CarderPlanet
Professional
More than 5,000 types of cryptocurrency speaks of its popularity and benefits for investors. But despite such a diverse market, many have only a vague idea of Bitcoin and other coins.
In this article, we will dispel the fog and give a clear understanding of virtual currency.
This form of money does not fall under state guarantees due to the fact that no government in the world can influence the release and transfers of cryptocurrency between users.
In simple words, it is electronic money with protection against counterfeiting. The data that is encrypted in it cannot be duplicated and regulated from the outside.
The lack of state control makes investing in cryptocurrency quite a gamble: here you can both get rich and go bankrupt. For example, in December 2017, bitcoin doubled in price - they gave more than $ 18,000 per coin. But it lost half the value just a couple of months later. On July 15, 2019, it hit $ 10,893 and then lost 10% the next day.
We must not forget that cryptocurrency trading is a risky business and you can only do it if you cope with losses. It is very easy to lose all the money you have invested, which is a bit like a casino. This is simply explained when you consider one point.
When Bitcoin came along, the first cryptocurrency tied to the blockchain, Silicon Valley, China and New York were able to convince people with a bank account and the Internet that Bitcoin is the future of money. But do not forget that in 2008 it was created by Satoshi Nakamoto - a person who has not been identified to this day. Or a group of people, which is likely.
And today, looking at the distribution curve of bitcoins, it can be seen that more than 87% of mined coins belong to less than 1% of all addresses.
Having agreed, this group of people can, by ordinary transfer from one of their addresses to another, influence the rise or fall of the exchange rate. You cannot predict it, but you cannot win if your interests coincide in a random way at that moment. Or maybe there is no collusion ... Nobody knows for sure.
However, this is a gamble that attracts large investors, as bitcoin often shows changes in value of more than 30% per day. Such fluctuations are inherent only in cryptocurrencies.
Chris Larsen, Tyler and Cameron Winklevoss, Roger Ver are the people who became dollar billionaires on cryptocurrency. The list of millionaires is much longer.
The globality and financial support of bitcoin distinguishes it from all pyramids, it is a completely different type. In the long term, the biggest threat and consequences is not seen as regulatory or hackish, but rather a massive exodus of idealists and top and mid-tier players to an improved Bitcoin 2.0.
So far, no one has succeeded in calculating and penetrating into each copy, and the rest of the participants do not agree with changes in one block. This reduces the hacker's efforts to zero.
Blockchain allows cryptocurrency to be decentralized, which means that no single institution such as government, central bank or tax office can control it.
The blockchain is essentially a digital ledger. It can literally be thought of as a chain of virtual data blocks. Each block stores the date, time, amount, and information about who was part of the transaction.
To distinguish between blocks, each has an identifier known as a hash. And since any block in the chain easily contains a significant amount of information, it can contain several transactions.
Blockchain is the foundation of Bitcoin and other electronic coins.
Let's look at the example of buying morning coffee. However, cryptocurrency transactions are much more risky than espresso.
For bitcoin, this happens on a cryptocurrency exchange or when a transfer is made between wallets.
In cryptocurrency transactions, the decentralized computer network verifies the transaction between wallets. This process is completed by miners.
Mining is often portrayed only as a Bitcoin mining tool. In fact, it is more related to the blockchain. Crypto mining is the process of verifying several types of transactions on the blockchain and adding them to the digital ledger after passing tests such as encryption tasks.
The same need exists for blockchain transactions. Information about the amount, time of the transaction is recorded in the block. One block can store information about many transfers.
For a blockchain with a large number of virtual blocks covering each transaction, confirmation of all blocks is critical. Therefore, everyone is assigned a hash - a special identification code.
Each block has its own hash - it is placed on the blockchain, where all five steps that we just went through are recorded.
As you finish your latte, keep in mind that this is not a perfect analogy. The main risk in a cafe is to flip a cup of coffee, and cryptocurrency trading is a more complicated process.
It can take much longer if buyers or sellers are not available. And unlike coffee, cryptocurrency trading is extremely volatile, with spikes and drops in prices. This can result in the loss of all investment.
Here are some of the main benefits that crypto has to offer, now and in the future.
When you pay by credit card, there may be multiple intermediaries or third parties involved in the transaction. They ensure that the buyer is creditworthy and the seller can accept the transfer.
Cryptocurrency wallets eliminate these middlemen, which removes transaction fees. This advantage is often discussed in relation to international payments.
And yet, commissions may apply on some exchanges when making transactions with cryptocurrencies.
The risk is that since cryptography is a purely digital process, a system failure could destroy assets if no backup is available.
But it also means that there is no individual responsibility if something goes wrong.
As a result, the popular Bitcoin and other altcoins are used in many criminal transactions - tax evasion, money laundering, the default payment form for illegal businesses.
But unlike them, it can quickly and significantly change the price.
This is a liquidity challenge, meaning it can be more difficult to convert cryptocurrency into cash. Until the transaction is completed, the conversion benefit may disappear.
Unexpected disruptions and price fluctuations have ruined many crypto investors.
Crypto exchangers or wallets can be a weak link - some people have lost millions of dollars in stolen coins. True, it is difficult to say that this is a lack of technology. Most often, crooks play on human weaknesses.
Given these risks and concerns, cryptocurrency is not recommended as a storage medium for retirement savings, mortgage or emergency funds.
Despite the prominence and hype surrounding Bitcoin as a potential payment instrument in the future, it is currently not accepted as payment like fiat money.
Fiat currency is money that is issued and controlled by the government. The state establishes and guarantees its value regardless of the price of the material on which it is made.
Like other currencies, Bitcoin contains some key risks to keep in mind: significant price fluctuations during trading and the external risk of how it will be regulated. This is a new concept that governments around the world are trying to promote with the goal of consumer safety.
These are just a couple of risks, but it's important to keep them in mind whenever thinking about investing in cryptocurrencies.
Here are some notable examples of different types of cryptocurrencies that host tokens:
But how to choose from thousands of coin options for investment? Below are the Top 4 most promising proposals. It is based on current market cap, user interest, recent growth, number of transactions, and outlook.
Due to the growth of the e-commerce industry, every merchant understands that the more payment methods there are on the site, the higher the rate of payment conversion. For example, Interkassa offers more than 70 methods of accepting payments, including all kinds of bank cards, tap-and-go payments, payments in instant messengers, as well as a new generation payment method - cryptocurrency.
The demand for payment for services and goods with cryptocurrency is constantly growing, forcing merchants to add this method to their sites. Therefore, if your business involves large sales around the world, Interkassa with the function of accepting cryptocurrency in an online store hits the spot.
Contact our managers to learn more about the terms of cooperation and accepting cryptocurrency on your website. We work around the clock and are always happy to help!
In this article, we will dispel the fog and give a clear understanding of virtual currency.
What is cryptocurrency?
Cryptocurrency is the digital equivalent of value. It functions as a unit of account, exchange or accumulation, but does not have legal tender status.This form of money does not fall under state guarantees due to the fact that no government in the world can influence the release and transfers of cryptocurrency between users.
In simple words, it is electronic money with protection against counterfeiting. The data that is encrypted in it cannot be duplicated and regulated from the outside.
The lack of state control makes investing in cryptocurrency quite a gamble: here you can both get rich and go bankrupt. For example, in December 2017, bitcoin doubled in price - they gave more than $ 18,000 per coin. But it lost half the value just a couple of months later. On July 15, 2019, it hit $ 10,893 and then lost 10% the next day.
We must not forget that cryptocurrency trading is a risky business and you can only do it if you cope with losses. It is very easy to lose all the money you have invested, which is a bit like a casino. This is simply explained when you consider one point.
When Bitcoin came along, the first cryptocurrency tied to the blockchain, Silicon Valley, China and New York were able to convince people with a bank account and the Internet that Bitcoin is the future of money. But do not forget that in 2008 it was created by Satoshi Nakamoto - a person who has not been identified to this day. Or a group of people, which is likely.
And today, looking at the distribution curve of bitcoins, it can be seen that more than 87% of mined coins belong to less than 1% of all addresses.
Having agreed, this group of people can, by ordinary transfer from one of their addresses to another, influence the rise or fall of the exchange rate. You cannot predict it, but you cannot win if your interests coincide in a random way at that moment. Or maybe there is no collusion ... Nobody knows for sure.
However, this is a gamble that attracts large investors, as bitcoin often shows changes in value of more than 30% per day. Such fluctuations are inherent only in cryptocurrencies.
Chris Larsen, Tyler and Cameron Winklevoss, Roger Ver are the people who became dollar billionaires on cryptocurrency. The list of millionaires is much longer.
The globality and financial support of bitcoin distinguishes it from all pyramids, it is a completely different type. In the long term, the biggest threat and consequences is not seen as regulatory or hackish, but rather a massive exodus of idealists and top and mid-tier players to an improved Bitcoin 2.0.
What is blockchain?
Cryptocurrencies are blockchain based. It is a system that records transactions across a computer network. The chain of blocks with files and databases is stored on different computers with the same rights. That is, they do without a server, and the absence of a chief administrator makes the blockchain practically invulnerable to hacking.So far, no one has succeeded in calculating and penetrating into each copy, and the rest of the participants do not agree with changes in one block. This reduces the hacker's efforts to zero.
Blockchain allows cryptocurrency to be decentralized, which means that no single institution such as government, central bank or tax office can control it.
The blockchain is essentially a digital ledger. It can literally be thought of as a chain of virtual data blocks. Each block stores the date, time, amount, and information about who was part of the transaction.
To distinguish between blocks, each has an identifier known as a hash. And since any block in the chain easily contains a significant amount of information, it can contain several transactions.
Blockchain is the foundation of Bitcoin and other electronic coins.
How does a blockchain transaction take place
Selling or buying bitcoin takes place in 5 key stages, which write a new block to the blockchain.Let's look at the example of buying morning coffee. However, cryptocurrency transactions are much more risky than espresso.
Transaction
A customer walks up to the counter, identifies himself and places an order for a small almond milk latte. First step.For bitcoin, this happens on a cryptocurrency exchange or when a transfer is made between wallets.
Examination
The customer spends by credit card paying for latte. The information is transmitted from the company that issued the card to the payment processor of the cafe and confirms the legality of the transaction. When paying in cash, the cashier can check the banknote by touch or with a detector to make sure it is real.In cryptocurrency transactions, the decentralized computer network verifies the transaction between wallets. This process is completed by miners.
Mining is often portrayed only as a Bitcoin mining tool. In fact, it is more related to the blockchain. Crypto mining is the process of verifying several types of transactions on the blockchain and adding them to the digital ledger after passing tests such as encryption tasks.
Recording
The café should keep track of all the lattes they sell and the money they bring in. Therefore, they add them to the ledgers.The same need exists for blockchain transactions. Information about the amount, time of the transaction is recorded in the block. One block can store information about many transfers.
Identification
A café ledger will be useless if the records are kept in disarray. The store owner keeps them in a stack with clearly marked dates. Or they use a computer system, they receive a monthly financial report, neatly arranged on the shelves in a file.For a blockchain with a large number of virtual blocks covering each transaction, confirmation of all blocks is critical. Therefore, everyone is assigned a hash - a special identification code.
Storage
The cafe keeps monthly records in the back room or in a single computer file.Each block has its own hash - it is placed on the blockchain, where all five steps that we just went through are recorded.
As you finish your latte, keep in mind that this is not a perfect analogy. The main risk in a cafe is to flip a cup of coffee, and cryptocurrency trading is a more complicated process.
It can take much longer if buyers or sellers are not available. And unlike coffee, cryptocurrency trading is extremely volatile, with spikes and drops in prices. This can result in the loss of all investment.
Pros of cryptocurrency
Cryptocurrencies are interesting for their potential - they allow you to make transactions in a digital, fast and secure mode.Here are some of the main benefits that crypto has to offer, now and in the future.
Eliminates intermediaries
The key goal of cryptocurrency is to move items as smoothly as possible between the two groups.When you pay by credit card, there may be multiple intermediaries or third parties involved in the transaction. They ensure that the buyer is creditworthy and the seller can accept the transfer.
Cryptocurrency wallets eliminate these middlemen, which removes transaction fees. This advantage is often discussed in relation to international payments.
And yet, commissions may apply on some exchanges when making transactions with cryptocurrencies.
Security
Blockchain technology reliably protects user data. Each new transaction stores more data in more blocks.The risk is that since cryptography is a purely digital process, a system failure could destroy assets if no backup is available.
Decentralization
The absence of a central governing body for most cryptocurrencies makes it impossible to control transactions.But it also means that there is no individual responsibility if something goes wrong.
Cons of cryptocurrencies
Any trader, investor, fan or hater of virtual money should be aware of the negative sides of cryptocurrency.Breaking the law
Since all records are kept on the blockchain, cryptocurrency ownership can be made anonymous by adhering to certain rules.As a result, the popular Bitcoin and other altcoins are used in many criminal transactions - tax evasion, money laundering, the default payment form for illegal businesses.
Fluctuations in value
Prices are based on supply and demand. Cryptocurrencies can be traded in the same way as bonds or stocks.But unlike them, it can quickly and significantly change the price.
Liquidity
Trading cryptocurrency is not as easy as trading stocks. There may be few owners of a certain type of coin, the transaction may take a long time.This is a liquidity challenge, meaning it can be more difficult to convert cryptocurrency into cash. Until the transaction is completed, the conversion benefit may disappear.
Market manipulation
The trading process can be influenced by market manipulation - individuals or misinformation can suddenly add value.Unexpected disruptions and price fluctuations have ruined many crypto investors.
Hacks
Blockchain has proven to be secure. But scammers have other entry points.Crypto exchangers or wallets can be a weak link - some people have lost millions of dollars in stolen coins. True, it is difficult to say that this is a lack of technology. Most often, crooks play on human weaknesses.
Given these risks and concerns, cryptocurrency is not recommended as a storage medium for retirement savings, mortgage or emergency funds.
Varieties of cryptocurrency
Each of the existing coins falls into one of three main categories. There are altcoins, tokens and bitcoins.Bitcoin
BTC is the first blockchain-focused cryptocurrency. The domain was registered in 2008 by Satoshi Nakamoto, a mysterious personality and cult character in the crypto community.Despite the prominence and hype surrounding Bitcoin as a potential payment instrument in the future, it is currently not accepted as payment like fiat money.
Fiat currency is money that is issued and controlled by the government. The state establishes and guarantees its value regardless of the price of the material on which it is made.
Like other currencies, Bitcoin contains some key risks to keep in mind: significant price fluctuations during trading and the external risk of how it will be regulated. This is a new concept that governments around the world are trying to promote with the goal of consumer safety.
These are just a couple of risks, but it's important to keep them in mind whenever thinking about investing in cryptocurrencies.
Altcoins
The release of Bitcoin and its open source in 2008 paved the way for the creation of thousands of other cryptocurrencies. These new coins have been called "alternative coins" or "altcoins" because they are alternatives to bitcoins. Here are some examples of altcoins that have a large market cap:- Litecoin (LTC) . Created by an MIT alumnus in 2011, Litecoin was one of the first cryptocurrencies to emerge after Bitcoin. Litecoin is known for generating new blocks at a faster rate, which allows for faster transactions.
- Ethereum (ETH) is younger than Bitcoin or Litecoin. Ethereum was created in 2015, and is interesting in that it programs the blockchain and runs applications called DApps and smart contracts. They depend on a type of token unique to Ethereum called ether. Ether itself is a piece of code that acts as a currency required by application developers or investors. It is a digital payment required to “pay” to launch an application or program.
- Ripple (XRP) launched in 2012. Ripple is more of a network that makes immediate payments with minimal fees. Its purpose is to send money around the world. It is this ability that has made it especially relevant for banks wishing to settle international transactions. Unlike bitcoins, Ripple does not require mining, so it uses less processing power than some other altcoins.
Tokens
Unlike bitcoins and altcoins, tokens cannot exist on their own. They depend on the network of another cryptocurrency. This means that the tokens do not have their own blockchain, they are built on top of the existing blockchain.Here are some notable examples of different types of cryptocurrencies that host tokens:
- Ethereum. The Ethereum platform currently has the most tokens installed.
- Omni - Tether (USDT). Each block is supported by US dollars, at a rate of 1 to 1. It is especially interesting for services that cannot accept USD.
- NEO is often referred to as the Chinese rival to Ethereum as a platform for smart contracts and DApps. TRON. Leading platform for DApps.
- TRON has many deployed tokens, including BitTorrent Token (BTT), which can be used to speed up downloads over the BitTorrent file sharing protocol.
List of cryptocurrencies
As with stocks, you need to find an exchanger to trade cryptocurrency. Exchanges are trading platforms that connect sellers with buyers.But how to choose from thousands of coin options for investment? Below are the Top 4 most promising proposals. It is based on current market cap, user interest, recent growth, number of transactions, and outlook.
- Binance Coin (BNB). It is widely used on one of the most popular exchanges, Binance, and provides many privileges in the system. Currency can be used to pay for purchases, real estate, receive loans secured by BNB, and much more. The exchange team continues to expand the functionality of the coin, which makes investing in it a promising business.
- Ethereum (ETH). Since 2016, the coin has grown in value 1,500 times, thanks to the ability to launch smart contracts. The team plans to transfer Ethereum to the PoS algorithm, which will be able to increase the speed of transactions per second and will make it possible to store cryptocurrency.
- Tron (TRX). Already now it works according to the DpoS (Delegated Proof of Stake) algorithm, which gives an advantage in the number of transactions in comparison with the same Ethereum. The ambitions of its founder, Justin Sun, give reason to believe that the exchange rate will rise.
- Litecoin (LTC). Developed as an improved version of Bitcoin. The result is something different: the issue of coins is four times more than that of bitcoin, but transactions and simplified mining are cheaper and faster.
How to accept cryptocurrency as payment on the site?
As the whole world is moving by leaps and bounds into the digital space, shopping is no different from this trend. The shopper has long given his heart to fast online shopping and instant contactless payments.Due to the growth of the e-commerce industry, every merchant understands that the more payment methods there are on the site, the higher the rate of payment conversion. For example, Interkassa offers more than 70 methods of accepting payments, including all kinds of bank cards, tap-and-go payments, payments in instant messengers, as well as a new generation payment method - cryptocurrency.
The demand for payment for services and goods with cryptocurrency is constantly growing, forcing merchants to add this method to their sites. Therefore, if your business involves large sales around the world, Interkassa with the function of accepting cryptocurrency in an online store hits the spot.
Contact our managers to learn more about the terms of cooperation and accepting cryptocurrency on your website. We work around the clock and are always happy to help!
