What Is Cryptocurrency?

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Cryptocurrency is digital currency. They are NOT physical entities. They are independent of the banking systems. Like The New York Stock Exchange, NASDAQ, The London Stock Exchange, and others  – marketplaces that give companies, governments, and other groups a platform to sell securities to the investing public – cryptocurrency have their own Exchanges as well.

They are held and stored electronically. You can store them on a website or in a wallet until you cash it out to Fiat Currency. (See my “Guide To Crypto Currency Wallets”)

No bank or government controls cryptocurrency, it is self-regulating, and it is because it is independent of government and banks, gains can be made. It is an incredible concept.

Cryptocurrency is produced on-demand. In other words, people show interest in a particular cryptocurrency, they start buying, and more of that cryptocurrency is produced to meet the demand.

You may have heard of Bitcoin. Bitcoin was the very first cryptocurrency created. It was created in 2009. Today, it is king of the mountain and the number one cryptocurrency on the market. (What determines the rank of a cryptocurrency is its market cap). Bitcoin can be used to invest in or to purchase Altcoins (the lesser coins). As of today, one Bitcoin is worth nearly $4300.

All other cryptocurrencies created after Bitcoin are called Altcoins. (A contraction of alternative coins). Most Altcoins cost far less than Bitcoin and Ethereum. I believe that more gains can be made by purchasing good low-cost Altcoins and holding them of the long-term,

Let me give you an example. Let’s say on August 1, 2016, you purchase $100 worth of an Alcoin that was priced at $0.00693426 (a fraction of a cent). Your portfolio will show that you own 14,408 units of that Altcoin. Now, let’s further say that you hold on to that Altcoin for a year. You do not panic within that year when you see the dips. A year later, on August 1, 2017, your Altcoin has increased in value to $5. Your $100 investment would now be $72,040. (14,408 units x $5 = $72,040). Suppose that Altcoin increases in value to $10, $20, $100 or more!

Look at the chart below. If you had purchased $1000 worth of Bitcoin Plus (XBC) in September 2016 it would have cost you $0.07 yielding you 14,285 units of XBC.  A year later – September 2017 – the value of XBC increased to about $80. You would be a millionaire. (14,285 x $70 = 1,000,000)

However, cryptocurrencies are volatile. You play with uncertainty. Cryptocurrencies can have unexpected highs as well as unexpected lows. But I tell you, the highs can be exceptional.

The above example is very realistic. It is oftentimes a matter of being informed, conducting good research on potential high-gain Altcoins, and being patient and holding on to them. If you play the long game with some of these cryptocurrencies, you can make an incredible amount of money.

The second largest cryptocurrency is Ethereum. (It is second in market capitalization) Ethereum is an Altcoin. Why? As stated above, all cryptocurrencies created after Bitcoin are Altcoins.

So, in this article, you learned that cryptocurrency is “digital currency.” You also learned that it is independent of government and banking systems. You learned that cryptocurrency has its own Exchange marketplaces where you can buy, sell and trade cryptocurrency. You learned that cryptocurrency investing is highly volatile. You learned that your cryptocurrency is held and stored in a wallet. You learned that this “new frontier” of currency is t

I believe that cryptocurrency will transform the world and the way in which we conduct financial transactions. It is only a matter of time when this spark it will ignite in a very large way catch fire all over the world.

RJ

A retired Information Technology Specialist and Foreign Service Officer with a large U.S. Government Federal Agency, Technical Instructor, Blogger, WordPress Instructor, Web Designer, Internet Marketer and Cryptocurrency Investor and Mentor.


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