Saturday, December 23, 2017

What is Cryptocurrency and Should You Investing Your Money there?

What is Cryptocurrency and Should You Investing Your Money there?  - Cryptocurrency is a digital currency created and managed through the use of advanced encryption techniques known as cryptography. Cryptocurrency evolved from just an academic concept to a reality with the creation of Bitcoin in 2009. While Bitcoin attracted growth in the following years, Bitcoin gained significant investors and also media attention in April 2013 when it peaked at a record $ 266 per bitcoin after soaring 10 fold in the previous two months. 

Bitcoin uses market value of up to $ 2 billion at its peak, but then plunges 50% shortly afterwards after a fierce debate about the future of cryptocurrencies in general and in particular Bitcoin. So will this alternative currency eventually replace the conventional currency and become like dollars and euros someday? Or are these cryptocurrencies just a trend that will fade someday? The answer is back to Bitcoin, And it turns out that at this time the price of Bitcoin has now reached $ 14000 that Cryptocurrency currency is not to be underestimated.

What is Cryptocurrency and Should You Investing Your Money there?
Bitcoin - Current Standard

Bitcoin is a decentralized currency that uses peer-to-peer technology, which enables all functions such as currency issuance, which transaction processing and verification must be done collectively by the network. While this decentralization makes Bitcoin free from manipulation or government interference, the reverse side is that there is no central authority to ensure that everything runs smoothly or to support the value of Bitcoin itself. Bitcoins are created digitally through a "mining" process that requires powerful computers to solve complex algorithms and crisis figures. They are currently made at level 25 Bitcoins every 10 minutes and will be closed at a rate of 21 million, the level expected to be reached by 2140.

Read this to : What is Bitcoin and How to Get Bitcoin Fast

This characteristic makes Bitcoin fundamentally different from paper currency, which is supported by full trust and its government credit. Issuance of fiat currency is a highly centralized activity overseen by a country's central bank. While banks regulate the amount of currency issued in accordance with the objectives of monetary policy, theoretically there is no upper limit for the amount of currency issuance. In addition, local currency deposits are generally insured against bank failures by government agencies. Bitcoin, on the other hand, does not have such a support mechanism. The value of Bitcoin is entirely dependent on the willingness of the investor to be willing to pay at a given point in time. In addition, if a Bitcoin exchange is folded, a client with a Bitcoin balance can not get their bitcoin back.

Cryptocurrency Alternative to Bitcoin

Despite many issues, Bitcoin's success and visibility has grown since its launch and has embraced a number of companies to launch alternative cryptocurrencies, such as:

-Litecoin - Litecoin is considered a leading competitor of Bitcoin that already exists, Litecoin is designed to process smaller transactions more quickly. This litecoin set up in October 2011 is considered a silver coin for Bitcoin gold, "according to its founder Charles Lee. Unlike the heavily horse-powered computers required for Bitcoin mining, Litecoins can be generated by regular desktop computers. The maximum limit of Litecoin is 84 million - four times the limit of Bitcoin which is only 21 million - and has a transaction processing time of about 2.5 minutes, about only a quarter of the time that Bitcoin needs.

-Ripple - Ripple was launched by OpenCoin, a company founded by technology entrepreneur Chris Larsen in 2012. Like Bitcoin, Ripple is a currency and payment system. The currency component is XRP, which has a mathematical basis like Bitcoin. The payment mechanism enables the transfer of funds in any currency to other users on the Ripple network in a few seconds, unlike the Bitcoin transaction, which can take up to 10 minutes to confirm.

About the Future Cryptocurrency

Some limitations that cryptocurrencies may encounter - such as the fact that a person's digital fortune can be erased by the destruction of a computer device, or a virtual vault that can be looted by hackers - can be overcome in the future through technological advances. What may be difficult to overcome is the basic paradox of cryptocurrencies - as it becomes more popular, government regulation and oversight will become increasingly stringent, which could ultimately undermine the fundamental premise for the existence of cryptocurrencies.

While the number of stores receiving cryptocurrencies is increasing, cryptocurrencies are increasing. In order for cryptocurrencies to be more widely used, they must first gain widespread acceptance among consumers. However, their relative complexity compared to conventional currency is likely to deter most people from possessing it, except for technologically advanced ones.

Cryptocurrency that aspires to be part of the main financial system may have to meet very diverse criteria. This will require complex mathematical strategies (to avoid fraud and hacker attacks) but also easy for consumers to understand, decentralized but with adequate consumer protection and protection, and maintain user anonymity without engaging in tax evasion, money laundering and other malicious activities. Since this is a formidable criterion that must be fulfilled, is it possible if the most popular cryptocurrency in a few years time can bridge the gap between flat currencies and current cryptocurrencies? While the possibilities are very close, the success of Bitcoin (or its inability) in facing the challenges it faces can determine the fate of other cryptocurrencies in the coming years.

Should You Invest in Cryptocurrencies?

If you are considering investing in cryptocurrencies, it may be better to treat your "investment" in the same way as you would treat any other highly speculative venture. In other words, realize that you risk losing most of your investment, or it could be all. As stated earlier, cryptocurrency has no intrinsic value other than what the buyer is willing to pay for it at a given point in time. This makes it particularly vulnerable to inflated prices, which in turn increases the risk of losses for investors. If you can not face the risk of such volatility, find another place for an investment that is more suitable for you. While there are different opinions about the benefits of Bitcoin as an investment - proponents refer to limited supply and growing use as an important driver, while critics see it as just a speculative bubble - this debate can make a conservative investor to avoid investment in this field.

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Conclusion about Cryptocurrency

The rise of Bitcoin has sparked debates about the future and for other cryptocurrencies. Despite Bitcoin's latest issue, its successful launch since 2009 has inspired the creation of alternative cryptocurrencies such as Litecoin, Ripple and many others. Cryptocurrency which aspires to be part of the main financial system must meet very different criteria. While the possibilities look difficult, there is little doubt that the success of Bitcoin or its failure in facing the challenges it faces can determine the fate of other cryptocurrencies in the coming years.