The Basics of Cryptocurrency

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Cryptocurrency is a currency or to put it simply a method of transaction that utilizes the technology of blockchains and cryptography. By using blockchain and cryptography technologies, cryptocurrencies and their transaction are very secure. These cryptocurrencies have the advantage of being like gold and like a fiat currency.

Like gold, Bitcoin and other cryptocurrencies are finite by their very nature. Meaning that there are only so many that exist; this gives both gold and Bitcoin scarcity. As many collectors know, scarcity provides that something with value. That value will grow as more people desire it. Cryptocurrencies are valuable because the community around them believe them to be valuable, in a lot of ways cryptocurrencies are just another financial security that has price fluctuation, it’s just that Bitcoin has at several points been worth over $9,000 per unit of Bitcoin. At this current time of writing, Bitcoin is hovering over $10,000 per unit of Bitcoin! In fact, as of September 12, 2019, a $200 investment in Bitcoin in 2011 would be worth over $2,046,000.00 today! Yes, that is an astonishing 2 Million US Dollars!

Bitcoin is also like standard fiat currency (paper money) in the way that there is no intrinsic value. The value of these forms of currency comes from both the users and investors. The most significant advantage of using paper money is the ability to make exact change. Being able to divide the specific form of transaction and make a precise payment is the reason paper money exists, and now cryptocurrencies are following in tha tsame tradition. When you sell something, you don’t want to worry about how to make change. Most Bitcoin transactions use less than a tenth of a coin.

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The most significant advantage to Bitcoin and other cryptocurrencies like Ethereum is the decentralized nature of the technology. While governments and banks control traditional currencies, the community of crypto users manage the cryptocurrencies. Because of this, more individuals in countries that are experiencing the devastation of hyperinflation, and even deflation are now becoming even more reliant on cryptocurrencies as a means of stability for their financial survival.

One of the most significant disadvantages of cryptocurrencies is also its advantage, that being the security of the currency. After sending a coin to a wallet, there is no way to retrieve that money if the wallet is lost. There is a famous story about an early adopter that threw out a pc that still had their wallet on it. To this day there is a fortune sitting on a garbage pile completely & entirely by accident. While losing your cryptocurrencies forever may seem like a scary thought there are ways to prevent this, such as using a wallet-based app that stores itself off-device or via applying regular back ups to your wallet.

The future looks very bright for Bitcoin and other cryptocurrencies. The technologies behind these innovations are still in the early stages, but as they grow, they will become more and more valuable. There may come a day where cryptocurrencies are not just another currency but the preferred currency. In contrast to government produced and managed currency, cryptocurrencies are often lauded and championed as being the currency of the people. If you are considering an investment into the market of cryptocurrency, consider one of our Smart Wealth Investment preferred affiliates or advertisers. We only allow advertisers and partners on our site whose methods of practice and customer satisfaction ratings that we approve of. Our first priority is to that of our readers.

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