and withdrawals.
Crypto TREND will recommend CC Exchanges in the future.
Q: Where do I keep my CC?
To have the freedom to move your crypto currencies and pay bills, you will need to have a digital wallet. These wallets come in various formats such as desktop, cloud-based, hardware (USB), mobile phone, and paper. Many of them are FREE, however security is an important factor as no one 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 crypto currency for some financial transactions, such as money transfers and bill payment. The list of companies accepting cryptocurrencies is growing rapidly and includes blockbusters like Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynga, Subway, and WordPress.
Q: What’s next?
As we begin, we will keep each of the Crypto TREND articles brief and keep the scope of each as limited as possible. As we noted above, we believe that crypto currency technology will be a game changer and potential investment opportunities like this present themselves 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 right now, gaining an early understanding of this disruptive new technology will put you in an advantageous position to benefit from our recommendations as we move forward.
Expect to see more news and recommendations specific to Crypto TREND as we begin this journey into what may seem like a foreign jungle at first. This is a volatile market and may not appeal to all investors, however Crypto TREND will be your guide when it is ready.