After taking interest in the growing prices of bitcoin and associated opportunities, today many investors choose to buy bitcoin and other cryptocurrencies. However, predictably, in this nuanced focus area they are awaited by a common number of difficulties, not so familiar to those previously dealing with only fiat money.
In order to get past any needless difficulties, a new user wouldn’t hurt to get into the nature of cryptocurrencies and how they operate. As well as to, above all, understand how to make transactions with them. Investing into cryptocurrencies, you should also keep an eye out for details to help you build the highest possible potential in your investment package.
We’ll begin with the most general overview of the matter and then:
- study the way cryptocurrencies work;
- how to deal with them;
- ensure the safety of their storage;
- buy cryptocurrencies, if you haven’t got that covered yet;
- and what kind of financial specifications are important when doing cryptocurrency operations.
Cryptocurrencies are digital currencies protected with encryption, neither having any issuers nor control centers. The operation of cryptocurrencies is supported by an extensive network of nodes with equal rights, spread all across the globe and linked via internet connection. Cryptocurrencies and Bitcoin in particular were created as an alternative to regular (fiat) money. First of all, cheaper for any financial operations, second – widely accessible and unrestricted by governments and banks. The order of conduct is regulated by the initially developed software algorithms rather than any organization or group of individuals.
The era of cryptocurrencies has started in 2009 when a mysterious person (or group), going by the name of Satoshi Nakamoto has brought the first cryptocurrency into action. It was called Bitcoin. Further down the line the followers of Satoshi have created a number of other cryptocurrencies. Separately from Bitcoin, all of them are called altcoins. Some altcoins are close to Bitcoin by their internal structure. Others diverge from it by the source programming algorithm and special traits in their functionality.
Just over the last 8 years thousands of cryptocurrencies were created. However, only a few have earned their rightful place and the level of influence compared to that of bitcoin. And none have reached even one-quarter of bitcoin price.
The growth of interest towards cryptocurrencies can be be traced by the growth of bitcoin price
, the most successful altcoin prices and the growth of their capitalization. This growth is attributed to constant money flow that is far from being random.
Graph below shows the growth of bitcoin capitalization throughout its entire lifespan via a logarithmic graph. When capitalization of bitcoin was measured for the first time, it amounted to a meager sum of only $277 567. However, since then it has grown for 120 thousand times and risen above $33 billion.
This is our first piece in a series of educational posts on work with cryptocurrency for new users. Stay tuned for more articles and other useful updates by following us on Facebook
. See you in our next article and best of luck with your trading!
Additional materials that may help you:
What are the pros and cons of investing into cryptocurrency
Advantages of purchasing and selling bitcoin on a cryptocurrency exchange
How EXMO API works and how to use it
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