You have probably read or heard about cryptocurrency, or its innovative trading tools such as zignaly copy trading, a topic on everyone’s radar and continues to make headlines. To many it may seem just like trading stock, so why is cryptocurrency rising in popularity?
Basically, cryptocurrency is a form of digital money. While it is also possible to digitally manage and transfer your traditional currency (such as the U.S. dollar), this is not the same as owning cryptocurrency. What makes cryptocurrencies different is that they are a decentralized and more democratic alternative to government-based money.
Why is Cryptocurrency rising in popularity? Why did Burritos or Bitcoin go viral?
Some people are reticent about the popularization of cryptocurrencies. Others, however, claim that they are the future of money and are meant to replace traditional centralized coins controlled by governments.
The Early Days of Cryptocurrency
The first experiments with cryptographic electronic money date from the 1980s and 1990s but never really developed. In 2008, the first cryptocurrency, Bitcoin, emerged as a way to take power away from government agencies and central banks.
Nobody knows exactly who started it; Bitcoin was created by the first blockchain, an anonymous entity called Satoshi Nakamoto.
Its first units cost very little. In 2010, when one of the first users decided to get rid of his Bitcoins, he exchanged 10,000 tokens for two pizzas. In comparison, at today’s values, 10,000 Bitcoins would be worth more than $450 million!
Without delay, cryptocurrency technology became more and more popular among those looking to try something outside of traditional trading and investing.
What is Cryptocurrency?
Before knowing how to invest in cryptocurrency, like Bitcoin, it’s important to understand the differences between this new format and traditional currency.
In centralized banking and economic systems, governments control the supply of money, printing more when necessary. On the other hand, cryptocurrencies are intangible money that only exists in digital form, such as tokens. There is a fixed number of each type of cryptocurrency, meaning companies or governments cannot produce more.
Today, cryptocurrency can be exchanged through platforms like Coinbase and used as traditional money to purchase physical things, not just investing/trading. Its decentralized nature guarantees the following advantages:
- Eliminate the Role of Banks– When transferring traditional money, the bank charges you fees as an intermediary. In the case of cryptocurrencies, the network members themselves in the blockchain act as an intermediary, and their compensation is minimal. In addition, anyone with a mobile phone can use crypto to make payments without the need to create a bank account (and pay the respective fees attached).
- Less Devaluation– Government central banks can print money in the event of economic crises, which can devalue the currency and generate side effects (such as inflation). Most cryptocurrencies come with a limited amount. When all available units are in circulation, there’s no central entity to create new ones.
- The Money is Really Yours– People hand over their traditional money to the control of banks and governments. In times of crisis, some governments had already frozen citizens’ bank accounts or confiscated their savings. In the case of cryptocurrencies, only you can access and use your money.
The Crypto Craze
After a few years of absolute reign, Bitcoin ceased to be the only existing cryptocurrency in 2011, when the first rival alternative currencies (such as Namecoin and Litecoin) began to appear. More sites started accepting crypto, including online gambling, which contributed to the increase in popularity of the format.
Celebrities like Elon Musk, Gwenyth Paltrow, and Bill Gates began to endorse the system, which became a good alternative for when loans are difficult to seek, such as during the pandemic. It also helps to balance your investment portfolio.
By January 2021, there were more than 4,000 different cryptocurrencies out there. Many of them still don’t have the same popularity as Bitcoin. With lower trading volume, they end up being acquired mainly by backers and investors.
The Future of Cryptocurrency
In 2013, a single Bitcoin was worth a thousand dollars, prompting many investors and speculators to look for cryptocurrencies. High demand caused the value to go down. Since then, the price has had many ups and downs, but in 2021 a Bitcoin cost almost $45,000.
While some endorse it as the future of finance, many are still critical of the impact mining crypto has on the environment. Some companies, like Tesla, have stopped accepting Bitcoin due to such concerns. But in general, many investors are excited by the opportunity to trade in a non-government regulated space.
Everything suggests that crypto could be a very lucrative investment for the future. Some experts even claim that Bitcoin could be worth $300,000 in the coming years.
The New Money?
For young professionals or investors, cryptocurrencies sound like the business of the future. Although many people tend to buy only a few units to keep, hoping for potential growth in the future, active investors are dedicated to buying and selling crypto, maximizing their profit and revenue.
However, it’s not smart to throw yourself into the cryptocurrency universe without a plan and strategy like any new business. Experts warn that, with a large number of cryptocurrency options available, some may disappear from the market in a few years and never pay back the investment.
PaydayMint might help you if you want money to invest in cryptocurrency.
But with good planning and strategy, who knows, you might be lucky to see your investment skyrocket, as happened with Bitcoin. Or, better yet, in just a few years, crypto will completely replace traditional money, and you will be one of the pioneers in this brave new world.
That is why cryptocurrency is rising in popularity.