Is Cryptocurrency the Future Of Money & Are You A Part Of It?
Have you heard of Erik Finman? He was a 12-year-old boy and a high school drop-out in 2011. Bitcoin changed his fate radically. His life story is nothing short of a fairy tale now, as the 18-year-old last year turned millionaire, all thanks to Bitcoin. Bitcoin or Cryptocurrency is nothing but the digital currency that has been encrypted for security reasons. The future of money is here. With Cryptocurrency – the way you pay for anything, the way you get your salary, everything might change.
How Did Cryptocurrency Began?
Cryptography was invented during the Second World War. It was used to pass on information in a secure way. this was the basis of Cryptocurrency. Back in 2009, the first Cryptocurrency was found – “Bitcoin”. Satoshi Nakamoto is considered as the inventor of Bitcoin. Yet, what he thought at that time was Bitcoin would be a peer to peer electronic cash exchange system. Satoshi had managed to make a decentralized digital cash system. Something many people failed to do before him. Today, there are more than 1000 Cryptocurrencies available in the market. However, most people do not understand what it means or how it works.
How Does It Work?
The complex nature of Cryptocurrencies is the reason many people are ignorant about it. We have tried to make it as simple as we can here. If you compare it with a traditional debit card, it would be the same. The only difference is, that instead of the money in your bank account, you will be transferring Cryptocurrencies. All you need is to open an account first. It is called a coinbase account. A user can use it to store, transfer, send, receive, buy or sell Cryptocurrencies.
Instead of the bank keeping a record of your transactions, an algorithm does that. One more difference with the traditional banks or monetary system is that Cryptocurrencies can be exchanged between peers directly. There is no need for a bank or a payment platform like PayPal to work as a mediator. The algorithm that works like a public ledger where all transactions are recorded is called Blockchain. Users have access to this ledger and all transactions can be seen. But, the user’s identity is encrypted and hence, anonymous. The public ledger works like a bank account passbook, where you can actually see not just your transactions but everybody else’s too.
What Is Cryptocurrency Mining?
We already know that all transactions in Cryptocurrency can be seen by all users. Whenever there is a new transaction, it needs to be confirmed. But, who will confirm a transaction in a decentralized setting? The users or rather the miners. The transactions come with Cryptocurrency puzzles. Miners solve this puzzles and the transaction gets confirmed. It is essential to confirm a transaction otherwise it might get forged. When a miner successfully confirms a transaction he receives Cryptocurrencies as rewards. This whole process is called mining.
Which Coins Should Beginners Mine?
Most Cryptocurrency users agree that Bitcoins are not a good choice to mine for beginners. Bitcoins are great for large-scale investments. Beginners would always want to start on a small scale. Apart from Bitcoins, there are other Cryptocurrencies too. These are called Alt Coins or Alternative Coins. Some of the best Alt Coins for beginners to mine are Litecoins, Ethereum, Dogecoins, Feathercoins, Peercoins etc.
For example, Litecoins can help you earn between 50 cents to $10 in a day. Feathercoins, Dogecoins, and Peercoins might be a little less profitable.
A word of caution though. If you stay in Morrocco, China, Bolivia, Ecuador or Nepal, trading of Bitcoins and some other Alt Coins are illegal.
What Are The Risks Of Cryptocurrency Mining?
If you are really serious about mining, you will need to buy hardware that costs between $3000 to $5000. This way you can earn close to $50 per day. You can also pursue this as a hobby. However, if you are planning to earn a substantial amount from Cryptocurrency a better idea is to buy crypto coins. The value of crypto coins keeps changing like gold or other valuable metal. There have been several instances when users became millionaires just because the value of crypto coins jumped high. however, chances of that happening is like winning a lottery! So, the best bet is to continue mining as a hobby. Learning about the risks of Cryptocurrency before starting is better.
As the world moves toward a more technologically sound future, it is imperative to know about all the aspects of it. Cryptocurrencies have already become quite big and might get bigger in future. Now is the time to learn about how it works and why you should do it. Do not forget to research a lot before you start something to avoid scams and don’t forget to pay your taxes. Who knows, you might make a fortune out of Cryptocurrency!
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