A comprehensive guide to Cryptocurrency

A comprehensive guide to Cryptocurrency

What is Cryptocurrency?

Cryptocurrency is an alternative currency not issued by any government and not associated with any country. It is a digital asset which can be transferred between two people using a code where there is no middleman or no involvement of Credit Company. This decentralized currency maintains anonymity where there is no need to know people who are exchanging and transactions are untraceable. There is also some concern that such currency is used by criminals as privacy is maintained during the transactions.
The first Cryptocurrency, Bitcoin, was invented in 2009 by an unknown person or group of people named as “Satoshi Nakamoto”.

How many Crytocurrencies exist?

Bitcoin was invented first but subsequently, there is number of other introduced later which are collectively called as Altcoin to make it different from Bitcoin. These works on the same basics but they use different code. Following is the list of some alphabetically arranged Cryptocurrencies and the most popular are marked as bold. There are many more as well besides following.

  1. AdEx (ADX)
  2. aelf (ELF)
  3. Aeron (ARN)
  4. AirSwap (AST)
  5. Agrello (DLT)
  6. AION (AION)
  7. Amber (AMB)
  8. Ark (ARK)
  9. Basic Attention Token (BAT)
  10. BCX (BCX)
  11. Bancor (BNT)
  12. Binance (BNB)
  13. Bitcoin (BTC)
  14. Bitcoin Cash (BCC)
  15. Bitcoin Diamond (BCD)
  16. Bitcoin Gold (BTG)
  17. BitShares (BTS)
  18. BlockMason Credit Protocol (BCPT)
  19. Bread (BRD)
  20. Bytom (BTM)
  21. Cardano (ADA)
  22. ChainLink (LINK)
  23. Cindicator (CND)
  24. CoinDash (CDT)
  25. CyberMiles (CMT)
  26. Dash (DASH)
  27. Decentraland (MANA)
  28. DigixDAO (DGD)
  29. district0x (DNT)
  30. Enigma (ENG)
  31. EnjinCoin (ENJ)
  32. EOS (EOS)
  33. Ethereum (ETH)
  34. Ethereum Classic (ETC)
  35. ETF (ETF)
  36. Etherparty (FUEL)
  37. EthLend (LEND)
  38. ETHOS (BQX)
  39. Everex (EVX)
  40. FunFair (FUN)
  41. Genesis Vision (GVT)
  42. Gifto (GTO)
  43. GXShares (GXS)
  44. HealthCare Chain (HCC)
  45. Hshare (HSR)
  46. ICON (ICX)
  47. ICONOMI (ICN)
  48. Komodo (KMD)
  49. KyberNetwork (KNC)
  50. Lisk (LSK)
  51. Litecoin (LTC)
  52. LLToken (LLT)
  53. loopring (LRC)
  54. Metal (MTL)
  55. MIOTA (IOTA)
  56. Modum (MOD)
  57. Moeda Loyalty Points (MDA)
  58. MONACO (MCO)
  59. Monero (XMR)
  60. Monetha (MTH)
  61. Neblio (NEBL)
  62. NEO (NEO)
  63. NeoGas (GAS)
  64. Nuls (NULS)
  65. OMG (OMG)
  66. openANX (OAX)
  67. OYOW (YOYO)
  68. et (POE)
  69. Populous (PPT)
  70. PowerLedger (POWR)
  71. Qtum (QTUM)
  72. Quantstamp (QSP)
  73. Raiden Network Token (RDN)
  74. Request Network (REQ)
  75. Ripio Credit Network (RCN)
  76. Ripple (XRP)
  77. Salt (SALT)
  78. Simple Token (OST)
  79. SingularDTV (SNGLS)
  80. SONM (SNM)
  81. Status (SNT)
  82. Stellar Lumens (XLM)
  83. Storj (STORJ)
  84. Stratis (STRAT)
  85. Substratum (SUB)
  86. Super Bitcoin (SBTC)
  87. TetherUS (USDT)
  88. Tierion (TNT)
  89. Time New Bank (TNB)
  90. TRON (TRX)
  91. VeChain (VEN)
  92. Verge (XVG)
  93. Viberate (VIB)
  94. WaBi (WABI)
  95. WaltonCoin (WTC)
  96. Waves (WAVES)
  97. Zcash (ZEC)
  98. ZCoin (XZC)
  99. ZRX (ZRX)

The market of Cryptocurrency is extremely promising. At the same time, it is very risky to invest. New cryptocurrencies are emerging at the high pace while many older losing strength. Some get wealthy while some become bankrupt. New Cryptocurrency comes with a promise to change the whole world which may or may not be true.

How to calculate the value of any Cryptocurrency?

The real value of Cryptocurrency is determined by the market. It is not controlled by any central bank. Cryptocurrency is controlled by an algorithm which cannot be changed by anybody. So, nobody has the control on how many such Cryptocurrency can be created in future. Most of the time, the total number is fixed. Cryptocurrency comes under the category of “Fiat money” where the value is decided based on the relationship between supply and demand. So, it is of less importance to measure the real worth at any given moment. Its value can go up or down based on supply and demand. The value of most government-issued currencies is based on physical commodities like Gold, but fiat money is based on faith and fear. Any good news in the market can increase the value while any bad news will decrease the value. Government regulations, new legal rules, country-based restrictions, etc are the very important aspects in increasing or decreasing the g current market price of cryptocurrencies.

Bitcoin is accepted currency for payment at major websites like Expedia, WordPress, Biratebay, Reddit etc. However, most of other currencies have value only in its exchange and how quickly it is getting accepted by major retailers worldwide. Any currency has value only if there are people who are willing to give any product or service on its exchange.

Other benefits or owning Cryptocurrency

This is very easy to manage different accounts for these currencies. As nobody knows how much you own so you are safe from hackers, cyber criminals and criminals. Money can be transferred just by codes globally. The main benefit is very low transaction fees during transfer of money to anybody all over the world. It is very easy to send big money or tiny amount globally without the involvement of any bank. There is no need to lose money during exchange at the time of global payment. You don’t need to give your personal details to anybody before making any transactions. So, it is safe method for payment without the fear of identity theft. As payments are irreversible, there is no need to worry about charge backs like Visa, MasterCard or PayPal. Many people see Cryptocurrency as long term investment plan. Purchasing Bitcoin to is also emerging as a way to protect devaluation of national currency and is very popular in countries like Zimbabwe. The power of Smart Contracts or token on Ethereum platform is also getting popular enabling companies to get millions of dollar in crowd funding.

How to store Cryptocurrency?

Cryptocurrency is digital money so owning Cryptocurrency simply means that you have a software address where money is stored and a secret key to see and use the balance. The address and key can be stored electronically or on paper as long as you can perverse it. The place where you store Cryptocurrency is called as Wallet. Wallet can be online or offline. Online wallet can be of two type – first is wallet available at different websites and second is wallet software stored in computer. Offline wallet can be a hardware based wallet which is just like a memory card or junk drive which can be accessed using USB port. As Cryptocurrency is based on code so the safest way to store it is use paper based method. Hackers may get access to online system so there is always a risk for online storage of money. However, paper based storage is least convenient. Having digital wallet is first thing to do before getting any Cryptocurrency.

How to buy Cryptocurrency?

There are many exchanges and trading platforms where Cryptocurrency can be purchased. They also provide a digital online wallet to store purchased Cryptocurrenies. However, you can transfer your currency to any personal wallet anytime. You should always be extremely careful at the time of choosing right exchange or trading platform as you are going to give your bank or card details. The most popular place to purchase Bitcoin, Bitcoin Cash, Ethereum, and Litecoin in USA is Coinbase exchange by paying in USD, Euro or GBP. Money can be transferred through online banking, wire transfer, ACH transfer, credit card, debit card. You also need to verify your identify by uploading your identify card to fulfill the legal requirement of KYC (Know Your Customer).

Binance is the trading trading platform where you can purchase 100s of altocoins. However, you can’t purchase altcoins directly by paying in Dollar or Euro. First you need to buy other cryptocurrencies like Bitcoin, Litecoin, Ethereum somewhere (may be from Coinbase) then you need to transfer that to Binance balance and subsequently you can buy Altcoins with that balance. In other words, this is just the exchange and not the actual buying with dollars. This is also known as trading. On Binance, all trading is done with BTC, ETH, BNB or USDT. Even if you have any altcoin, you can transfer it to Binance balance and then you need to purchase one of above four currencies at market price first to exchange it for other altcoins like Verge later.

Other places to buy crytocurrencies are CoinMama, Cex.io, Virwox, BitPanda, Xcoins, ExmoBitstampBitfinexKraken etc. Some people also sell Bitcoin and other altcoin on eBay but the prices are at much higher rate compared to current market value. So if you only have this option to buy and if you are ready to give extra dollars then you can opt for this option as well. Some people also sell cryptocurrencies on local sites like craigslist, offer up, letgo etc. But you should be extremely careful as these are just the digital assets and transfer between individuals is based on the code. There is no proof for such exchanges and you either cannot claim your receipt or difficult to analyze the transfer. There is no government regulation on these currencies so you cannot claim if there is any issue.

There are some options to purchase cryptocurrencies in cash by trading with someone in real life. Localbitcoins.com provides a platform where people can buy Bitcoin by paying in cash to nearby people interested in selling. However, you should be extremely careful during such deals and should always meet in public place because of the personal safely reason. However, money can be transferred digitally.

Is it legal to own Cryptocurrency?

Anybody in world may gain access to Cryptocurrency. However, there is no legal standing for such currencies and some countries like Iceland had imposed ban on their use. Some countries are also imposing restricted use where it is necessary to disclose profit made with Cryptocurrency for tax purposes.

What is Cryptocurrency mining?

The total number of all Cryptocurrency is generally fixed. The new coins are released on a steady and predictable rate but the total number is always fixed. Mined Cryptocurrency comes in circulation. Mining new coins is not possible once that final target is reached. The verifications of the transactions in network is also called mining. In early days, it was easier for people to mine coins with regular computer but now the competitions is too high and sophisticated hardware have come in market which is used to mine new coins. At present, it is not a profitable reason to start mining if one doesn’t have sufficient financial backups to build mining infrastructure. It may be waste of time without good infrastructure.

What is the risk associated with keeping crytocurrency?

There is always a risk associated with software based currencies. Cryptocurrency ownership is based on some code and private keys. If somebody gains access to code and key then they can steal the stored money. Therefore a certain level of computer skill is required to understand associated risk and to keep money safe.