Introduction to cryptocurrency

The phenomen we enjoy

Posted by Petr Pěčka on March 28, 2018

With some exceptions, the market is still not able to accept crypto-currencies as a commonly used currency. There is quite a negative media image about crypto-currencies. You might have heard that these are only available to IT experts or that they are not actually real money and that they are used to buy drugs etc. On the top of this, you may have heard that they are dangerous and that they should be banned from use.

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A crypto-currency is a type of digital cash which is decentralised and anonymous. There is no government, institution or person who manages it or that can manipulate its use with rules and regulations. You have full control over what you own.

When we are online shopping in China, watching American TV channels etc we are using different types of currencies. Bitcoin is the first global crypto-currency and as a result it does not have any link to local economies.

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The two main parts of a crypto-currency consist of investment and trading. There is the successful investment part which most people enjoy. You can earn money via mining, although you will need to utilise some calculating power from your system. The second part is trading and people combine both of these elements. With mining you have a stable solution, prices that can be estimated so that you can calculate what you will earn. With trading, you accept the volatility of the crypto-currency and you can enjoy it and earn.

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What are the benefits of a crypto-currency?
They are very volatile, new, quick, cheaper and more reliable than money issued by a government. They can be used without any leverage and you can always use them to bet on something. One of the main reasons why this is attractive for traders who have just started to trade is the potential of large growth within days. If you know the market you can earn a lot.

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What are the negatives of a crypto-currency?
Since crypto-currencies are relatively new, they are difficult to understand, and people are not aware of how to use them. You can lose the contents of your wallet, therefore you need to remember your wallet password and to ensure that you do not to lose the device that the wallet is stored on. In case you mistakenly pay someone using a crypto-currency, there is no way to reverse your payment. The only option is to ask the person for a refund. A crypto-currency is not regulated like most normal currencies so you should take extra care when using them.

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Where to start?
Start with a small amount, usually around the equivalent of 100 USD, use public Exchanges (the most common ones are BitFinex, HitBTC, Kraken etc). There are technical differences, different sets of instruments but they all pretty much behave in the same manner. It is a good idea to read blogs, watch tutorials, listen to podcasts, read newspapers etc to understand what the market is about, as well as stayingup to date.

If you do not have fun with a crypto-currency you cannot profit from them. For more information, please watch the video below featuring Boris....