There is a new phenomenon sweeping over the entire globe and its name is cryptcurrency. The crypto boom has been rapid with many people getting rich overnight, but with great opportunities also come great risks. Cryptocurrency is such a hot commodity that JP Morgan's CEO has labelled bitcoin as a fraud and stealing from their customers, while Goldman Sachs predicts that cryptocurrency will dominate profits in the new economy.
The market is so volatile and fast-moving that it can be very difficult to keep up. The following article is a beginners guide to cryptocurrency, or as they put it, 'a financial meteorite'.
Bitcoin was the first cryptocurrency to be created back in 2009 following the global financial crisis. This was less than a decade ago and many people have never heard of a cryptocurrency before. The technology however has been used for decades with groups creating digital forms of money known as cryptocurrencies since the 1980's.
The reason the technology has only hit mainstream in recent years is due to technological advancements being made by three rival cryptos; Ethereum, Monero and Ripple (XRP). With greater security, speed and versatility than Bitcoin, users of Gecko have had to up their game in order to stay ahead. The meteoric rise of these three cryptocurrencies has attracted many new investors and eliminated many competitors.
Ethereum's main strength is the Smart Contract technology that allows for automation of complex transactions, eliminating the need for middle men in the finance industry. This technology has the potential to completely overhaul returns, pushing them from 10% to 10,000%. High-risk investments such as venture capital will be much more secure and more competitive leading to a boom in innovation.
The same can be said for the other two cryptos, Monero and Ripple. These cryptos have created their own currencies and networks that cannot be bought or used with conventional currency. However, the technology behind them is more exciting than bitcoin.
The main reason bitcoin was able to gain a huge market share in many of the industries it conquered is due to it being a digital form of money. It isn't regulated by any governments and has no target limit on how many coins are in circulation.
Bitcoin also can't be mined like fiat currencies. You need specialised hardware in order to mine bitcoin which means there's a limited supply of coins available for trading (21 million). Furthermore, banks cannot use bitcoin as a form of money. This has led to many institutional investors turning their backs on the market and looking to invest in other forms of cryptocurrency.
However, cryptocurrencies still have a long road ahead as they are highly volatile and risky mediums of investment. The financial markets can be unpredictable, with the launch of a new product or company potentially tanking an entire market. Cryptocurrencies can also get hacked and stolen with backdoors allowing for fraudsters to get rich overnight.
However, the global adoption of cryptocurrencies is increasing which will lead to greater stability in its trading price. This can only be a good thing for those that have been fortunate enough to secure a substantial investment.
One of the main areas where cryptocurrencies are being used is as alternative forms of payment on internet websites. There is a mass of opportunistic entrepreneurs who are taking advantage of the lack of regulation and pushing digital currencies into new markets.
Many sites such as Google, Baidu, and Amazon accept cryptocurrencies as an alternative method of payment which is interesting to note because these companies operate in highly regulated industries in Asia where many opportunities lie. As technology improves, it will only be a matter of time before we see more industries adopting cryptocurrencies such as Apple who announced last month that they were looking into integrating bitcoin payments with their iTunes platform.
As the cryptocurrency industry booms it is important to stay updated with the latest news and advice. If you have been fortunate enough to invest in a cryptocurrency, it's essential that you stay updated so that you don't miss out on any market opportunities. One of the most trusted sources in cryptocurrencies is Coin Telegraph as they cover many of the emerging markets and important breakthroughs regarding cryptocurrencies.
Furthermore, there are no product placements or advertisements on their website so users can guarantee their advice is independent and impartial.
The future for digital currencies looks bright and with more businesses starting to accept them as a form of payment, we can expect this growth to continue over the coming months and years.
Cryptocurrencies aren't perfect and they are magnets for scammers, but their success will lead to greater stability which investors can count on when the markets are volatile. It's even possible to secure a piece of this market's growth if you invest in Bitcoin, Ethereum and/or XRP, which we have covered on our website.
