It seems like every day you hear about its highs and lows of Bitcoin in the news. So what exactly is it? It is a type of cryptocurrency. Cryptocurrencies are digital currencies which use encryption to regulate currency and verify transfers.
People can use them instead of using national currencies (i.e. US dollars) to make purchases. A unit of any given cryptocurrency is often called a “coin” or a “token”. (Coin will be used throughout this article)
There are several popular cryptocurrencies in existence. Litecoin and Ethereum are popular choices that are rising in value. Yet, there are also plenty of other coins to consider. Let’s first look at some more information on why cryptocurrencies are the future of money.
Why Cryptocurrencies are Gaining Popularity
Cryptocurrencies make payments faster and more efficient. Consider historic changes in the commerce. Before credit cards, people had to carry cash around.
Credit cards made it easier to buy big-ticket items in stores. Then, the internet made shopping online from anywhere a reality. Now, cryptocurrencies are the next real advancement in the way people buy. So why do we need them?
Think about how many times you’ve seen “pending” in your bank account balance. Cryptocurrency payments are fast. You don’t have wait for money transfers to happen.
Have you ever had to pay high ATM fees or fees for sending money to someone else’s bank account?
Current solutions are not the answer. Take Venmo for example. It can take up to two days to transfer money, and there is a strict weekly limit of $2,999.
This is good for sending small amounts of money, but what about if you have to send more money?
International fees are another frustrating part of traditional payments. When you have to transfer between US Dollars to Euros, fees can be as high as 10%. With cryptocurrency, you don’t have to worry about those limitations. Transactions are cost-free and transfers are instantaneous for everyone who uses them.
The Value of Cryptocurrencies
Cryptocurrencies decentralize the power of money. This means that no singular person or organization controls their value. In the US, for instance, the Federal Reserve controls monetary policy. If the Federal Reserve wants to print more money, they can. Sometimes this helps stimulate the economy, but it can also backfire.
One current example is Venezuela. Many citizens in Venezuela use cryptocurrencies in place of the national currency.
This is because of the hyperinflation of Venezuela’s Bolívar. When the government printed too much money, the worth of the money diminished. Citizens in Venezuela now consider cryptocurrencies to be more stable in the short-term.
In contrast, the amount of a given cryptocurrency coins available is limited. Founders of a given cryptocurrency usually determine the number of circulating coins. The amount is usually determined before the Initial Coin Offering (ICO). The limit of available coins is usually constant.
Founders rarely increase the number of circulating coins. The main exception is to adjust for standard market inflation.
That means cryptocurrency values usually remain stable over time. The people who invest in cryptocurrencies control the value of a given currency. Typically, the more popular a coin is, the more it will be worth.
Compared to national currencies (i.e., US Dollar), cryptocurrencies are unstable in the short-term. However, they have the potential to be good long-term investments as worldwide adoption increases.
Where are cryptocurrencies accepted?
Plenty of stores are beginning to accept cryptocurrencies. Whole Foods, Expedia, and Overstock.com, are just some examples.
The expectation is that more companies will allow buyers to use them in the future. This gives customers more payment options to choose from when shopping.
What Cryptocurrency Should I Consider Buying in 2018?
Some cryptocurrencies will become popular. Others will become obsolete. This is inevitable in such a young market. Which cryptocurrency to buy, you may ask, now is the time to do diligent research and find the right coins to invest in.
As technology continues to develop, new coins are emerging. The coins with the best technology, resources, and business strategies will win out in the end.
Skycoin is one popular cryptocurrency that’s showing a lot of potential for 2018 and beyond. This lets the coin support the Skywire network.
Users (known as “Skyminers”) earn coins for providing connectivity and services. It uses transactions that take as little as 4 seconds.
It’s faster than other cryptocurrencies and requires no fees. Most importantly, its value is continuing to increase.
The total supply of coins is 100 million, and no one can create or destroy them. Many experts are suggesting that this is the top coin to invest in for 2018.
Now, compare investing in this to other cryptocurrencies. Some cost thousands of dollars to buy only one coin. Investing in a lesser-known, yet emerging coin has many upsides.
Even if you decide to invest a little bit of money, you can see good value on returns in the future this could you.
Always be smart when investing. Similar to investing in the stock market, you should keep the same principles of investing in mind.
Don’t invest any more money than you can afford to lose. Do research on which currencies are popular now. Look for coins you think have potential to succeed in the long-term.
Ready to invest?
There are many different exchange websites for purchasing cryptocurrencies. You should sure be aware of any fees for trading before buying. This process might seem overwhelming, but don’t worry.
There are many resources online that explain how to buy cryptocurrencies.