The blockchain is an undeniably brilliant invention, made by person or group of people that go by name Satoshi Nakamoto. Since then it has evolved into something more significant. But, the essential question, what everyone has been asking is: what is a blockchain? By allowing information to be transferred and not copied, blockchain creates a new revolution on the internet. Initially, it has been used in digital trading currencies, but now IT experts are trying to find the new uses and potential for this technology.
Often you can hear that bitcoin is called digital gold and for a good reason. To date, the entire value of the currency is close to $9 billion. On the other hand, the blockchains can make other types of digital value. Like with the internet, you don’ need to know how it works, to be able to use it. However, having the basic knowledge of this technology can help you progress further.
The blockchain is a massive database, that is validated by a broad community, rather than one authority. It collects the records of all transactions and makes it public. Each block has a number of transactions recorded, and the chain feature connects them all. When the records are created, they are validated by a distributed network of computers and linked with the previous entry in the chain. In this way, they are making a chain of blocks or blockchain.
Considering that blockchain is controlled by a massive network of computers, it means that no one has the complete control over its history. This is an essential feature because no one can go back and alter the things. In this case, the blockchain is a public ladder that cannot be easily tampered with. Even though blockchain is often connected to digital currencies, many organization are trying to use it for other purposes. They are attempting to establish a voting system and implement its features into a health care system.
Although the blockchain technology has been efficiently used in the last decade, its origin goes back fat further. In 1976, a paper on New Directions in Cryptography argued about the idea of a mutual distributed ladder, which is what blockchain is now. But, it would take us a couple of decades and powerful computers to fully implement this technology and make these ideas useful.
To validate the blocks in the same way traditional transactions are approved, you need the help of blockchain employees, in this case, the assistance of powerful computers. Considering they need to have an excellent configuration, they are often expensive, consume a lot of electricity, and you need to keep them cool. This is one of the reasons why bitcoin acted as an excellent start to the introduction of blockchain technology. It will always reward the users who are taking part in this process, which is called mining. Every time people validate a transaction, they make money.
Cryptocurrencies are very popular nowadays, and many investors are interested in this type of investment. But there are a lot of risks connected to digital currencies and a lot of people aren’t brave enough to trade them. Now beginners are more interested than regular traders. This is one of the reasons why we what to present you this guide. The two most important things you need to review is the cryptocurrency wallet and cryptocurrency exchange. After all, the safety of your money is essential. In the last couple of years, the cryptocurrency market has considered substantial damage with numerous hacker attacks.
A cryptocurrency exchange is not yet a part of the regular stock exchange. But, we would suggest you use Coinbase and GDXA, the pro version of Coinbase with lower fees. You need to keep in mind that neither of these are the same as Wall Street and its exchange.
Beginners might prefer to trade cryptocurrency stocks on the stock market. The most notable bitcoin stock is GBTC. But, keep in mind that GBTC only trades at a premium, which means that bitcoins are cheaper, that buying shares here. This will not be an ideal solution for many people. Also, cryptocurrency trading market is open 24/7, even days in a week.
The easiest way is to trade your coins at Coinbase, but you can only sell, buy and store bitcoins, Ethereum, litecoin, bitcoin cash and coinbase. On the other hand, if you are serious about trading other coins, then you can check out GDAX, Bittrex, Binance, and Kraken.
In 2018, the cryptocurrency market will be volatile, which means you can make a fortune, but also, you can lose all. You should only choose the wallets and exchanges that reputable and reliable if you want to avoid frauds.
You don’t always have to buy coins, considering their price. There is also another way; you can invest in digital currencies via cryptocurrency mining. This is a legit way, and you only need a powerful computer, and you can start right away. For example, an average investor will want to trade USD for coins, and they want to avoid the complications and investments through mining. In this case, your job is to validate transactions and earn money.
First of all, you need to choose a reputable company that will provide you an exchange and wallet, just to keep things simple. Beginners should also trade prominent coins, such as Bitcoin and Ethereum. But, for this trade, you need to invest a lot of money. It’s always best to choose the exchange located in your country, for example, in the U.S. you can choose Coinbase. After you master Coinbase, you can switch to next one. Beginners shouldn’t perform margin trading, unless they know that it is and at least you accumulate some skills. Considering its stability, cryptocurrencies are extremely volatile and you need to careful.
When digital currencies appeared on the market, many people were skeptical towards this type of investment. A small number of them, who were brave enough to invest in bitcoin, now are rich people. In 2017, digital currencies reached their peak, and now many people are interested in investing their money in cryptocurrencies, but the process is more challenging than it was a couple of years ago. But, if you are a beginner and you want to explore crypto, then we have prepared a small guide for you. So, here is what you need to know about digital currencies.
To trade any type of cryptocurrency, you need a wallet to store them. In this case, bitcoins need to go in bitcoin’s wallet. Wallets behave like a crypto bank account. But, how can you get an e-wallet? The easiest way is to sign up for an exchange that allows you to buy, trade or sell digital currencies. In this case, you will have an opportunity to generate a wallet for every token that you traded. For instance, Coinbase will provide you wallet for bitcoin, Ethereum, litecoin, and bitcoin cash. You need to understand that crypto wallets don’t behave like physical one. They are just a secure window into the blockchain so that you can track your transactions. But, keep in mind what type of wallet you are choosing because it will protect your investments and money.
If you want to start trading cryptocurrencies, then you need to choose an appropriate exchange. But, considering there is a large number of them on the market, you will have a hard time deciding the right one. In the last couple of months, we have been the witnesses of many frauds and hacker attacks, so it’s still risky to invest in them, but this doesn’t stop people. There are a couple of steps which will help you choose the right exchange. First of all, select the exchange that is located in your country. Bitcoin is still the most common trading pair, and if you are to invest in other digital currencies, you will only be able to trade and buy it against bitcoin. Most exchanges aren’t regulated, so you are risking here. Compared to traditional stock exchanges, crypto exchanges are open 24/7, 365 days.
Coinbase – located in the U.S., Coinbase is one of the largest exchanges in the world. Investors can trade bitcoin, bitcoin cash, Ethereum, and litecoin and you can buy them directly with your credit card. But you need to have a $250 weekly limit.
Bittrex – another U.S. exchange and even more popular than others because it offers more than 1300 alternative cryptocurrencies. You cannot deposit directly, and you will need to buy bitcoin or Ethereum and transfer them into Bittrex before you can trade.
Binance – this exchange is located in Hong Kong, and it was only launched in 2017. However, their platform became very popular due to a large volume of trades.
Last year was terrific for the cryptocurrency, and many investors have managed to achieve massive profits. Everyone talked about bitcoin and how to invest in this currency, but it seems that at the beginning of 2018, the hype has died down. We still remember that significant crackdown of one of the biggest Japanese exchanges and somehow that made people think about the future and whether they should invest the money in cryptocurrency. Disappointing prices in January and February have apparently driven many bitcoin trades to avoid checking on their exchange accounts. The latest polls indicate sharp decline month over month.
The total number of visits to the websites of significant cryptocurrency exchanges had been reduced significantly in February. Based on many research, the visits have spiked in December 2017 and January 2018 and fallen by half in February. The total number of visits was down 49% in February, from 123.5 million to 63.1 million, after reaching 169.5 million in December 2017. Even though bitcoin had a rocky start, it doesn’t mean it’s all bad news for this digital currency. Many experts predict that bitcoin will recover by the end of the year.
Some analysts who are forecasting the prices say that we need to review the supply and demand factors and that we can expect the rise in price up to $20.000. They based this number on supply because the only limited number of coins are mined each year. On the other hand, without a firm regulation and guidance in cryptocurrency’s valuations, this price is prone to changes. Moreover, bitcoin investors expect positive developments in the market, claiming this is just a temporary crisis. There will be a lot of innovation in trading, starting with a bitcoin payment as legal paying method.
Like with any exchange, we can’t predict the crash on one currency or asset, but it’s possible. In case of bitcoin, many analysts are wary of the crash, and this is one major drawback for many investors. They are afraid to invest their money, and this trend will continue in 2018. No one can predict the crash of bitcoin, but there is always a possibility it will happen sometime in the future. While these predictions can be highly unreliable, there is some truth in them, and you will just have to follow price pattern signals.
The future of bitcoin and cryptocurrencies is anything but sure, but it’s reasonable to assume that at least for the short term, the price of bitcoin will continue to rise. On the other hand, the investors need to be very careful because in 2017 we have been witnesses to some of the nastiest feuds and many investors got ripped off due to hacker attacks. It’s still early to say, but this type of investment may become a safe haven for investors’ money.