In the past, people used the barter system to buy things from other things. The thing which they have in excess, they exchange it with 2nd things that they need from the other people who have 2nd thing in excess and 1st thing he needs.
Then it upgraded to metal coins for buying and trading. It’s not very easy to carry gold coins with them, so it was upgraded to a paper receipt signed by the king or government of that place known as currency. Now, the government has all access to your money, if someone loses their money in bank frauds and scams like Neerav Modi and Vijay Malya. Government has no answer to the obvious question of the people.
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So, here the role of cryptocurrencies came into the market. Cryptocurrencies are based on blockchain technology that is not dependent on any central authority like bank and government, where you can transfer your digital asset to anyone without paying any extra charge. There is no owner of any cryptocurrency, the owner and user of cryptocurrency are the people who owned it.
Why do we need digital currency?
If any influential person and you go to a bank, then that other person will get his work soon. But the digital currency isn’t biased and gives everyone their equal right, where we earlier needed trust to do that transaction to move to an engine that is equal to all.
Some of the positives of digital currencies are that they allow users to do the seamless transfer of value and can make the transaction much cheaper. To avoid the centralization of money towards any particular organization, we need digital currency.
What is Blockchain?
It is known as blockchain technology because information of transactions is recorded in a block and linked together in a chain. It is the technology based on storing and sharing data across all the computer networks. We can make cryptocurrency, but we can also make loan applications. You can authorize another entity through a distributed network, so basically it becomes a way of creating accountability through a decentralized system that is not owned by anyone.
The best part of it is you are anonymous in the world of crypto no one knows you from your crypto address, it is simply floating in the universe, every system aware of it but none no one knows whom it belongs to.
What is Bitcoin?
Bitcoin is the first cryptocurrency launched by Satoshi Nakamoto in 2008, he described it as an electronic payment system. There is always one question in your mind why bitcoin price is so high, the answer is bitcoin is limited. Only 21 million bitcoins in this world are present. There is more currency like Ethereum, tether, DogeCoin, Cardano, Polka dot, etc.
All those currencies use cryptography to verify and secure networks as well as manage and control the creation of those currency units. When the value of bitcoin goes up to eight decimal zero, mining of the bitcoin is used to increase circulation.
How to invest?
Cryptocurrency can be exchanged from peer-to-peer networks and crypto exchanges, though they cost some charge for that about 0.2%-0.5%, it is easiest to invest in crypto. Now take a look at how to invest in crypto:
First, you need an application to invest in crypto like coin switch kuber, Zerodha, coin base, bitfinex, etc. then you need to complete a KYC in that app by validating government proof. After 30 minutes your KYC is ready and now you’re able to invest in crypto. In that, you are allowed to buy or sell bitcoin any time after 5 minutes or 5 years. Through which company you are buying crypto, that company will buy crypto on behalf of you.
Are they Secure?
If the government of any country imposes rules on cryptocurrencies then it should affect the companies and it will also affect your profits. By the way, if there isn’t any rule from the government you should not need to worry about it. So, once you start, then there are certain practices and certain laws that different countries have adopted to address those issues and create a global economy within their ecosystem.
Should you invest in crypto?
People look at money as only earning more, as a parameter of success, rather than having two parallel tracks of earning and investing, so that’s why the ecosystem of investment becomes very important. Without investing we should never be able to generate passive income, which means while sleeping you can also earn money. As you grow in your responsibilities your risk profile changes, like you can take more risk in your 20s as compared to after 30s because of not having responsibilities of family and food.
So, for investing like people invested in gold and stock market, now they got something new to invest in called crypto. All digital assets come in crypto like NFTs, Cryptocurrencies, etc.
If you have money, if that money will be lost and it doesn’t shake you, then you should invest in crypto. You can also divide your salary into four parts 30% for monthly expenses, 30% for investing in profitable assets, 30% for savings, and the remaining 10% you can invest in cryptocurrencies.
Also, all cryptocurrencies are highly fluctuating, don’t wait to come down it to buy or go up to sell, it can go up or down 2000$ in one night.
Where to store?
You can store it with exchanges and if you don’t want to pay the extra fee to exchanges, you can also store them in hardware wallets that are password protected and if you forget the password you’ll never be able to get those cryptocurrencies back.
The dark side of crypto
It is highly Volatile/Fluctuating: It can glow up one’s life and at the same time, it can also ruin the other life.
Can be shaken with one tweet: Like one tweet of Elon musk without any word(contains a hashtag, two emoji) is able to drop down the value of the currency, and then Elon Musk buys bitcoin worth 1.5 Billion$.
Not accepted everywhere: Most of the business giants and government aren’t accepting it as a medium of buying and selling things.
The better places for criminals: We can say that but data is saying other things that 0.54% of the crime rate is from bitcoin and 5% of the crime rate is from cash.
If you’re going to invest in crypto you should be disciplined about it, don’t see the value of it because it may make you happy and sad in a day, so be consistent. If you are a newbie to crypto don’t make it your full-time work, after learning some concepts and taking advice from experienced people in it, you will start from 2%-5% of your monthly income.