The world of cryptocurrencies is an exciting topic but, in spite of that, it is still almost completely unknown to many, many people.
The term cryptocurrencies is increasingly being bandied about by those looking to multiply their savings or protect their value from inflation or future depreciations of traditional currencies.
Many people are now considering investing in cryptocurrencies, but is it really worth it?
There is a myth that almost anyone can generate large profits by investing in cryptocurrencies.
This is not entirely true. What we do know is that cryptocurrencies have moved from the background to the limelight in a very short period of time.
No one is surprised anymore to talk about digital or virtual money. More than 50 million people use bitcoin on a regular basis, which is a much larger number of people than the population of many countries in the world.
What are cryptocurrencies?
Surely you have seen thousands of photos where very striking golden coins appear with the stamped logos of well-known cryptocurrencies such as Bitcoin, Ethereum, Litecoin, among others.
For those who know nothing about this matter the images can be confusing and contradictory. I have to tell you that these are images that are mere representations, since cryptocurrencies are virtual currencies, they cannot be withdrawn or converted into a physical equivalent. All cryptocurrency transactions happen in the virtual world.
Cryptocurrencies are both digital currencies and payment systems that do not depend at all on the traditional payment networks we are all used to. Cryptocurrencies are decentralized and do not depend on any central bank or government. They have no country, no flag, no ideology.
Cryptocurrencies are based on blockchain technology. A vast network of computers and devices independently controls and keeps track of all transactions. This revolutionary technology is a powerful ally of cryptocurrencies that makes them reliable, impossible to counterfeit, manipulate or change arbitrarily.
Cryptocurrency transactions are the cheapest and the fastest. They play with a lot of advantage in this regard compared to traditional fiat currencies. Blockchain technology makes it possible to send money from one point in the world to another without intermediaries and in a cost-effective manner.
The supply of cryptocurrencies is limited. There is a maximum supply, which avoids complexities associated with fiat currencies such as the dreaded inflation.
Think about how the paper currency we use every day is created. It’s nice, valuable paper printed by central banks and governments when they need it. Bitcoin, the leading cryptocurrency, doesn’t work that way. You can’t push a button or pull a lever to generate more bitcoins. It is, so to speak, digital gold, a limited and scarce and therefore valuable commodity.
Is it safe to invest in cryptocurrencies?
No investment is 100% safe. Every investment carries risks that we must consider before investing.
Although the decentralization and lack of regulation of the market makes many users wonder whether investing in cryptocurrencies is safe, most arguments agree in supporting the safety of the cryptocurrency market, especially in the most well-known exchange platforms and the most widely used cryptocurrencies.
Is it profitable to invest in crypto?
Experts claim that investing in cryptocurrencies today can be an excellent complement to a diverse investment portfolio. However, it would not be right to invest all our funds in cryptocurrencies. In a sense, digital currencies remain a highly unpredictable and therefore risky market.
A frequent mistake is to look only at those successful examples of investors who have become millionaires through investment in cryptocurrencies. It is also advisable to look at those negative examples, which are actually closer to the truth and the ones that can teach us the most.
Earning profits through cryptocurrency investment is not a matter of a piece of cake, nor is it a matter of luck. It requires knowledge and investment instinct.
What are the main cryptocurrencies?
Everyone knows bitcoin, the cryptocurrency that started it all in 2009. It is the most valuable cryptocurrency and also the best known. Its fluctuations on the market influence the fluctuations of almost all other cryptocurrencies.
The second cryptocurrency in the order of popularity and recognition is Ethereum.
To buy Ethereum or buy bitcoin interested parties should go to Exchange platforms. It is advisable to go to the most recognized and reliable ones on the web.