Cryptocurrency

Whether you love it, hate it or simply don't get it, cryptocurrency is here to stay

Cryptocurrency

Fans call it a disruptive liberation against the capitalist control on society, critics hate it and call it dangerous. Love or hate cryptocurrencies, they are growing in popularity. From the first and best-known types such as Bitcoin, hundreds of other types have also emerged over the past 5 years and many are gaining in value and usefulness each day.

What exactly is a Cryptocurrency?

Let’s start with the best known of all cryptocurrencies, the famous ‘Bitcoin’. Bitcoin is the best known all digital cryptocurrencies and is often featured on the news, often showing how investors turned a few quid into tens of thousands of pounds.

It’s a bit of a mystery where it originated from. It’s story was that it was invented by an anonymous person or group called Satoshi Nakamoto, in 2008. Since then, like the Stock Market, hundreds of other Cryptocurrencies have been created. 

Cryptocurrencies are not physical objects. Instead, they exist in the ‘virtual world’ as snippets of computer code. Sometimes you see cryptocurrencies like Bitcoin as a large gold coin emblazoned with a letter ‘B’ on them, but these are only for show.

Cryptocurrencies have no central point of control, unlike currencies such as pounds, dollars etc which are controlled and managed (often poorly) by the Government and controlled banks. They are known as “decentralised currencies”, which means they are not regulated by financial authorities. Cryptocurrencies are controlled by the people for people, and this often makes Governments upset as it’s hard to track and trace people’s wealth in digital forms.

Instead of banks, Cryptocurrency users visit ‘exchanges’ mostly websites like eToro to buy or sell their coins and transform them into their local currency (or a different one). Cryptocurrency is kept in digital wallets for safety, similar as you’d do with cash. These wallets can either be in a hard-form, like a USB stick, specially designed to hold Cryptocurrency or a virtual wallet.

Cryptocurrencies are created every day through a process called ‘Mining’. These involve super computers that work hard to solve complicated equations, and each correct answer produces a Cryptocurrency like Bitcoin. Miners get paid for their work as ‘auditors’ and are seen as guardians of the currency, usually in Crypto. They verify cryptocurrency transactions and this is to keep users honest.

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Blockchains

A Blockchain is a secure and anonymous way to move Cryptocurrency anywhere in the world.

By recording all transactions made within the cryptocurrency network, Blockchain technology removes the need for a middle-person like a bank or payment app. Moreover, the Blockchain prevents any transactions being removed, modified or tampered without permission. This creates a chain of transactions, known as blocks.

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Has anyone made any money buying Cryptocurrency?

YES! It's made lots of people in a very short amount of time

With all currencies in the 21st century, they are all digitised. Most societies are slowly getting rid of paper and coins for virtual cash. After all, when was they last time you picked up a brown wallet on a Friday which had pound notes stashed inside?

Cryptocurrency is the same but it’s completely digital. Like all digital currencies, they are bought into the idea that they are ‘real’, the same as Pounds and Dollars. In reality all money is fake, until you use it to purchase something tangible and real, then suddenly everyone is interested. 

A close friend of Quid Earner told us “My friends thought I was nuts buying Crypto instead of traditional stocks and bonds, but I have those also. Crypto is more exciting and sometimes more rewarding than my stocks, and until I show people this *(Editors note: He shows us his black coloured Breitling Navitimer watch)* does the penny drop and they realise Crypto is real”.

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There are websites where you can buy luxury items from directly that accept several different types of cryptocurrency. 
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Are there risks investing in Cryptocurrency

Yes, there are risks. The risks are similar to losing your wallet containing your cash or like the stock market it may fall and you lose some or even all of it’s value. Then again, it may rise. It depends on what your appetite is to risk, and how much you learn about Cryptocurrency, as well as stocks and shares. 

Graphs from starting price to August 2020

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Here we can see both graphs on Coinbases website, showing the start and early prices of Bitcoin and Ethereum.

Bitcoin: In October 2014 a single Bitcoin cost about £90 each. In December 2017 one Bitcoin was equal in value and costing £14,243 each! In Augurs 2020 a single Bitcoin is worth about £8924 each, still not a bad return if you invested early on.

We see a similar pattern with Ethereum.

Ethereum: From its beginning in 2015 until March 2017 it would have cost you between 50p and £15 for a single Ethereum. In January 2018 a single Ethereum was worth £1073 each! Currently they cost about £325 each in August. Still a healthy profit from your 50p, even from your £15 investment.

Now, we know what you're thinking... those ships have long sailed

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Yes, you are correct. They have sailed a long time ago. However, like with stocks, there are always new and exciting opportunities and boats of jump on. It all depends on your own attitude to risk, what you can afford to lose or gain.

You need to learn more about Cryptocurrencies, as because it’s only those who take the time, earn the most money. Look as them similar to trading in stocks and shares, or at least as a sideline to your other investments (don’t put all of your eggs into one basket). One of our colleagues buys cryptocurrency now instead of his £40 per week lottery habit. Some of his investments have increased, one has stayed pretty much the same value. Overall his investments in Crypto are looking promising and earning him more money and excitement than the lotto ever could.

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