What is a cryptocurrency? How do I purchase virtual currency? How can I have a passive income? These are some questions we will answer in the article below.
What is Cryptocurrency?
A cryptocurrency is a digital form of money. You can use these coins to pay for various things such as drinking at the bar, buying a new pair of tennis shoes, or booking flights and hotels for your next vacation. Because cryptocurrency is digital, it can be easily and quickly sent to anywhere in the world.
This system seems familiar, doesn’t it? Sounds like PayPal or other alternative online transfer solutions. Well, cryptocurrency is so much more than that.
You see, traditional online payment systems are owned by organizations. They keep your money in an account for you, and you have to ask them to transfer it to your name when you want to spend it.
In the cryptocurrency industry, there are no organizations. You can act as your own bank. Your computer connects to other people’s computers, which means that direct communication is created – no intermediaries are needed!
To buy cryptocurrency, you do not have to register on a website or go through complicated operations. You can start using Coinzix today to invest in any cryptocurrency, and it becomes your asset. Its value will constantly increase.
Have you ever wondered why it is called “cryptocurrency”?
From all the possible names invented by man, the term cryptocurrency was chosen. Now, you need to know that there is a logic behind it. The name cryptocurrency is a combination of words between cryptography and currency. With cryptography, we use advanced math to make sure, or rather, secure the funds, making sure no one else can spend them.
Now, this money on the internet is not owned by anyone, and they use cryptography to secure the system. But there are already applications for paying the bills, the expenses we make – why would we need something so complex?
Here are some reasons why you should take cryptocurrencies seriously and start investing in your financial future today.
- The crypto-system is not requiring any Permissions
No one can stop you from using these coins. Centralized payment services, on the other hand, can freeze accounts or prevent transactions for various reasons. Why have stress when the world is dearer to you?
- The crypto-system is Censor Resistant
Censorship is a very well-developed thing in some regions of the world, and I will not give names – Korea and China. Due to the way the network is designed, it is impossible for hackers, other attackers, or even governments to shut it down.
- The crypto-system is cheap and has high-speed payment methods
Remember when you made the last bank transfer between you and someone who was quite far away from you? I do! It took three days for the banking operation to take place. Now, think of a transaction with someone on the other side of the world, and the money is transferred in seconds – at a fraction of the cost of an international bank transfer.
I’ve heard of Bitcoin for many years. The first cryptocurrency was created in 2009. Amazingly, no one knows who invented Bitcoin. So far, we only know one name – Satoshi Nakamoto. Of course, Satoshi could be a single person, a group of programmers, or a secret government team of Russian descent if you like conspiracy theories.
Satoshi published a 9-page document in 2008 detailing how the Bitcoin system worked. Later, in 2009, the software itself was released.
Bitcoin has provided its “foundation” for many other cryptocurrencies. Some relied on the same software, while others took a very different approach. Okay, okay, but you say – what’s the difference between cryptocurrencies?
If you read the previous article, you will see that each cryptocurrency has its mission and vision. To make a list of all the cryptocurrencies would take us weeks. Some are faster than others, some are more private, some are more secure, and some have more significant development potential.
In the crypto world, there is a saying: DYOR. No, no, it’s not a perfume ad, but it comes from Do Your Own Research, so I’ll let you analyze which currencies best suit your level of investment risk.
We’ve seen so far what a cryptocurrency is and what it can do, now let’s understand the term blockchain.
What is a blockchain?
Don’t be scared of the term ” blockchain ” seems too technical. Blockchain is a database. In particular, it is not something very sophisticated, but there are some peculiarities of these databases. First of all, blockchains are databases in which you only add information. This means that you can add information, but you can’t edit or delete things you’ve already added.
Second, each entry, called a block, in the database is encrypted. Each new piece of information contains a fingerprint, which in IT is called a ” hash. “
In essence, Blockchain is a standard, immutable registry that facilitates the process of recording transactions and tracking assets in a business network. As a result, any information can be tracked and traded in a blockchain network, reducing risk and costs for everyone involved.
Why is the Blockchain important? The business is based on information. The faster this information is received and the more accurate it is, the better. Blockchain is ideal for delivering that information because it provides immediate, shared, and utterly transparent information stored in an immutable registry that can only be accessed by authorized network members.
A blockchain network can track orders, payments, accounts, production, and more.
Given that we now understand what we are going to work with, we move on to understanding the differences between trading and intelligent investing.
What does trading mean?
Trading is a short-term approach to profit generation. People interested in a quick passive income buy and sell positions in a very short time. But how do I know when to buy or sell? This question reminds me of a hilarious video that I, unfortunately, can’t find anymore, but I’ll tell you. There were two young people, and one asked the other, “how did you manage to buy this car?” to which the other responded, “well, I buy expensive coins and sell them when they are more expensive.”
One of the most common ways to make sense of the cryptocurrency market is through technical analysis (TA). Technical analysts analyze price history, charts, and other types of market data to determine the chances of making a profit.
At the opposite pole, however, is the term “investment.”
What does it mean to invest?
Investment is a long-term aspect. The question you are thinking about now is whether it is worth trading or investing in crypto? The answer depends. It depends on your interests, your need to make money fast, the money you start with, the risk level you will take.
Many Bitcoin investors follow the “HODL” philosophy. This philosophy means that they believe so deeply in the success of Bitcoin that they do not intend to sell their investments – for a long time.
Throughout the article, you have seen the term passive gain or passive income.
What is this passive income?
Passive income must be one of the most exciting ways to make money. Passive income is the money that gets into your accounts regularly without having to put in a considerable amount of effort or other funds to create it. In other words, the profit you make from an investment is passive income. The more, the better.
As Warren Buffett, one of the most successful investors of all time put it: “If you can’t find a way to make money while you sleep, you’ll work until you die.”
The good news is that the world of cryptocurrencies offers a lot of opportunities to earn passive income. So why doesn’t everyone do this? Well, they probably don’t know how or they are skeptical. Admit it; even you were skeptical at first until you understood all the facts.
One of the ways to earn passive income is to lend what you own to others securely. In exchange for the loan, you will get funds or other benefits.
I hope this guide will help you have a better understanding of cryptocurrencies and how they work. At Coinzix Academy, you will find a wide variety of articles, from beginner guides to more advanced topic presentations.
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