A cryptocurrency is a virtual or digital currency specifically developed to function as a platform of exchange. It uses cryptography to secure and authenticate payments as well as to control the development of new units of a certain cryptocurrency. Cryptocurrencies are restricted entries in a database that no one can change unless certain conditions are fulfilled.
What Can Be Done With Cryptocurrency?
In the last few years, trying to find a merchant that accepts cryptocurrency was incredibly tough, if not impossible. Currently, however, the situation has changed entirely.
There are several merchants – both offline and online – that are willing to now accept Bitcoin as the form of payment. Such merchants range from huge online retailers like Newegg and Overstock to bars, small local shops, and restaurants. Bitcoins can be used for payment for computer parts, apps, jewelry, flights, and hotels.
However, various other digital currencies like Ethereum, Ripple, Litecoin, and so on aren’t as widely accepted just yet. Though, things are changing for the better, with Apple having verified at least 10 different cryptocurrencies as a viable form of payment on the App Store.
Most of the people tend to believe that cryptocurrencies are the greatest investment opportunity currently available. Indeed, there are ample stories of people becoming millionaires with the help of their Bitcoin investments. Bitcoin is the most popular digital currency to date, and just a few years back one BTC was valued at $800. In November 2017, the price of one Bitcoin shot up to $7,000.
Ethereum, arguably the second most popular cryptocurrency, has recorded the fastest rise a digital currency ever experienced. Since May 2016, its value boosted by at least 2,700 percent. When it comes to all cryptocurrencies combined, their market cap soared by more than 10,000 percent since mid-2013.
But, it is worth noticing that cryptocurrencies are high-risk investments. Their market value swings like no other assets. Furthermore, it is partly unregulated, there is always a risk of them getting outlawed in some specific jurisdictions and any cryptocurrency exchange can potentially get hacked.
If you opt to invest in cryptocurrencies, Bitcoin is still the profitable one. But, in 2017 its share in the crypto-market had quite dramatically fallen from 90 percent to just 40 percent. There are several options available right now, with some coins being privacy-focused, others being less open and decentralized than Bitcoin and some just outright copying it.
Mining is the most crucial part of every cryptocurrency network, and much similar to trading, mining is also an investment. Miners are offering a bookkeeping service for their respective communities. They contribute their computing power to solving complicated cryptographic puzzles, which is vital to verify a transaction and record it in a distributed public ledger called the Blockchain.
One of the intriguing things about mining is that the complexity of the puzzles is consistently going-up, correlating with the number of people trying to solve it. So, the more famous a specific cryptocurrency becomes, the more people try to mine it, the more complicated the process becomes.
Thousands of people have made fortunes by mining Bitcoins. Back in the days, you could make massive profits from mining using just your computer, or even a powerful enough laptop. These days, Bitcoin mining can only become profitable if you’re willing to invest in industrial-grade mining hardware. This, of course, incurs huge electricity bills on top of the price of all the necessary equipment.
Accepting Cryptocurrencies (For Business Purposes)
If you own a business and you’re looking for potential new customers, accepting cryptocurrencies as a form of payment might just be the perfect solution for you. The interest in cryptocurrencies has never been higher and it’s only going to go up. Along with the increasing interest, it also boosts the number of crypto-ATMs situated around the world. Coin ATM Radar currently lists almost 1,800 ATMs in 58 countries.
All you need to do is let your buyers/customers know that your business accepts crypto coins. This can be done by simply putting a sign by your cash register. The payments can then be accepted using touch screen apps, hardware terminals, or simple wallet addresses through QR codes. Multiple services could be used to accept payments in cryptocurrencies. For example, CoinPayments currently accepts over 75 different digital currencies, charging just 0.5 percent commission per transaction. Other popular services include Cryptonator, CoinGate, and BitPay, with the latter only accepting Bitcoin payments.
To learn about the future prospects of cryptocurrency, click here!