There are legal ways of becoming a millionaire overnight. One of them is through the cryptocurrency industry. This statement isn’t based on ear-says but rather on true-life events we have seen. Since its inception in 2009, the cryptocurrency industry has seen an upsurge in adoption and increased valuation. Some people have made life-changing investments in the cryptocurrency industry. while some are still finding it hard to have a clear grasp of what the industry entails. Here you have it; a quick read, in less than 5 minutes, summarizing what the industry is about.
Cryptocurrency is a digital entity. It doubles as currency and also a commodity. You can use it to buy and sell and you can equally buy and sell it. An analogy will be in a video game system. Online games where you have to use real money to buy coins to keep the game going. Imagine that such coins are on a non-game app called “wallet” in which you can pay with it, or receive it as payment. And if you keep for a while, you can sell off to someone at a higher value than the cost price. This is cryptocurrency.
It is an online form of “money” different from normal money by its decentralized system. It’s not controlled by a central bank. You are your banker and transactions are carried out from peer to peer. Directly from you to the other party, and vice versa. This happens in seconds with super fast speed.
THE BLOCKCHAIN ECOSYSTEM
While the most famous cryptocurrencies are bitcoin and ethereum. There are thousands of cryptocurrencies online, each with its peculiarities. Transactions on cryptocurrency are recorded through a system called the blockchain. This can be regarded as the ledger that records your transaction from your wallet and it is built in a way that’s very hard for hackers to tamper with. The blockchain system record every transaction in a “block”. Each block carries a “hash” (an encrypted code of some sort) of the previous transaction. This record is distributed over millions of computers around the world(decentralized). This is what makes it extremely difficult to tamper with the blockchain ecosystem. A change in a record will affect every previous one and would require changes to be effected on millions of computers worldwide.
GETTING STARTED AS A BEGINNER IN THE CRYPTOCURRENCY INDUSTRY
You would initially need to make enough research and decide on the cryptocurrencies you would like to deal with. Inquiring from people dealing with it already will be a huge plus here. Then you move to create a “wallet” an online app that could be used to hold your possessions. Then proceed to buying your tokens from trusted sources or mining your coins with the hardware.
It’s worthy to note that cryptocurrencies are in units of “tokens” and “coins” just like we have naira and dollar units for Nigerian and US currencies. You own tokens by purchasing from crypto trading sites. And coins by mining using hardware called Application Specific Integrated-Circuit “ASIC”. The more you spend on the hardware, the better its efficiency to mine coins for you.
VALUATION AND DE-VALUATION OF CRYPTOCURRENCY
Crypto trading is considered legal and illegal depending on each country. While some people get involved in cryptocurrencies to use as currency for trading. They either buy or sell from sites or vendors that accept payments with it. The larger base considers it an investment. They get involved to buy, save and sell off when the value increases.
How does the value increase? Here:
Most cryptocurrencies have a finite amount of tokens. The lesser the tokens available, the higher the value, and vice versa. So lots of people buy and save it up, once it’s less in circulation, it commands higher value and as such, they can sell it off. Yet, it’s a risky investment because of its volatility; it could happen the other way round as well and get its values highly dropped.
Though, cryptocurrencies are super fast, safe to an extent, and not dependent on censorship. one needs to be extra careful when dealing with them because of their volatility. This is because there are lots of scam schemes out for it as well. The most common ways of scamming are;
· People create fake cryptocurrency and shut it down after making lots of people invest in it.
· Some People get fake identities and encourage people to invest in particular crypto and withdraw their investments at the peak. This causes the value to drop and those that invested lose out.
These are more are why it’s necessary to make enough research and not jump into crypto trading without prior knowledge. There is a common saying by risk analysts to crypto investors. They say; invest what you can afford to lose
It is no doubt crypto trading has been very profitable for people. It should be noted that it’s not a get-rich-quick scheme as others make it seem, it requires a lot of patience for your asset to grow in worth over time. Perseverance through the value fluctuations and adequate knowledge to know when to and how to trade properly.