Cryptocurrency combines two different words. Currency is a widely used word in the financial world but in the case of crypto, it refers to digital currencies. But what about the “Crypto” part of the word?
Cryptocurrencies are based on a fintech subfield which is called the blockchain. One of the main features of blockchain technology is cryptography and this is the origin of the “Cryptocurrency” term. The first Crypto was developed in 2008 by an unknown person (or group of people) known by the nickname Satoshi Nakamoto. “He” managed to develop the first successful digital currency called Bitcoin. As a digital currency, it has one of the most well-developed blockchain networks. It is worth to be mentioned that the structure of the code behind the development of a coin is a very strong indicator of its value (not necessarily the price) and its longevity as a digital currency. Despite the fact that Bitcoin is the first, widely recognized digital currency, the idea goes back to 1983 when David Chaum tried out to develop the first web money called e-cash.
After Bitcoin was created, a big transition to digital currencies started to occur. More and more coins have been created. Today, there are thousands of cryptos that everyone can access. Ethereum is considered crypto with a very promising technology that could potentially overtake Bitcoin (Ethereum 2.0 is in the making) The industry is continuously growing. As a result, the number of transactions is increasing every day. Mining is the process of transaction validation, which rewards miners with cryptocurrencies. This process enables them to possibly make a sufficient amount of money. Digital assets, tokens, and cryptos with small market capitalization are also called Altcoins (Alternative Coins).
Investing in Crypto
Cryptocurrencies are gaining space in the finance industry. Retail stores have started to accept it, as a payment method. It is considered a more secure payment method than credit and debit card payments because it doesn’t need third-party verification. Buying Cryptocurrencies is as easy as it gets. You just have to create an account in a crypto platform and start trading. But there are key differences from the traditional stock market. Cryptos are digital assets and your investment hasn’t any actual subsistence, as opposed to the stock market investments. Cryptos are also much more volatile than traditional stock markets. A crypto market could be evaluated as bullish, and hours later (sometimes even minutes) may turn bearish. Thus, you have to be really careful when investing in crypto. Many experienced traders use technical analysis to turn the extremely volatile prices to their advantage and make high amounts of profits.