Crypto or cryptocurrency is a digital currency gaining popularity in investment portfolios due to its numerous benefits, including low transaction fees, fast transaction speeds, high security, etc.
If you are a newbie, you may ask: what is crypto? Should you put money into cryptocurrency? Hence, in this article, Coin568 will walk you through what you need to know about this form of investment.
What Is Crypto?
Cryptocurrency is a digital asset designed to serve as an online exchange intermediary. Unlike fiat currencies such as dollars or euros, crypto features cryptographic algorithms to secure transaction information, control the creation of new units, and verify asset transfers via Blockchain technology.
You can completely pay with cryptocurrency when making an online purchase. It is a peer-to-peer transaction that does not require the engagement of a third party such as a bank. Thanks to cryptocurrency, you can make payments for anything anywhere and anytime on the internet.
In addition, you don’t need to register an email address or create a password on a website to use cryptocurrency. Instead, You can download crypto-enabled apps to your smartphone and start trading within a few minutes.
Since these fascinating currencies are built based on Blockchain technology, it is difficult for attackers to manipulate. Furthermore, all transactions are completely private, which ensures safety for traders. Cryptocurrency, in particular, is not regulated by the government or any other entity.
Regarding why crypto is a potential investment form, take Bitcoin, the world’s first cryptocurrency, for example. Established in 2009, this coin set records after records in 2021, reaching a high of $65,000. Their value demonstrates the potential and promising development. For more information, see the crypto price today (https://coin568.com/gia-tien-ao/).
Now that you have a basic understanding of crypto let’s look into the history, characteristics, and uses of this virtual currency with Coin568.
Origin of Cryptocurrency
- Before having Bitcoin:
Cryptography was invented in the 1980s by American cryptographer David Chaum, who created digital money that relies on cryptography to secure and verify transactions.
Also, at the end of this decade, he founded Digicash company. However, the company did not last long. Some popular cryptocurrencies that hit the market, such as Flooz, Beenz also suffer the same fate. This failure stems from fraud, security, finance, or internal conflicts.
It was not until the early 1990s that cryptographic software and protocols to create a truly decentralized digital currency began to develop. Nevertheless, no real cryptocurrencies appeared until the establishment of Bitcoin.
- Bitcoin appearance – 2009
Bitcoin was created in 2009 by a person (or group of people) using the pseudonym Satoshi Nakamoto. It was created and became a widely accepted global payment method. Bitcoin is a decentralized money transfer system that works without any intermediaries. After launching only a short time, it received enthusiastic support from people who believe in Blockchain technology. People began exchanging coins and forming mining groups to mine this coin.
By the end of 2010, dozens of similar altcoins, such as Litecoin and XRP, had emerged. Around this time, the first public Bitcoin exchanges appeared to meet people’s exchange needs.
Up to now, a growing number of businesses across a range of industries, from big tech to airlines, are accepting cryptocurrencies as official payment methods for their goods and services. Microsoft, Amazon, Tesla, and other companies have all accepted this payment method.
Characteristic Of Crypto
What makes cryptocurrencies become a valuable asset? Let’s dive into their outstanding features below:
- Digital form:You cannot hold them physically like paper money. You can only access it via a computer or mobile device with an internet connection.
- Decentralization: Crypto using Blockchain technology-a public ledger that records all network transactions. The ledger is updated regularly and validated by a global network of millions of computers.
It enables parties to conduct direct transfer-receipt transactions without the involvement of a third party while maintaining security, accuracy, and confidentiality.
- Peer-to-peer network: Buyers and sellers transact directly online without any third party. As a result, cryptocurrency transactions are processed quickly, cost-effectively, and transparently and securely.
- Trustless Transactions: Every crypto transaction is automatically verified by thousands of computers on the Blockchain network. Hence, you don’t have to doubt your partner when making cryptocurrency transactions.
- Anonymous: Crypto transactions are carried out and completed without personal information.
- Secure and safe: All crypto is encrypted before distributing to users. This method ensures that your transactions are private, reducing the risk of hacking and data theft.
- Cross-border transactions:You can trade cryptocurrency anytime, from any location.
Uses Of Crypto
Crypto is increasingly popular and widely used. Let’s learn why they are worth considering:
- Purchase goods and services: You can buy various products such as clothing and computer equipment from e-commerce sites or stores that accept Bitcoin. You can also buy airline tickets or reserve a hotel room with your coins in a country that accepts them.
- Send money overseas:Crypto lets you make international remittances at extremely low cost and fast speed.
- Profitable investment tool: You can profitably trade coins, hold coins, or trade futures contracts by taking advantage of the high volatility of cryptocurrencies. Additionally, you can earn interest by saving and staking with higher interest rates than bank deposits.
- Used as asset storage: Blockchain is a secure way to store valuables. It is extremely difficult to hack and extremely safe.
- Raise funds for a startup: Technology startups frequently raise funds through initial coin offerings (ICOs) to fund their projects built on blockchain technology.
You can use your coins to invest in these projects as a shareholder. ICO is a way to get a piece of a new cryptocurrency and increase rapid capital growth.
- Private transactions:Crypto allows users to conduct transactions without revealing the amount of money being transferred, the source of the money, or the transfer’s purpose to the bank.
You can completely enter the world of crypto if you understand the fundamentals of this digital currency.
Virtual currency is now causing fever in the stock market. However, this market also carries many potential risks and will not be suitable for uninformed and inexperienced participants.
Therefore, to avoid becoming prey to the market, you need to constantly study, learn and improve your investment knowledge, skills, and experience. Hopefully, through the article, traders can have a thorough answer on “what is crypto?” and make better decisions in crypto coins investment.
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