You may have heard the word Bitcoin being thrown here and there, but have you ever wondered what it really is and why it’s been so popular for the past couple of years. It’s the very first cryptocurrency created and a successful one. Cryptocurrency is a medium of exchange with the use of cryptography, which uses different types of algorithms, to secure financial transactions. In other words, it’s a digital currency. Since it is protected by cryptography, cryptocurrency is near-to-impossible to counterfeit. Cryptocurrencies, such as bitcoin, use blockchain technology which makes the transaction very secure. Blockchain literally means a block of information/data in a chain. One transaction is stored on one block, and once a transaction is made, a hash number is assigned to it. The hash number would change as soon as a hacker tries hacking the data and a new block with a new hash number would be created with the same data. It would take hacker days and days to hack a whole blockchain.
How does cryptocurrency differ?
Cryptocurrency’s most peculiar feature is that it can’t be controlled by any authority, meaning the government has no authorization or control over cryptocurrency. This digital currency is much more private than your traditional money/coins and debit/credit cards. When a card is swiped in a machine, your personal information is stored, whereas transactions made through cryptocurrency do not use any sort of personal information. It is all anonymous. Another reason why cryptocurrency might be favored over banknotes is it’s a cheaper way to make transactions, as a bank would normally ask for fees, but digital currency rarely has a transaction fee. Cryptocurrency is the best option for the millions of people who don’t have access to the traditional banknotes as all a person would need is an active internet connection to access his/her account.
Some popular cryptocurrencies are:
There are hundreds and hundreds of cryptocurrencies available but only a few are used regularly. The oldest one is Bitcoin, which was launched in 2009. 11 years later, Bitcoin is still one of the most popular cryptocurrencies used. There are other competitors for bitcoin, such as “Litecoin”, “Namecoin”, “EOS”, “Ethereum”, “Ripple” and “Z-cash” to name a few. The biggest competitor to Bitcoin is Ethereum, which was released in 2015 by Vitalik Buterin. Vitalik was the co-founder of bitcoin magazine. Even though Ethereum is the biggest competitor to Bitcoin, 1 Ether is only a tenth of Bitcoin.
Where to buy cryptocurrency?
After all this, you’re probably wondering where to buy cryptocurrency. Bitcoin, being the most valuable and popular, would be your best option. Before buying bitcoin you’ll need a digital wallet, where you can store your bitcoin amount and such. There are two types of “keys” used for balancing your bitcoins; Public and Private. The public key is like the bank where you withdraw and deposit your bitcoins and is used as a “signature” for the user on the blockchain. The private key, on the other hand, is a type of password which allows transactions to be made. This does not appear on the blockchain and is known only to the user. The next thing you would need is your traditional debit/credit card to buy bitcoins at an “exchange”, which is an online marketplace. The most popular “exchange” is Coinbase.
Bitcoins are like stocks; they can go up and down. So, there is always a specific time to buy a bitcoin and always a specific time to not. According to CoinMarketCap, Weekends are the best time to buy bitcoin as there is less trading going on. There’s also the theory that people start thinking about investing in Bitcoin over the weekends so when they do invest in it, it’ll be on a Tuesday or so. Now that we’ve talked about the day, let’s talk about the time since Bitcoin value can go up and down in a matter of minutes. There’s no definitive answer here other than watching the value of Bitcoin. There are various apps that notify you of an increase or decrease of Bitcoin and from there you can identify when you should buy or sell your Bitcoin.
When to sell cryptocurrency?
Speaking of selling Bitcoins, the top two reasons people purchase Bitcoins are either to purchase assets using Bitcoins you invested in a small amount of money or sell Bitcoins when their value goes up for a good payday. Just like purchasing, there is a time and day to sell bitcoins. There is no specific time or day to sell bitcoins, but rather a specific moment. The theory here, just like gold prices, is that there is a direct correlation between supply and demand and the movement of the price of bitcoin. When bitcoins high in demand; sell it, as its value has gone up probably 5x than it was before. There are many factors that can determine the value of bitcoin like the amount of income in most countries. Switzerland has the most amount of income and so Bitcoin demand there is very high whereas, in Liberia, it’s very low due to low-income amounts. Another factor that affects it is the stability of the real currency. Obviously, if the economy is down, people would have a larger demand for other types of currency like Cryptocurrency which will drive the price of Bitcoin very high. The best thing to do would be to acquire Bitcoin when it is low in demand and high in supply and hold onto it until the value of Bitcoin goes up to some or all the factors said previously.
This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose.