Bitcoin and Altcoins - the Basics of Cryptocurrency

Cryptocurrency is a form of digital money. In its most basic form it is nothing more than a complex set of entries in a database that keep track of the values of accounts held by the individuals invested in that particular currency. Those entries can not be altered without meeting certain conditions, which are set and managed by the coin's (cryptocurrency) operators and developers. Much like your standard bank account, the funds are kept up with by computers that track the money going into and out of an account. Difference being that there is a chain of computers keeping tabs on every transaction to ensure that all funds are accounted for. That process of verifying and calculating those transactions by the chain of computers forms a block chain, and is the basis of this phenomena that is known as Bitcoin and the other cryptocurrencies.

There are many differences between what is known as a "fiat" currency and from cryptocurrency. The first and foremost is the fluctuating value. A dollar is worth a dollar today, and a dollar tomorrow other than accounting for inflation. Fiat currency is usually not very volatile or subject to drastic change. Cryptocurrency's value, on the other hand, goes up and down wildly. Sometimes, it's as much as 50% in a single day.

From there, the other major difference is that there isn't any gold hidden in a vault anywhere to insure the value of these online currencies, nor other high value reserves to attempt to collect from. Instead, they are based on a complicated algorithm. Did you say there's no gold? Yes, I sure did. Sadly though, the good old US dollar hasn't been on the gold standard for many years now. It is nothing more than a fiat currency, a promissory note from a government or entity. If the US economy ever crashed, the value of the dollar versus other world currencies would plummet.

There are inherent risks when you discuss investing in cryptocurrency, but as far as I am concerned, those risks aren't much greater than with traditional currencies. The value of their money is only worth as much as the people behind them and the whole world financial system seems to be shaky. Thus, cryptocurrency becomes a more and more viable option as a method to buy goods, save, and invest money with each passing day.

This is the real steam driving the train. There are a literally millions of people on earth who no longer believe that the governments are behaving responsibly when it comes to national budgets and financial matters. They want to decentralize the source of money, especially online money. They also want to take the power away from the banks, make transactions more private, lower transaction fees, and decrease the time it takes to process a request to move money from one place to another.

The craze all started with Bitcoin. It's original use was for making anonymous purchases on the deep web in places like silk road, the well known black market site shut down by the US government. Ironically, Bitcoin's creator, Santoshi Nakamoto, is one of the great mysteries of the modern age. No one knows exactly who he is. What they do know is that whoever he is, he achieved an accomplishment many before him had failed to do. He had created a legitimate system of keeping track of an online currency.

This is the question of the hour. What started out as a means for less than cordial people to move money around in secret has now become something different entirely. You can buy cryptocurrency coins, sell them, trade them, loan them, borrow them, or even mine them. You can also invest in them, as Bitcoin and other Altcoins have now become one of the hottest investment platforms in the world.

There are a ton of different ways to take part. All you have to do is really want to bad enough to go through the pain in the neck process of signing up for a wallet and trading account. It takes some time and getting used to, but the people who have made themselves rich from this will tell you it's worth it.

Personally I do my trading at either Binance.com or Poloniex.com. Both are highly trusted sites that handle huge amounts of funds daily. There are others, but binance is the only one that has a referral program. They trade most of the reputable coins on the market, and the fees are pretty reasonable as compared to some of the other coin exchanges.

Okay, before I say another word, there has to be a disclaimer. Please do not throw your life savings into this blindly because I believe there is money to be made. This is in no way intended to be financial advice. Please do not confuse it as such. I offered information above, and will be offering my opinion below.

Now that that has been said, I can speak my peace. People are making obnoxious returns from investing in Bitcoin and other cryptocurrency. There are thousands upon thousands of new millionaires that have made their money off of buying into this system at the right time. New coins come out daily, and they trade for bitcoin and the other major coins at the exchanges.

Should you buy in? Only you can answer that question. However, I will leave you with a few thoughts. One of the rules of economics is that if trade is not restricted, it will snowball. This market is doing exactly that. Is it a bubble? Maybe. Will that bubble bust any time soon? Not very likely. The US government has stated publicly that they are considering creating their own, like many other governments are already working on. The possibility is there, however unlikely it is. You should consider the idea and plan accordingly should you choose to get it, but I would not not let it stop you for a single second.

There's a very real possibility that this trend will become the future of money. Considering the fact that it grows as it goes, the earlier you get in the better. Once upon a time, a Bitcoin was a dollar. Today, 1 coin sells for $15,000 cold, hard USD. The other coins range from a fraction of a penny up to Ethereum, which rang in at $850 the last time I looked at the ticker. For a bit of perspective, you could have purchased one of those Ethereum early this year for as little as $20. $100 bucks at that price would be worth over $4,200 just twelve months later. That's a 4200% percent return, folks. You'll never get that at the stock market.

Is this risky? Depends on who you ask. I say, yes, it is. But, it's a risk that is certainly worth taking.