One of the most popular questions, when people talk about Bitcoins, is “Should I invest in Bitcoin?”, well, 2017 started with a bang as Bitcoin being shot through the $1000 mark, since then, it hasn’t shown any sign of slowing down.
Since 2017, the cryptocurrency market has been growing at an exponential pace and making rich a good number of users, for example, those who invested $10,000 in early 2016, by now they would have a total investment of $60,000.
Well, if you have heard or read about Bitcoin, and still does not have a good idea of what Bitcoin is. Well, Bitcoin is known as a cryptocurrency, a form of digital money, that takes advantage of encryption to secure transactions and control the creation of new units. Dogecoin is said to be the people’s choice of coin. Be it this or any other coin, everyone is risky. No one has got control over them. It depends on the market. Sometimes it may get you huge profits, or sometimes it may result in a huge loss. But planning and investing can save you from the loss.
What gather the interest of many users, was the idea of making a form of currency which couldn’t be controlled by governments or businesses, letting people a currency who could be used to trade globally with no cost and keeping your identity without being revealed.
Many of you should be asking “If no one has control of Bitcoins, how do they work?” well, Bitcoin’s creator, stated that this would be currency which, thanks to the use of cryptographic proof instead of trust, it would “allow any two willing parties to transact directly with each other without the need for a trusted third party”.
All its transactions are stored in a cryptographically secured bank, known as the “blockchain”, which keeps a record of payments and transactions.
The blockchain is powered by its users, who offer their computing power to keep it running, and as a reward, they get newly created Bitcoins, through an activity known as mining, which is one of the different ways to acquire bitcoins.
Mining is a process that involves complex maths problems, solving them takes both time and computing power, and thanks to an algorithm, the more powerful the computer equals to a more difficult problem, those who correctly answers a problem gets the reward, this could be one miner or a pool who split the workload in order to solve the problem fast and share of the profits.
The other ways to get Bitcoins are obtained by paying for goods or services, or directly by buying them from individuals or particular websites, who sells Bitcoins for conventional currencies or other cryptocurrencies.
Now, as an investment product, there are two ways to invest in Bitcoins, one is by “Hodling” which is a term given to those users who mine or buy Bitcoins and then they hold them in their wallets until they see a good profit by selling them for a higher price than the amount of money invested in the mining equipment. Even though holding bitcoins is a slow process, it is recommended for those who are just beginning
The other method is known as Bitcoin speculation, or just “speculating”, which in short terms, it is when the cryptocurrency’s price goes down, many users buy them for that price, and sell them as fast as the price goes up again, earning a small profit from the process, it is a more dangerous process, but it’s also a fast way to invest in bitcoins.
After Bitcoin’s massive success, due to its insane rise over the past year, it opened the doors to a considerable number of businessmen and innovators who saw opportunities to create their cryptocurrencies, also known as “Altcoins” or, alternative cryptocurrencies, which is the generic term used for a non-Bitcoin cryptocurrency.
These Altcoins, who are based on the framework provided by Bitcoins, usually offers many of the same features as Bitcoins, but with minor changes. Their primary characteristics are Peer to peer nature, the ability to be “mined”, privacy, etc., these are a core component of most of the alternative coins and currencies who came out after Bitcoin.
Right now, there are thousands of alternative cryptocurrencies in the market, and more are being created as you read this article, but most of them, serve as Bitcoin clones offering small differences, like the transactions speed, algorithms, and distribution methods.
Other cryptocurrencies are made to solve particular problems or covering things that Bitcoin doesn’t, and other coins are made for specific uses, like purchasing domains and hostings, or for purchasing different types of content.
Instead of aiming to disrupt online banking like PayPal, as Bitcoins plans, Ethereum goals consist in the use of a blockchain to replace internet third parties.
Ethereum wants to e a “World Computer” who aims to decentralise the existing client-server model. Replacing servers and clouds with thousands of so-called “Nodes” run by all its users from across the globe, forming what some people call a “World Computer”.
Ethereum tokens are created through the process of mining at a rate of 5 ether per mined block.
Ethereum’s mining process is similar to bitcoin’s; it makes its miners use computer power to find the correct answer to a puzzle for each block of transaction being created, giving the reward to the first miner who correctly solves the problem.
It is a universal, modern and safe trading platform, made for accessing cryptocurrencies exchange markets, it provides a simple interface and low trading fees, with their API very easy to use and its instructional manual. Livecoin is a service for sale and purchase of cryptocurrencies for cryptocurrencies and fiat money, providing a large variety of trading tools, trading bots and arbitrage.
With all the Altcoin being released every day, it is normal to ask yourself if it is safe, or if it would generate profits and mostly ask “Why do people invest in Altcoins?”.