The year 2008 is indeed very remarkable in the history of digital currency. It was when cryptocurrency was first invented, and since then, this payment network has changed the world forever.
You might be one of the people who have heard about the latest buzz about Bitcoin. Or perhaps you might want to explore cryptocurrency further.
Recently, cryptocurrency, particularly Bitcoin, had dominated the market, especially when it reached an all-time high of $65,000 in April 2021. People are becoming increasingly interested in digital currencies with their continuously increasing value.
What is cryptocurrency?
A cryptocurrency is a decentralised digital currency that is not issued, regulated or governed by the government or financial institutions like central banks. It was invented by a person or a group of individuals masked under the pseudonym Satoshi Nakamoto.
The creator remains anonymous to this day. He named the first cryptocurrency Bitcoin and made its debut in the market in January 2009.
Bitcoin utilises blockchain technology that serves as a distributed public ledger that records all data and transactions. It allows faster financial transactions without the need for mediators or intermediaries. Also, Bitcoin offers low-cost or sometimes free-of-charge transactions compared to regular banks.
When Bitcoin was first created, it was just mined and not widely accepted as a form of payment. In 2010, Bitcoin’s value began to be recognised when a man in Florida used his cryptocurrency to purchase two boxes of Papa John’s pizza. In particular, he used 10,000 bitcoins which could have been worth a hundred million dollars.
You can check out reputable names like Bitcoin Loophole if you seek a beginner-friendly platform or service to trade and invest in Binance Coin (BNB) and other cryptocurrencies.
How is cryptocurrency acquired?
Cryptocurrencies like Bitcoin are originally acquired through the process of mining. Users utilise specialised computers or ASIC (Application-Specific Integrated Circuit) devices as mining rigs, which work by computing complicated algorithms and mathematical problems.
Every problem solved is equivalent to a single verified transaction, which is recorded via a peer-to-peer network – meaning transactions are stored not just in a single computer but to all external networks or users worldwide. This is how every chain in the block is formed, and the reward of crypto tokens comes after.
Since then, cryptocurrency has served its purposes. Just like fiat money, it is now considered by thousands of merchants as a new form of payment and can also be used in currency exchanges.
Furthermore, cryptocurrency can also be acquired in the market through buying and selling -the so-called trading. In crypto trading, the user or trader usually buys low and sells higher to gain profit and store more assets. Cryptocurrency can also be gained through rewards from certain shops and apps like Lolli. These apps reward you with a certain amount of cryptocurrency for every purchase of their product.
There is also the so-called crypto-gaming, wherein players acquire cryptocurrency through playing games and selling items from their games.
Is cryptocurrency real or a fad?
This concern has been one of the subjects of endless debates by fanatics and sceptics. Since Bitcoin was conceived, critics have considered it another bubble or a fad that won’t last long. However, this digital currency has proven its resilience for over a decade.
Bitcoin has just started low. A few years ago, people did not recognise its value as a currency until 2017, when it reached over $19,000 and continuously surged in the coming years. It made its breakthrough when its price skyrocketed to $65,000 in April.
Up to this day, cryptocurrencies and stablecoins are continuously evolving. It is undeniable how crypto has transformed the financial world and has set standards on how a financial system should be fast, convenient and secure.
As to whether cryptocurrency is just another fad that will soon fade away, we never really know. But one thing is certain -electronic financial transactions are here to stay, contributing to the longevity of cryptocurrencies. It has entered the mainstream, and digital tokens have been used for a long time for every transaction.
Is cryptocurrency a good investment? The answer is yes and no. Yes, if you possess the qualifications to own crypto assets, including knowledge, good management skills and high-risk tolerance, you might want to try entering the cryptocurrency world. Always bear in mind that crypto investment may not be for everyone.
It remains highly speculative due to its price unpredictability and volatility. It may not be recommended for those who have a low-risk tolerance. Experts also suggest that you should not invest huge amounts of money in cryptocurrency alone or in a single platform. Diversifying your portfolio is recommended to minimise great losses and avoid making mistakes.
Overall, cryptocurrency has already entered the mainstream. With its proven resilience, it is less likely to fade away. In addition, more and more people desire convenience, which gives way to full acceptance of digital transactions.