A cryptocurrency simply defined is a digital or virtual currency. It is secured by cryptography, and is close to impossible being counterfeited or double-spent. They are also decentralized, and therefore are not within the control of the government or any controlling bodies.
The word ‘cryptocurrency’ was derived from the techniques used in its encryption. Bitcoin, the ever first cryptocurrency was created in 2009 by presumably pseudonymous developer Satoshi Nakamoto.
Since then a few hundreds of other cryptocurrency projects have been launched, and lots more are being worked on.
Types Of Cryptocurrencies
There are currently over 2000 different types of cryptocurrenties, and many are being worked on daily.
However, the top 11 cryptocurrencies in the world as at the time of writing this post include:
- Bitcoin (BTC)
- Ethereum (ETH)
- Litecoin (LTC)
- Cardano (ADA)
- Polkadot (DOT)
- Bitcoin Cash (BCH)
- Stellar (XLM)
- Binance Coin (BNB)
- Tether (USDT)
- Monero (XMR)
The aggregate value of all the cryptocurrencies in existence currently is estimated to be around $1.5 trillion, with Bitcoin representing over than 60% of the total value.
How To Get Cryptocurrencies
There are two major ways of getting cryptocurrencies:-
You can earn crypto by mining them, or maybe getting them in exchange for a service.
There are also other ways of earning free cryptos by participating in airdrops, or staking your available cryptos (ie staking BNB to earn TLM).
You can also earn cryptocurrencies by purchasing them either from a broker (Binance, Luno, Roqqu etc) or an individual.
In some countries like Nigeria where cryptocurrencies are not so legal, per-to-peer (P2P) trading is almost the only ava
How To Make Money From Cryptocurrencies
There are two major ways of making money from cryptocurrencies:-
You can also make money from trading cryptocurrencies, like in Forex trading. By this you predict increases and decreases in the ccypto prices and place trades which could either result in gains or losses, depending on your decisions.
If you go into crypto trading without first studying and understanding how to make predictions, it is ‘gambling’ and you could loose all your investments.
A platform like Binance is being used by crypto traders, and you can get a lot of free and paid tutorials online to put you through.
‘HODL’ is a misspelling of ‘hold’, which simply refers to the buy-and-hold strategy among cryptocurrency investors.
Cryptos are always in up and down movements, and most times they increase with time.
Take for instance, Bitcoin was somewhat around $10,000 June 2020, and is currently pinned at $37,000.
If you had purchased one BTC a year ago and HODLed, by now it’ll be nearly times four of your initial investment.
Advantages of Cryptocurrency
Some of the advantages associated with cryptos include:
Extra source of income
You can make a living from cryptocurrencies either by trading, hodling, gathering airdrops, staking coins or doing a lot of other things.
Secure and safe from government policies
One of the major advantages of cryptocurrencies is being that they are free from government manipulation.
No one really controls what happens to it, thanks to decentralization.
Easy money transfer
You can send crypto to anybody, anywhere in the world and they get it in seconds.
Amazing right? Well, we could be saying goodbye to money transfer apps in the next few years.
Disadvantages of Cryptocurrency
If there are advantages however, there must be disadvantages.
Some of the disadvantages of cryptocurrencies include:
If you make a mistake, you could lose your cryptos in minutes, and there’s really not much that can be done to recover them.
Take for instance where you send money to a scammer, or they get access to your account, it could result in significant financial losses.
It is also close to anonymous, and could be used by criminals.
This has been a major issue, and criminals can use cryptocurrencies in the laundering of funds.
There’s really not much that can be done about it, and the government is trying so hard to work with regulators.
Cryptocurrency is here to stay, and has changed the lives of a lot of people financially in the past few years.
The earlier you queue in, the better and studying it properly to understand how they work is highly recommended.
What do you think?