The growing relevance of the cryptocurrency market marks a unique opportunity for individuals who are willing to take on the wild price movements that those in the field have grown accustomed to. Offerings range from large, multi-billion-dollar market cap coins such as the likes of Bitcoin, Ripple, and Ethereum, all the way down to emerging currencies being put up through initial coin offerings (akin to a company going public and being listed on the stock exchange through an IPO) there is tremendous diversity in the market. The risks and possible gains coming from investing in cryptocurrency is unparalleled by any modern financial instrument and as such must be met with both caution and realistic optimism.
The Blockchain: What is it and what impact can the technology have?
Blockchain technology is an innovation that not only has the possibility of disrupting the currency market but could serve to be a revolutionary component to the protection of data in an ever-growing modern market. On the cryptocurrency side, the blockchain acts as a way to account for all the transactions that occur between the users within the network. The ability to process and contain vast swaths of transactional data signals that the technology could be utilized in a variety of other professions and could be used to increase efficiency in the processing of data. In a data-driven world, being able to manage and contextualize data effectively gives a business a distinct competitive advantage when compared to other companies.
The Backbone of all Crypto: Mining and Why Crypto Miners are the Key Players Moving the Future of Currency
In the traditional sense of the word, mining holds connotations relating to a strenuous endeavour that often requires vast amounts of resources to possibly uncover something of value from the earth. The digital age has brought about another meaning to the term mining but conceptually is the same as traditional mining efforts. Mining for cryptocurrency is the act where computing power is utilized to solve complex mathematical problems tied to a block within the blockchain to secure transactions for users within the network through cryptography. As a reward for solving the complex problem, the miner is rewarded with a small amount of cryptocurrency. Due to the growing competition in mining, most miners join forces with other miners and ‘pool’ their computing power (hence the term pooled mining). Without miners, cryptocurrency wouldn’t be able to sustain the security of transactions and be able to facilitate said transactions making miners an integral part of the cryptocurrency market. In the modern day, personal mining is far too expensive and will often yield little to no actual gain in currency as institutional mining has grown due to companies being able to leverage far more capital to fund mining efforts. For the modern-day investor, the mining process is a poor space to move into, but the importance of mining for sustaining the cryptocurrency market cannot be understated as without mining the crypto market would not exist.
Bitcoin
Bitcoin is the largest and most well know cryptocurrency and is most known for pioneering the concept of the decentralized ledger.
Litecoin
In the early days of the crypto market, Litecoin made its way onto the market following the release of Bitcoin changing aspects such as changing the hashing algorithm (Litecoin was the first coin to be based on Scrypt rather than SHA-256) making mining more memory intensive.
Bitcoin and Litecoin are essential to learn about because the early differentiation in coins would only be the start to changes that would be made to future cryptocurrencies and the releases of each marked distinctive periods within the growth of the market as a whole.
Top players in the crypto market offer a wide variety of changes:
These are just a few examples of what cryptocurrency differentiation has been shown to offer, and with over 1600 coins on the market, the examples listed here are only scratching the surface of what the technology-driving cryptocurrencies have to offer.
Bitcoin
Bitcoin is by and large the most visible of the offerings within the crypto market meaning that news and information about the current state of the coin are the most readily available of all the offerings in the market. Understanding Bitcoin is pivotal to moving into the crypto market as price swings of Bitcoin often drive prices for many other coins within the crypto sphere. Price volatility is a common theme for Bitcoin and swings of upwards of 5% on the day can be a common occurrence meaning that investing in crypto is not for the faint of heart. Regulation is a common issue that can drive the price of Bitcoin down and anticipating such a move can prove profitable for short-term investors.
Short-term trading, while risky, can prove extremely profitable as many investors can capitalize on the large swings in price for crypto that are not a regular occurrence for other financial instruments.
Long-term traders need to keep a level head and not fall victim to possible irrationality in pricing as many have become victim to in the past years when many assumed that the prices would never stop climbing (Late 2017 to 2018 boom then bust).
Altcoins
Altcoins need to be approached with caution and investors must take into account the legitimacy of specific altcoins before choosing to invest. With over 1600 different cryptocurrencies, scams are bound to exist and many operations, inevitably, will not be genuine coins that have a future in the market. Less information on many of the offerings is available, but there is still high upside potential if investors account for concerns and follow news that ties to each respective coin.
Short-term investing has the same issues as Bitcoin but on a greater scale because variability in price is much more volatile and often is not based on rationality.
Long-term investing requires in-depth and continual research into the particular altcoin and careful monitoring of news regarding the specific altcoin.
The Crypto Market: The Future of Crypto Technology and Crypto Investing
The crypto market marks a shift in the way that the public is beginning to view currency and is evidence of the growth of technology and subsequent technological advances within our society. Innovation brought about by the blockchain, and related technology will prove to be stepping stones toward a more efficient data-driven world.
Crypto investing will only grow more stable over time as prices begin to settle down to their equilibrium (whatever that is we will have to see) and altcoins that fail to meet consumer or investor needs will falter. Much of what we know about crypto investing will evolve as we see more regulation and standardization come into play which can both be seen as a positive but to many is seen as derailing the original purpose of the medium of transaction.
No matter how the market shifts, the technology and the innovation that has arisen have forever changed how consumers do and will operate online.
What is cryptocurrency?
Cryptocurrencies are, at their base level, a decentralized digital medium of exchange that requires no third-party intermediary to facilitate a transaction. Cryptocurrency transactions are considered to be more secure by most because, unlike many other payment mediums, there is no question of ulterior motives of the group facilitating the transactions. After all, in the case of crypto, the entire coin network is facilitating and confirms every transaction. Transaction encryption and confirmation are accomplished through the process of mining and what is referred to as the ‘blockchain.’The Blockchain: What is it and what impact can the technology have?
Blockchain technology is an innovation that not only has the possibility of disrupting the currency market but could serve to be a revolutionary component to the protection of data in an ever-growing modern market. On the cryptocurrency side, the blockchain acts as a way to account for all the transactions that occur between the users within the network. The ability to process and contain vast swaths of transactional data signals that the technology could be utilized in a variety of other professions and could be used to increase efficiency in the processing of data. In a data-driven world, being able to manage and contextualize data effectively gives a business a distinct competitive advantage when compared to other companies.
The Backbone of all Crypto: Mining and Why Crypto Miners are the Key Players Moving the Future of Currency
In the traditional sense of the word, mining holds connotations relating to a strenuous endeavour that often requires vast amounts of resources to possibly uncover something of value from the earth. The digital age has brought about another meaning to the term mining but conceptually is the same as traditional mining efforts. Mining for cryptocurrency is the act where computing power is utilized to solve complex mathematical problems tied to a block within the blockchain to secure transactions for users within the network through cryptography. As a reward for solving the complex problem, the miner is rewarded with a small amount of cryptocurrency. Due to the growing competition in mining, most miners join forces with other miners and ‘pool’ their computing power (hence the term pooled mining). Without miners, cryptocurrency wouldn’t be able to sustain the security of transactions and be able to facilitate said transactions making miners an integral part of the cryptocurrency market. In the modern day, personal mining is far too expensive and will often yield little to no actual gain in currency as institutional mining has grown due to companies being able to leverage far more capital to fund mining efforts. For the modern-day investor, the mining process is a poor space to move into, but the importance of mining for sustaining the cryptocurrency market cannot be understated as without mining the crypto market would not exist.
What Differentiates Cryptocurrencies
Not all cryptocurrencies are made for the same purpose, and many coins have unique features that make them shine beyond the ever-growing crowd of new coins popping onto the market.Bitcoin
Bitcoin is the largest and most well know cryptocurrency and is most known for pioneering the concept of the decentralized ledger.
Litecoin
In the early days of the crypto market, Litecoin made its way onto the market following the release of Bitcoin changing aspects such as changing the hashing algorithm (Litecoin was the first coin to be based on Scrypt rather than SHA-256) making mining more memory intensive.
Bitcoin and Litecoin are essential to learn about because the early differentiation in coins would only be the start to changes that would be made to future cryptocurrencies and the releases of each marked distinctive periods within the growth of the market as a whole.
Top players in the crypto market offer a wide variety of changes:
- Ripple is focused on establishing a network for asset transfers that would be easier to facilitate transactions and promote a more transparent transaction environment.
- Ethereum is focused on facilitating transactions between parties based upon a secure network (Ethereum has many more possible uses for companies beyond acting as a cryptocurrency and is not limited in the same way that Bitcoin is).
- Bitcoin Cash was formed due to uncertainty about the future of Bitcoin and has taken measures to change the mining process to ensure the long-term survival of crypto (lots of concerns about the security of the coin have surfaced).
- EOS is an application platform based on the blockchain where developers can utilize the technology and is often compared to Ethereum for what can be done with the product.
- Stellar is similar to Ripple but is more focused on small communities and impoverished areas while Ripple is more tied to banks and financial institutions.
- Monero changed the mining algorithm of Bitcoin and is seen to provide more security.
These are just a few examples of what cryptocurrency differentiation has been shown to offer, and with over 1600 coins on the market, the examples listed here are only scratching the surface of what the technology-driving cryptocurrencies have to offer.
Investing in Bitcoin, Altcoins, and ICOs: Treading Into the Dark Waters of Risk
Prices for different crypto offerings are highly variable, and it is often hard to predict price swings. Any individual looking to possibly invest in Bitcoin or any combination of altcoins needs to exercise great caution as price determinants are not standardized to the extent that traditional financial instruments are (even if traditional options are still highly variable). Each category of investment carries unique challenges and potential upsides.Bitcoin
Bitcoin is by and large the most visible of the offerings within the crypto market meaning that news and information about the current state of the coin are the most readily available of all the offerings in the market. Understanding Bitcoin is pivotal to moving into the crypto market as price swings of Bitcoin often drive prices for many other coins within the crypto sphere. Price volatility is a common theme for Bitcoin and swings of upwards of 5% on the day can be a common occurrence meaning that investing in crypto is not for the faint of heart. Regulation is a common issue that can drive the price of Bitcoin down and anticipating such a move can prove profitable for short-term investors.
Short-term trading, while risky, can prove extremely profitable as many investors can capitalize on the large swings in price for crypto that are not a regular occurrence for other financial instruments.
Long-term traders need to keep a level head and not fall victim to possible irrationality in pricing as many have become victim to in the past years when many assumed that the prices would never stop climbing (Late 2017 to 2018 boom then bust).
Altcoins
Altcoins need to be approached with caution and investors must take into account the legitimacy of specific altcoins before choosing to invest. With over 1600 different cryptocurrencies, scams are bound to exist and many operations, inevitably, will not be genuine coins that have a future in the market. Less information on many of the offerings is available, but there is still high upside potential if investors account for concerns and follow news that ties to each respective coin.
Short-term investing has the same issues as Bitcoin but on a greater scale because variability in price is much more volatile and often is not based on rationality.
Long-term investing requires in-depth and continual research into the particular altcoin and careful monitoring of news regarding the specific altcoin.
Initial Coin Offerings (ICOs)
Initial Coin Offerings are one of the riskiest investments in the crypto world because the initial pricing of a coin is often hard to determine. Worries of pump and dumps and scam coins are rife and most new coins offer no real change to the market that would be of any relevance. ICO investment can be lucrative and has a high potential upside but is an enormous gamble which, for most, often doesn’t pay off. Venturing into Initial Coin Offers is only for investors who are willing to lose money and should not be looked upon as an investment strategy to base your crypto portfolio onThe Crypto Market: The Future of Crypto Technology and Crypto Investing
The crypto market marks a shift in the way that the public is beginning to view currency and is evidence of the growth of technology and subsequent technological advances within our society. Innovation brought about by the blockchain, and related technology will prove to be stepping stones toward a more efficient data-driven world.
Crypto investing will only grow more stable over time as prices begin to settle down to their equilibrium (whatever that is we will have to see) and altcoins that fail to meet consumer or investor needs will falter. Much of what we know about crypto investing will evolve as we see more regulation and standardization come into play which can both be seen as a positive but to many is seen as derailing the original purpose of the medium of transaction.
No matter how the market shifts, the technology and the innovation that has arisen have forever changed how consumers do and will operate online.
