Everyone has heard that Bitcoin and other cryptocurrencies have made millionaires from those who bought them a year ago. Profits of 1,000% or more are not only possible, but common with many of these cryptocurrencies. Someone who bought Bitcoin for less than $500 in May 2016 would have made a 1,400% profit in 17 months. Then, in the last few days, we saw Bitcoin lose almost $1,000, so to say that these cryptocurrencies are volatile would be a huge understatement.
Since Bitcoin’s inception in 2008, we at Trend News have been skeptical of cryptocurrencies’ ability to survive, as they present a very clear threat to governments that want to monitor and tax every transaction. But while we may still be wary of true cryptocurrencies, we are very aware of the potential of the underlying technology that powers these cryptocurrencies. In fact, we believe that this technology will be a major disruption in the way data is managed, and will affect all sectors of the world economy, just as the Internet affected the media.
Here are some questions and answers to get you started…
Q: What are Crypto Currencies?
The most popular cryptocurrency (CC) is BITCOIN. It was the first CC, started in 2008. There are currently over 800 CCs, including Ethereum, Litecoin, Dash, Zcash, Ripple, Monero, all of which are “virtual”. There are no “physical” coins or currencies.
Q: How does CC work?
CCs are virtual currencies that reside in large, widely distributed databases. These databases use BLOCKCHAIN technology. Because each blockchain database is widely distributed, it is believed to be immune to hacking as there is no central point of attack and every transaction is visible to everyone on the network. Each CC has a group of administrators, often called “miners”, who validate transactions. A CC called Ethereum uses “smart contracts” to validate transactions. Crypto TREND will provide more details in upcoming news releases.
Q: What is BLOCKCHAIN?
Blockchain is the underlying technology for all CCs. Each transaction to buy, sell or exchange CCs is included in a 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 made quickly and easily, reducing or eliminating fees. The technology is also being explored for applications in many other industries.
Q: Are CC exchanges regulated by the government?
Most of the time, the answer is NO, which, for some users, is the big appeal of this market. It is now the ‘wild west’, but the governments of most developed countries are studying this market to decide what regulation is needed. A big decision is whether to treat CCs as a currency or a commodity / security. Canada and the US have so far declared CCs to be legal, but the reporting and tax implications remain fluid. Crypto TREND will monitor and report on these developments.
Q: How do I invest in this market?
You can buy, sell and exchange CCs using the services of specialized “Exchanges” that act as intermediaries. To get started, you select an Exchange, set up an account, and transfer 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 these exchanges have their own rules regarding 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 cryptocurrencies and pay your bills, you will need a digital wallet. These wallets come in various formats such as desktop, cloud based, hardware (USB), mobile and paper. Many of them are FREE, however, security is a big factor as no one wants to lose or have their wallet 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 a number of financial transactions, such as money transfers and bill payments. The list of companies supporting cryptocurrency is growing rapidly, and includes big players like Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynga, Subway, and WordPress.
Q: What’s next?
To begin with, we will keep each Crypto TREND article short and keep the scope of each one as narrow as possible. As we stated earlier, we believe that cryptocurrency technology will be a game-changer and potential investment opportunities like this only come once or twice in a lifetime. Make no mistake, early investing in this sector is only for your most speculative capital, money you stand to lose.
Even if you don’t want to invest right now, understanding this new disruptive technology early will put you in an advantageous position to benefit from our recommendations as we move forward.
Expect to see more detailed Crypto TREND news and recommendations as we begin this journey into what at first appears to be a foreign jungle. This is a volatile market and may not appeal to all investors, however Crypto TREND will be your guide if and when you are ready.