Everyone has heard how Bitcoin and other cryptocurrencies have turned those who bought a year ago into millionaires. Gains of 1,000% or more are not only possible, but have been a commonplace with many of these cryptocurrencies. Someone who bought Bitcoin in May 2016 for less than $ 500 would have had a 1,400% gain in about 17 months. Then, over the last few days, we saw Bitcoin lose nearly $ 1,000, so to say that these cryptocurrencies are volatile would be a massive understatement.
Since the creation of Bitcoin in 2008, at Trend News we have been skeptical about the ability of cryptocurrencies to survive, as they pose a very clear threat to governments that want to see and record all transactions. But while we can still be cautious with real cryptocurrencies, we are well aware of the potential of the underlying technology that fuels these electronic currencies. In fact, we believe that this technology will be a major disruptor in the way data is managed and will affect all sectors of the global economy, in the same way that the Internet affected the media.
Here are some questions and answers to get you started …
Q: What are cryptocurrencies?
The best known cryptocurrency (CC) is BITCOIN. It was the first CC, started in 2008. Today there are more than 800 CCs, among them Ethereum, Litecoin, Dash, Zcash, Ripple, Monero, and they are all “virtual”. There are no coins or “physical” currency.
Q: How does CC work?
CCs are virtual currencies that exist in very large distributed databases. These databases use BLOCKCHAIN technology. Because each Blockchain database is widely distributed, it is believed to be immune to piracy, 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 future news posts.
Q: What is BLOCKCHAIN?
Blockchain is the technology that underpins all CCs. Each CC purchase, sale, or exchange transaction is entered into 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 executed quickly and easily by reducing or eliminating commissions. The technology is also being tested for applications in many other industries.
Q: Are CC exchanges regulated by the government?
For the most part, the answer is NO, which, for some users, is a big draw in this market. Right now it’s the “wild west,” but governments in most developed countries are examining this market to decide what regulation may be needed. A big decision is whether to treat CC as a currency or as a commodity / security. Canada and the United States have so far stated that CCs are legal, but the situation remains fluid in terms of reporting and tax implications. Crypto TREND will follow and report on these developments.
Q: How can I invest in this market?
You can buy, sell and exchange CC through the specialized “Exchange” services that act as an intermediary. Start by selecting an Exchange, setting up an account, and transferring trust currency to your account. You can then place your CC BUY and SELL orders. There are many exchanges around the world. Opening an account is fairly straightforward and all of these exchanges have their own rules about 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 bills, you will need to have a digital wallet. These wallets come in a variety of formats, including desktop, cloud-based, hardware (USB), mobile phone, and paper. Many of them are FREE, however, security is an important factor as no one wants to lose their wallet or have it 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 some financial transactions, such as money transfers and paying bills. The list of companies that accept 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 going on?
As we begin, we will keep each of the Crypto TREND items brief and the scope of each as restricted as possible. As we noted earlier, we believe that cryptocurrency technology will change the game and potential investment opportunities like this appear once or twice in a lifetime. Make no mistake, early investment in this sector will be only for your most speculative capital, money you can afford to lose.
Even if you don’t want to invest right now, knowing the first news of this new disruptive technology will put you in an advantageous position to benefit from our recommendations as we move forward.
Expect to see more Crypto TREND-specific news and recommendations as we begin this journey into what may at first seem like a foreign jungle. This is a volatile market and not all investors may like it, however, Crypto TREND will be your guide if and when you are ready.