Cryptocurrency: know all about Digital Currencies
Cryptocurrency: know all about Digital Currencies
The cryptocurrency market arouses interest and still leaves doubts for many people.
You've certainly heard of some digital currencies: Bitcoin, Ethereum, Dash, LiteCoin, Monero, among many others.
But how do you know which one is best for you and how to invest in cryptocurrency? In this content we will talk about the topic of the moment in investments.
What is Cryptocurrency?
There's been a lot of talk about cryptocurrencies lately, and we'll probably hear a lot more about them. However, do you know what they are?
In short, cryptocurrencies are digital currencies created by complex computational processes in super powerful computers.
These computers put together unique strings of numbers and letters, creating a unique code that results in a cryptocurrency.
As such, they are not coins printed by governments or banks like the traditional money in our accounts or wallets.
The first and most famous of them is Bitcoin, created in 2008 by Satoshi Nakamoto. There are, however, millions of other virtual currencies that you have no idea.
Therefore, it is important to know the possibilities, advantages and risks of this diversification strategy and also means of payment.
How to invest in cryptocurrency?
The last few months have been intense for those who invest in digital currency. There were days of historic highs and also of sudden falls.
It certainly was a test for cardiac patients and served to impact many people's willingness to risk.
But is the devaluation of some cryptocurrencies a big problem or is it the chance to take the opportunity to buy low?
Without a doubt, the secret of big investors is to anticipate trends and take advantage of bearish assets. In this way, it is possible to bill in the future valuation.
You can invest in cryptocurrencies through Investment Funds that have these assets, for example.
In the main brokers in the country, this type of investment is available to any investor.
So, to start investing in cryptocurrency, you just need to know your investor profile. If you don't already know, get tested now.
Promising cryptocurrencies
Bitcoin
The most famous virtual currency, without a doubt, is Bitcoin (BTC). As mentioned above, a programmer known as Satoshi Sakamoto introduced Bitcoin for the first time in 2008.
It took about a year to mine the first 50 BTCs. And so the first offer of the cryptocurrency took place.
However, the big growth of Bitcoin happened in 2010 with the blockchain updates.
The main characteristic of BTC is that it is a decentralized asset. In other words, there is no control by governments or central banks.
However, a Bitcoin investor must inform the IRS that he has BTC or any other cryptocurrency.
Ethereum
Ethereum (ETH) actually emerged as Ether. However, in 2016, there was a millionaire theft due to a flaw in the first versions.
As a result, some Ether adherents decided to create a more secure cryptocurrency. Then they started calling the virtual currency Ethereum.
ETH also uses Blockchain to validate transactions. And just like Bitcoin, Ethereum also requires the mining process.
Litecoin
Another well-known cryptocurrency is Litecoin (LTC), which appeared in 2011. The objective was that the processing of transactions was faster than Bitcoin.
LTC creator Charlie Lee wanted data mining to be different too. The idea was that more people could participate and produce the virtual currency.
In fact Litecoin is faster, but it is far removed from the popularity of BTC.
6 myths about Bitcoin
In fact, lack of knowledge can drive people away from this type of investment. In addition to helping to disseminate incorrect information.
To clear up misunderstandings and clear up doubts about the matter, Daniel Coquieri, who is BitcoinTrade COO, explains below the 6 main myths about Bitcoin. Check out:
- Bitcoin is not traceable
Bitcoin transactions are indeed traceable. The techniques for this are the same as those used to track an email or other digital information.
In any case, those who invest in Bitcoin at some point will want to transform their crypto into traditional currencies, such as the dollar or the real.
For this, the person will need to have an account on an exchange. Thus, you will need to submit your personal data. In addition, you will have to declare this cryptoactive to the Internal Revenue Service.
- Bitcoin is illegal
Although there is still no specific regulation for cryptocurrencies in Brazil, it is incorrect to say that the operation with Bitcoins is illegal.
The currency even serves as payment for various products and services, for example:
And, as we said above, it is necessary to declare the ownership of the currency in the Income Tax.
Of course, not all establishments accept Bitcoin purchases. But this is a trend that has been gaining more and more attention from the trade.
- Bitcoin is based on mere speculation
As a precious metal, Bitcoin is also finite. Because we know it's limited to 21 million units. No wonder cryptocurrency is called “digital gold”.
Therefore, the value of Bitcoin is linked to this offer. Thus, it can also undergo changes based on factors other than speculation, such as:
Plans to regulate digital currency;
Comments from politicians on the subject; and
The arrival of new cryptoactives on the market, among others.
- It is necessary to have the entire value of a Bitcoin to start investing
In fact, it is possible to start investing in small portions of Bitcoin. Each brokerage in the market stipulates the minimum amount to carry out applications.
In this sense, it is usually possible to start investing with small amounts. With R$50 to R$100 it is already possible for the user to buy some Bitcoin fractions.
- Investing in Bitcoin is not safe
Bitcoin works based on blockchain technology . That is, a chain of information blocks in which transactions are compiled in encrypted form.
In other words, it is like a “book book” that records the amounts that are sent and received.
This way, this data is stored in several different “libraries”, making it very difficult to delete them.
To access a block, it is necessary to decipher its algorithm and also that of the previous block, which would need the antecedent and so on.
The blockchain is still public, which means that everyone can access the transactions and audit them as well.
The security of the Bitcoin Network can still be confirmed by the fact that it has never been hacked since its creation in 2009.
Blockchain data still shows that cryptocurrency is currently eight times more powerful in terms of security than at the end of 2017, when Bitcoin was quoted at around $20,000.
- Bitcoin is a pyramid scheme
In a pyramid scheme, there is no asset involved. The money accumulates as new members join, who support the earnings of older ones.
Bitcoin, in turn, works on a very different logic. It is a virtual currency, with finite stock and highly volatile quotation. It can be bought and sold just like any other currency in the world.
To invest safely in cryptocurrencies, it is important to study the market. Don't just follow what someone told you, look for validated information.
Before buying a cryptocurrency, you need to assess risks and look for a safe broker. That way you can answer your questions about the subject.
Brazilian digital currency
At a time when cryptocurrencies are being debated around the world, the Central Bank is making progress in the creation of the Brazilian digital currency.
Real Digital, as it will be called, has already won a series of webinars. Among the lectures is “Potencials do Real in digital format”.
According to Agência Brasil , the Central Bank invited Professor Robert Townsend, from the Massachusetts Institute of Technology (MIT). The speaker participates in the project to create the digital dollar.
In May, when it announced the guidelines for creating the Real Digital, the BC explained the difference between cryptocurrencies and digital currencies.
This is explained by the coordinator of the work on digital currency at the Central Bank, Fabio Araujo.
Cryptoactives, like Bitcoin, do not have the characteristics of a currency, but of an asset. The Central Bank's opinion on cryptoactives remains the same:
– these are risky assets,
– not regulated by the Central Bank, and
– must be treated with caution by the public.
Conclusion
Finally, it is important to make clear that cryptocurrencies are a variable income investment.
That is, there is a lot of risk involved and you need to make sure you are comfortable with the swings in this market.
Now that you know what cryptocurrency is and how to invest in virtual currencies, how about sharing this content?
This way, you help others who also want to learn more about digital currencies and invest better.
Cryptocurrency: know all about Digital Currencies
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