Virtual currencies are all the rage nowadays, and more of these companies are popping up all the time. Whether you know very little about cryptocurrency or you’ve been buying it for years, there is still a lot you can learn before you rush out and buy bitcoin or one of the other types of virtual currency. After all, learning all you can about this type of currency is always recommended before buying any, and below are just a few of the things that you should know.
1. More Than 1300 Cryptocurrencies Currently Exist
Most people have heard of Bitcoin, but there are many other virtual currencies as well. Today, cryptocurrencies have a market cap of nearly $590 billion, and Bitcoin makes up 54% of that. Still, investors can choose from among 1300 cryptocurrencies right now, so even if you’re not interested in Bitcoin, you still have a lot of virtual currencies to choose from and you can always choose more than one if you like. In fact, investing in more than one is never a bad idea, just the same as how investing in other areas usually works best when you are diversified.
2. Decentralization Makes it Safer for Investors
When you’re learning about cryptocurrency so you can buy Bitcoin or some other type, you’ll hear the word “decentralization” a lot. What it means is this: when you buy or invest in virtual currency, there is no central hub where all of your information is stored as there is with other forms of currency. Because of this, your information is very secure, and while there’s no guarantee hackers won’t get to it, the chances are very slim that this will happen.
3. Cryptocurrencies Are Not Accepted Everywhere
Cryptocurrencies can be purchased and invested in almost anywhere in the world, but they are actually banned in some countries. Today, half a dozen countries currently ban any type of transactions made with virtual currency, and this includes Bolivia, Ecuador, Nepal, Morocco, Bangladesh, and Kyrgyzstan. Russia is toying with the idea of banning cryptocurrency, and this is something to keep in mind if you live in one of these countries or visit them regularly.
4. The IRS Expects Their Share of Your Cryptocurrency Profits
Just because cryptocurrency isn’t considered “real” money by some people doesn’t mean that you don’t have to pay taxes on any profit you might make when trading or investing in it. In fact, the IRS is taking notice of the cryptocurrency trend and is out to make sure that they get their fair share. This means that if you’re going to get involved in any type of cryptocurrency activity, you need to make sure that you pay taxes when you show a profit.
5. Blockchain Technology Is Where it’s at
In short, cryptocurrencies are founded on an infrastructure known as blockchain, which is a digital ledger, also decentralized, that records what is happening with cryptocurrency, including transactions such as payments and transfers. When you buy bitcoin because you want to trade it, you may think that the cryptocurrency itself is what is so valuable; in fact, it is blockchain technology that many of the experts are so excited about. This technology has lots of potential for the future, giving you yet another reason why investing in cryptocurrency is such a smart idea.
6. There Is a Finite Supply of Some Cryptocurrencies
Bitcoin is undoubtedly the most well-known type of cryptocurrency, and if you want to buy any of it, you’d better do so quickly. The “powers that be” have decided that only 21 million bitcoin will be allowed to be mined; so far, about 16.3 million bitcoin have been mined and are now being traded. In fact, in the year 2140, the last bitcoin will be mined, so getting on board quickly is something that you might want to consider.
7. If You Buy Bitcoin, Never Lose Your Private Key
Your crypto address should always be kept in a safe place because if you lose the private keys to your transactions, it usually means that you have lost all of your bitcoin. Roughly 25% of bitcoin have been lost so far, so it’s a smart idea to keep everything that you received when you bought your cryptocurrency. Never assume that what you got from the cryptocurrency company is unimportant because when you try to invest with it in the future, it might not be there.
8. You Can Even Place Bets with Cryptocurrency
A lot of people don’t know this, but placing bets with cryptocurrency is something that you can do now. This is a relatively new phenomenon, but institutional investors now have an easy way to bet on bitcoin and other cryptocurrencies ever since CBOE Global Markets introduced bitcoin futures trading in late 2017. One of the main advantages of this is the fact that investors can now wait until the price of cryptocurrency goes down before they invest in it. This means that it is even easier to make money off the investment at some point.
9. Pricing and Investing Is a Little More Stable Now
In the beginning, when you went to buy bitcoin or some other cryptocurrency, you had no idea what it was worth or how it might possibly do after you bought it, but now that has changed. Cryptocurrency has been around long enough that its value has been a little more predictable. Although cryptocurrency can go up or down, the truth is that more often than not, it grows in value over time. Because of this, people are more confident than ever before about buying into this market.
10. There Is a Lot of Information Out There About Cryptocurrency
If you’re new to cryptocurrency, do not worry because there is more accurate information on it than there has been in the past, and it becomes easier to learn about cryptocurrency with each passing year. When cryptocurrency first came on the scene, information was sparse and people were confused as to what data were facts and what were guesses or estimates. Today, information about cryptocurrency is all over the place, and as long as you’re getting your information from a reputable source, you can count on the details being right.