Cryptocurrency at a Glance: 6 Fast Facts About Cryptocurrency You Need to Know
Getting into crypto today is one of the easiest financial ventures for anyone to take. For instance, it would take mere seconds for absolutely anyone to set up a Monero wallet and another minute to head for a crypto exchange to buy XMR. As easy as this is, however, it would be a terrible idea to make this investment without knowing anything about it. The prospect of research could be intimidating for a newbie who’s attempting to understand facts about cryptocurrency. The technology alone is overwhelming even for those who already hold coins of their own, and this is not even account for the variations in code base between altcoins.
Rather than going into things blind, it’s still best for beginners in crypto to learn everything that they can about it before they start trading in earnest. Here are some fast facts about cryptocurrency to help get things started.
Cryptocurrency Is Decentralized
Having a decentralized system of finance is not as complicated as it may sound at first. Essentially, it means that no single entity is in charge of any of the crypto coins, even if they have their own founders and programmers. In contrast, legal tender—as the term implies—is regulated by the governments of each nation. Any activity involving cash is usually centralized within the banks as well.
This is not to say that cryptocurrency cannot be taxed since some countries are already beginning to do so. Instead of processing it through financial institutions, it utilizes blockchain technology trends that rely on the community of users—the people themselves—to verify and process transactions in seconds.
Impossible to Prohibit
Some nations have been attempting to outright ban the usage and circulation of cryptocurrencies among their citizens. These attempts have failed for many reasons, but mainly, it is because of the great accessibility that crypto exchanges offer to the average person. It is very easy to secure a crypto wallet, and it takes only the internet and a few minutes to get started on any crypto exchange market.
Furthermore, crypto is a digital currency, and there will always be platforms throughout the globe that will accept altcoin transactions, even if an entire country prohibits it. Having said this, it is still possible to regulate its usage as calls for this growth around the world.
Simpler Than Banks
The technology itself behind crypto can be very complex for any newbie to understand, but what matters is that it makes the market easy to enter for investors. Banks and stock exchanges can make the process to engage a bit complicated if not convenient, but trying out the cryptocurrency exchange only takes some money, time, and the internet.
Furthermore, the more ambitious individuals can even enter the market with their own altcoin quite easily. Again, it only takes time, a little money, and a group of programmers, and no bureaucracy is required to go straight in.
Thousands of Altcoins
In the same way that there are different currencies per country, there are also different altcoins on the global crypto exchange. Compared to the 180 currencies that are recognized globally, there are about six thousand altcoins in circulation right now.
As mentioned, it is much easier to register a new altcoin into the market than even the stock exchange, much less a whole new real-world currency. It is still worth noting that each altcoin may offer a distinct approach to crypto, especially through feature sets, so there are reasons to buy one coin over the other.
A Maximum Number of Coins
There is actually a maximum number of coins available for ownership and circulation for any cryptocurrency, though this number varies per altcoin. The reason for this is quite complicated since it has to do with a mix of both economics and technology, but like most assets, its value is simply rooted in supply and demand.
What this means is that no digital currency is unlimited, and not even the wealthiest entities can keep purchasing an endless supply of any single altcoin. Nevertheless, it can feel limitless due to the immense value in the legal tender for which these coins can go.
No Basis for Value
Physical money began from bank notes that equated to value in gold a long time ago. That somewhat holds true today in that fiat money does have a real basis for its legal value. The same can be said for stocks and companies whose market value can be traced to their financial history and economic trends.
On the other hand, the value of the cryptocurrency has no tangible basis in the real world, so to speak. This is not because it is simply virtual in nature but because it cannot be traced to any fundamental value that defines it as an asset. This plays heavily into the volatility of the market and why nearly anything can influence its behavior.
Take note that these facts are not extensive as there is a whole lot more to grasp about the entire cryptocurrency market, but the information serves as a good start to beginners. With this kind of resource, it is always ideal to be responsible and to research as much as possible rather than going in blindly. After all, properly discerning a financial decision could lead to a groundbreaking investment.
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