Everyone has heard how Bitcoin and other crypto currencies have become millionaires among buyers just a year ago. Gains of 1,000% or more are not only possible, they are commonplace in most crypto currencies. Someone who bought Bitcoin in May 2016 for less than $ 500, would have had a profit of 1,400% in about 17 months. Then over the past few days, we saw Bitcoin lose almost $ 1,000, so to say these crypto currencies could quickly be a huge understatement.
Since Bitcoin’s inception in 2008, we at Trend News have questioned the ability of crypto currencies to survive, as it presents a very clear threat to governments wanting to see a tax on all transactions. But while we may still be wary of actual crypto currencies, we are aware of the potential of the underlying technology that drives these electronic currencies. In fact, we believe that this technology could be a significant disruption to how data is managed, and that it could affect every sector of the global economy, such as how the internet impacts media.
Here are some questions and answers to get us started …
Q: What are Crypto Currencies?
The most popular crypto currency (CC) is BITCOIN. This is the first CC, started in 2008. Today there are more than 800 CC’s, including Ethereum, Litecoin, Dash, Zcash, Ripple, Monero, and they are all “virtual”. There are no “physical” coins or money.
Q: How does CC work?
CC is for virtual currencies that are in very large distributed databases. These databases use BLOCKCHAIN technology. Because each Blockchain database is widely distributed, it is considered immune to hacking, as there is no central point of attack and every transaction is visible to everyone on the network. Each CC has a group of managers, often referred to as “miners”, who certify transactions. A CC called Ethereum uses “smart contracts” to validate transactions. Crypto TREND will provide more details in future news publications.
Q: What is BLOCKCHAIN?
Blockchain is the technology that supports all CC. Every transaction for buying, selling, or exchanging CC’s is entered with a BLOCK to be added to the chain. This technology is complex and will not be explained here, but it has the potential to transform the financial services industry, as transactions can be made faster and faster, reducing or eliminating fees. The technology is also being explored for applications in many other industries.
Q: Are CC Exchanges regulated by the government?
For the most part, the answer is NO, which, for some users, is a big attraction in this market. It’s the “wild west” right now, but governments in most developed countries are scrutinizing this market to decide what regulation is needed. A big decision is to treat CC as a currency or a product / security. Canada and the USA have currently declared CC legal, however the situation remains fluid as to reporting and tax implications. Crypto TREND will follow and report on these developments.
Q: How do I invest in this market?
You can buy, sell, and exchange CCs using special “Exchange” services that act as a brokerage. You start by selecting an Exchange, setting up an account, and transferring fiat currency to your account. You can place your BUY and SELL orders on CC. There are many exchanges around the world. Opening an account is simple and these exchanges all have their own rules regarding initial funding and withdrawal.
Crypto TREND recommend CC Exchanges in the future.
Q: Where do I put my CC?
To have the freedom to move your crypto currencies, and to pay bills, you need to have a digital wallet. These wallets come in many formats, such as desktop, cloud based, hardware (USB), mobile phone, and paper. Many of them are FREE, however, security is a big factor because no one wants to lose their wallet or have it stolen. Crypto TREND will recommend digital wallets in the future.
Q: What do I have to do with my CC?
As well as investing in CC products, you can also use crypto currency for certain financial transactions, such as transferring money and paying fees. The list of companies that accept crypto currency has grown rapidly, and includes big hitters such as Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynga, Subway, and WordPress.
Q: What’s next?
When we start, we will keep each of the Crypto TREND articles as short and keep the coverage of each as narrow as possible. As we noted earlier, we believe crypto currency technology can be a game changer and potential investment opportunities like this come once or twice in a lifetime. Make no mistake, investing early in this sector is only for your most speculative capital, money you can lose.
Even if you don’t want to invest right now, gaining an early understanding of this disruptive new technology will put you in a lucrative position to profit from our recommendations as we move forward.
Expect to see more news and specific recommendations from Crypto TREND as we begin this journey into what seems like an alien forest in the beginning. It’s a fast -paced market and may not appeal to all investors, however, Crypto TREND can be your guide if and when you’re ready.