Best cryptocurrency? types of cryptocurrency? One question you frequently get asked when you write a tech-business column is how to react to the bitcoin craze and, above all, how it works. As the value of this cryptocurrency has climbed by $ 2,000 recently, it is even more relevant to dwell on it.
Here is an introduction to this virtual currency in 5 questions.
1. What is it?
Like gold, bitcoin is not tied to the economy of any country and exists in limited quantities, which ensures its scarcity in the market. Types of cryptocurrency. However, it is much easier to store and cannot be counterfeited.
If a bitcoin is worth more than $ 8,000 today, it is possible to buy as little as a millionth of a bitcoin, making it an investment accessible to everyone.
They based the system that manages bitcoin transactions on a technology called blockchain. This guarantees both the security of bitcoin, considered almost impossible to hack, and the total transparency of transactions.
It is, therefore, possible to trace each bitcoin transaction since its creation. Best cryptocurrency This trace stops at your encryption key, a unique number associated with each user. It is extremely difficult for a third party to find out who owns each encryption key. Your transactions are therefore secure, and your identity remains confidential.
2. What is it for?
According to Jonathan Hamel, founder of the Bitcoin Academy, there are few advantages to trading in bitcoin daily in a stable economy like ours. Although some businesses accept it, buying your coffee in bitcoin poses no benefit unless the dollar crashes that morning and you lose your purchasing power with it.
Like gold, bitcoin is therefore foremost a popular investment vehicle. This is because of its marked increase in 2017 and the multiple stories of millionaires linked to it (we ignore the stories of those who have lost a lot of money in recent months!).
Since bitcoin is not tied to any economy and its value responds only to supply and demand, it is an attractive alternative to the stock markets, especially during times of recession.
3. Should we invest?
Difficult to comment on this. While the greed is tantalizing after the sharp increases in 2017, bitcoin has lost almost 60% of its value since the start of the year. We are, therefore, types of cryptocurrency talking about a speculative investment reserved for investors with a high tolerance for risk.
However, nothing prevents you from buying a few tens of dollars of bitcoin in order to tame this new currency.
4. What are the risks?
The major risk of bitcoin is its unpredictability. While bitcoin itself is safe, the wallets where it is stored are subject to hacking. You must, therefore, always keep a copy of your encryption key in a safe place to avoid being denied access to your assets.
In such a case, it would also leave you to yourselves to find your assets. There is no customer service like in a bank where you can easily ask to retrieve your password! This technical risk, although easy to prevent, must therefore also be considered.
5. Where to buy bitcoins?
It is very easy to buy bitcoins. First, you need to open an online wallet.
The most recommended by experts in the field is Electrum, considered among the safest. Best cryptocurrency Then you find an ATM and convert your dollars into bitcoin.
There are several online ATMs for this purpose, but companies like Einstein also offer physical ATMs in several convenience stores.
It is, therefore, a type of cryptocurrency easier than ever to take the first step in this economic revolution!
SOME ADVICE FROM JONATHAN HAMEL
- The best investment is to take the time to understand bitcoin and learn more about the history of the currency.
- Start by making a small transaction, to learn how bitcoin works, how it is stored and how to access your funds.
- Never invest more than what you could lose. Bitcoin is unlikely to fall back to zero, but it remains a young asset with high volatility.
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