About Crypto Money
Cryptocurrency has been all of the rage as of recently, but not many people understand what it is.
Read below for an in depth review of crypto money.
CMM - Cryptocurrencies
Today cryptocurrencies have become a global phenomenon known to most people. While still somehow geeky and not understood by most people, banks and governments and many companies are very aware of its importance.
Below we have explained some of the important differences between the types of primary cryptocurrencies being used and traded.
What is Bitcoin?( )
Bitcoin has been quite the rage recently as many people have been hearing word on how much its value has risen recently. From just $600 a few years ago, this currency was valued as high as $18,000 just a few months ago. But what exactly is this ‘Bitcoin’?
Bitcoin is what is known as a ‘cryptocurrency’. Cryptocurrency is a term for digital currency. Digital currency is a type of currency that is only available in digital form. This means that it is not like a paper dollar or metal coin; nor is it like a banknote. Also, it is no created or regulated by a central bank like the Federal Reserve in the United States.
Instead, digital currency is a form of money that is strictly electronic; almost like your Visa or Mastercard credit or debit card. Like money, however, it can be used to buy goods and services, and this is primarily what it is used for. But the difference between Bitcoin and your Visa or Mastercard is that Bitcoin is not centralized whereas Visa and Mastercard are.
Bitcoin is the first strictly electronic digital monetary system in the cryptocurrency industry, but it is certainly not the only one. There is Litecoin, IOTA, Ethereum, and NEO to name a few. These types of currencies are strictly electronic and essentially ‘paperless’.
Without getting into too much detail, the creators of Bitcoin made it so that there is only a certain amount of Bitcoin. And, naturally, when there is a certain amount of something and many people want it, it’s value goes up. This is exactly the case with Bitcoin now.
You may ask yourself, why would someone value a cryptocurrency over a regular currency? Can’t the developers just make more or less? But so can the central banks with regular money. Furthermore, Bitcoin allows people to buy things online and amongst one another without any regulation and any border barriers between them; unlike regular currency which usually has to be converted. It is for this reason that this globally utilized electronic currency has increased in so much value most recently.
When it comes to buying Bitcoin, all a person has to do is (1) download the app ‘Coinbase’, (2) create a Coinbase account, (3) add a payment account, (4) and use the app to purchase the amount of Bitcoin you would like. Most likely you will also have to pass some anti-fraud verification during the process. From there, you could spend your bitcoin where it is accepted online or order a debit card linked to the account to spend in physical locations. The choice is yours.
What Is Ethereum?( )
Cryptocurrency has been all of the rage as of recently and there are many people who are trying to understand, not only what cryptocurrencies such as Bitcoin are, but how they work and how they can be trusted by people for use.
Bitcoin is a virtual currency and blockchains are what is used in the process of tracking and maintaining the integrity of the digital currency system by recording transaction. Ethereum is essentially the same, but with its own currency, value, and security system for reliability.
Ethereum provides its own currency known as Ether. It is one of the many types of cryptocurrencies on the market today such as Bitcoin, Litecoin, and IOTA just to name a few.
Essentially, this type of cryptocurrency is merely its own version of Bitcoin, but with its own records, systems, validity, and reliability. As an analogy, Ether is to Bitcoin as the U.S. Dollar is to the Euro; they are simply different types of currency. The U.S. Dollar is regulated by the Federal Reserve while the Euro is regulated by the European Banking Authority. Ethereum and Bitcoin are essentially two different currencies maintained by their own providers.
Like with the Dollar and the Euro, it is up to the consumer to choose which one they want and which one they have more faith in. The Dollar may crash one day, and so can the Euro. Or, the value of the Dollar may skyrocket, and so can the Euro. It is up to the person or investor which currency they want to place their holdings in and the same is true with cryptocurrency.
What Is Litecoin?( )
Cryptocurrency has been all of the rage as of recently and there are many who believe that this may be the future of trading and investment. But what exactly is cryptocurrency and how does Litecoin fit into this?
Cryptocurrency is a digital currency that is created by an entity and given a specific values among users. There is a finite amount of the units of these currencies and based on the demand for this currency, its value are determined.
Bitcoin is one of the most popular cryptocurrencies, almost like Pepsi or Coca Cola are the leading brands of soda. But just like there are other lesser known brands of soda, there are actually many other lesser known brands of cryptocurrency. Litecoin is one of those lesser known cryptocurrencies, but not to be underestimated by any means.
Just because a brand is not leading, does not make it unsuccessful. In fact, there are many different types of brands of the same product whether it comes to hotels, gas stations, beverages, restaurants, and many other industries as well. So just because Litecoin may be second or lesser known and valued compared to Bitcoin does not mean that it is not to be taken seriously.
Bitcoin was $600 at one point a few years ago and recently its value skyrocketed to as high as $18,000. Litecoin has steadily fluctuated between $225 and $275 recently; but there is certainly potential for the value of the currency to substantially increase.
The value of a currency depends on how legitimate people think it is and how much they demand it. So when the security of the Bitcoin system and use in transactions has been reliably maintained, its value increased substantially as people can use it as a standard between all currencies internationally. The same is possible for Litecoin in the near future.
It will depend on the security of Litecoin and cryptocurrencies in general as to whether its value will increase or decrease in the time to come. If the security and reliability is maintained, its value will likely increase over time. But if the integrity of the system is undermined either through security or regulation, it will most likely not.
Some investors are capitalizing on the relatively lower value of Litecoin just incase it does increase in the future. It will be interesting to see how its value changes in the time to come.
What Is Ripple?( )
Cryptocurrencies are a hot topic in today’s investor community and for several reasons. The steadily increasing value of all cryptocurrencies, such as Bitcoin, Litecoin, and Ripple, have been an investors dream come true.
When it comes to Ripple, there are two general schools of thought on whether or not it is suitable for investment and these are the same as for cryptocurrencies in general.
Advantages of cryptocurrencies include their independence from government influence and regulation which some believe makes them more stable than national currencies. Furthermore,their ability to be used in a variety of online contexts makes them much more flexible and useful in that type of context. These are among the leading advantages of cryptocurrencies.
Disadvantages of cryptocurrencies include their susceptibility to hacking and extreme government regulation. If a security breach takes place and messes up the accounting records associated with the currency determining who has how much, the system will be compromised and its value will plummet. Furthermore, as many people begin to value this currency more, the value of national currencies will drop. Therefore, it is possible that governments may one day come together and ban the use of these types of currencies which would also essentially crash their value. These are all risks associated with cryptocurrencies, Ripple being one of them.
When it comes to main brands and secondary brands, not only the main brands are successful. Surely Pepsi and Coca-Cola are successful, but there is still a significant market for secondary brand beverages which makes them also suitable for success. The same is true for Ripple. Although Bitcoin may be the leading currency, there is substantial opportunity for secondary currencies such as Ripple and Litecoin.
Unlike Bitcoin reaching as high as $18,000 a unit and Litecoin fluctuating between $200 and $300 a unit, Ripple is at a more manageable rate of about $1.58 a unit today. Therefore, whereas Bitcoin and Litecoin are in the hundreds or thousands, Ripple is in the dollars making it a much more individualized unit of currency.It takes a significant amount of critical thinking and analysis to determine whether or not investment in the Ripple cryptocurrency is suitable.
What Is Blockchain?
Cryptocurrency has been all of the rage recently and many people are asking themselves: how can people trust an electronic currency as opposed to a paper currency like the U.S. Dollar? The answer is because of the blockchains.
Security is a major part of any financial institution. Whether it is with banks, credit cards, and other financial assets, the role of security, reliability, and validity is essential to the process. Part of the reason cryptocurrencies such as Bitcoin have been so successful recently is because of the validity that is created through what is known as the Blockchain.
When some people sign up for a physical or online account with any financial group, there is usually a process that asks for verification information to prevent fraud. This helps increase the security of the process and drives up the value of the financial system.
With Bitcoin and other cryptocurrencies, they also implement a process called “Blockchain Analysis” where each and every transaction with the currency is maintained, reviewed, and assessed for reliability and validity. This is to protect the integrity of the currency.
A great example would be having a regular Visa or MasterCard credit or debit card with only $1,000. It would really damage the integrity of the system if Visa or MasterCard was not able to record the transaction and a person went and bought $900 worth of goods from Store #1 and another $900 worth of goods from Store #2 without the Visa or MasterCard system recording the balance or preventing it from happening. If this were to happen, people would not like Visa or Mastercard and might not accept it in their stores anymore.
The same is true with Bitcoin and other cryptocurrencies. People would not want to use the currency if it had a low integrity and people were spending the same Bitcoin in more than one place.
Therefore, through the blockchain which records each specific transaction with specific information and a time stamp, the Bitcoin system can maintain its integrity and therefore become more reliable in the eyes of the consumer. As a result, the blockchain serves as a major part of the security and dependability of the currency.