Categories Cryptocurrency

How Does Cryptocurrency Work? Everything You Need to Know

How does cryptocurrency work? This is a big question that dominates most cryptocurrency platforms online. The answers to this question are often diverse because the crypto experts who answer it tend to do so from their standpoint.

In this article, we are going to simplify things for you and answer this question in the best way possible. Other things that we are going to look at include the principles of cryptocurrency, the process of cryptocurrency, and more!

But First…

To understand what are cryptocurrencies and how they work, you need to know that you don’t have to understand crypto to use it, the same way you don’t need to understand the monetary system to use a debit card.

Nonetheless, if you want to learn and understand cryptocurrency (of course you do because you are here), you must understand the concepts of the blockchain (both as a technology and a public ledger for transactions), digital currency, and cryptography.

This is the information you are going to find in the sections below.

What Is Cryptocurrency In Simple Terms?

Cryptocurrency is basically a digital currency that only exists online. It is transferred between peers, and there is no middleman involved, such as a bank or any other financial institution. All crypto transactions are recorded on a digital public ledger known as a blockchain.

The ledger and the transaction data are encrypted using cryptography, hence the name ‘cryptocurrency.’

Cryptocurrency is decentralized, and this means that it is controlled by users of a network and computer algorithms and not a central authority such as a central bank. It is also distributed – meaning the blockchain is hosted on multiple computers across the world.

Digital currencies are traded on online crypto exchanges. There are many cryptocurrency exchanges available today. While this might sound like good news, you need to remember that all exchanges are not created equal.

There are many that are created to defraud unsuspecting investors; hence you need to be careful when choosing the exchange you want to trade your assets in.

Experts recommend reliable exchanges, which also double as wallets such as Tezro, thanks to their unrivaled security, ease of use, and reputation.

Some of the major cryptocurrencies include Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP).

How Are Cryptocurrencies Created?

The easiest way to explain cryptocurrency is to expound on how it is created in the first place. There are two main ways of creating crypto:

  • Build a blockchain: This must have its own coin.
  • Use Ethereum, Neo, or a similar platform to develop an application. This must-have its own token.

Coins and tokens are all cryptocurrencies. However, a token is built on an existing blockchain while a token belongs to its own blockchain. This means that there can be thousands of tokens built on a single blockchain, but there can only be one coin in a blockchain.

If you are interested in creating cryptocurrencies, deciding whether you need, a token or coin is a big decision. It determines lots of things, including the amount of time, energy, and resources you need to use.

Coins (especially those used as money) are created through a process known as mining. This process requires coding knowledge as well as expensive hardware.

On the other hand, tokens are created on an existing blockchain; hence you don’t need to solve complex math problems through mining.

Creating tokens is less costly in terms of time and money since developers utilize implemented consensus mechanisms and existing decentralized architecture.

Read more here to learn more about the history of cryptocurrencies.

Credits: BitDegree

What Are Some Popular Solutions For Creating A Cryptocurrency?

As a beginner, you might be interested in knowing some of the most popular blockchains that allow you to create a token.

Some of the reputable and secure alternatives you can try include:

Ethereum

This was the first service to provide token creation service. It offers an exceptional level of trust thanks to its maturity and strong position in the crypto market.

Tokens built on Ethereum use documentation known as ERC-20. It is well-written and organized; thus, it makes token development much easier.

Read more about Ethereum here.

NEO

NEO blockchain aims at the smart economy and uses what is known as the NEP-5 standard.

Through this blockchain, you can use any high-level programming language, including Java, Kotlin, Python, and C#, to develop your own token.

EOS

EOS blockchain uses EOSIO. Token standard. Tokens can be created using C++ or any other programming language that compiles with WebAssembly.

What makes this blockchain standout is that it provides outstanding scalability, a huge number of transactions per second, as well as cost efficiency since it doesn’t have a transaction fee.

Note: There is a myriad of blockchains that can be used as underlying networks for creating new tokens. Nonetheless, you need to have the in-depth programming knowledge to use them.

Even though you can use the available “make your own crypto” tutorials available online to create your own cryptocurrency, you must remember that only professionals can identify the best stack of technologies and complete a development process in record time.

Therefore, invest in gaining knowledge and expertise, and work with other like-minded professionals for desirable results.

How Does Blockchain Work?

How do cryptocurrencies work for dummies? When you look up this question in most platforms and communities, you will notice that most answers lean towards making crypto newbies understand how the blockchain network works.

What Is A Blockchain?

In simple terms, a blockchain is a type of database. However, unlike typical databases that structure data in tables, a blockchain collects large amounts of information in groups known as blocks.

Blocks have particular storage capacities, and when full, they are chained onto the previously created block, therefore forming a chain of data referred to as “blockchain.”

A blockchain is a decentralized, distributed public electronic ledger built on a peer-to-peer system that can be shared openly among users to create an unchangeable record of transactions that are time-stamped and linked to previous ones.

A blockchain network can only be updated through consensus among participants. Once data is added, it cannot be deleted. It operates on a write-once, append-many technology – and makes all transaction records auditable and verifiable.

How It Works?

A blockchain is used to allow people – especially people who don’t know or trust each other to share valuable data in a tamperproof and secure manner. Blockchain has three primary concepts:

Blocks

Every chain has multiple blocks, with each block consisting of three elements:

  • The data within the block
  • 32-bit whole number known as a nonce. The nonce is generated randomly once a block is created. This generates the next element.
  • Hash
  • This is a 256-bit number that is wedded to the nonce. It must be extremely small and start with a huge number of zeros.

Once the first block of a chain is developed, a nonce generates a cryptographic hash. The data in a block is considered signed and remains tied to the nonce and hash until it is mined.

Miners

Miners are developers who create new blocks on a blockchain through a process known as mining.

They use special software to solve complex math problems to find the nonce which generates an accepted hash.

Nodes

One of the things that make blockchain technology unique is decentralization. No computer or organization owns a blockchain. Instead, a blockchain is a distributed public ledger through nodes connected to the chain.

Nodes can be any type of electronic device which keeps the network functioning and maintains copies of the blockchain.

All nodes have their own copies of the blockchain. The network must algorithmically approve newly mined blocks for the chain to be updated, verified, and trusted.

Blockchains are transparent, and every action in the ledger can be viewed and checked with ease. Every participant in the network has a unique alphanumeric identification number that displays their transactions.

By combining a system of checks and balances with public information, the blockchain is able to maintain integrity and create trust among users. By judging how they work, blockchains can be hailed as the scalability of trust through technology.

Cryptocurrency Mining

People who run software and hardware aimed at confirming transactions to the digital ledger are known as cryptocurrency miners.

Cryptocurrency mining is solving cryptographic puzzles through software to add and verify transactions to the ledger in the hope of being rewarded with coins.

Mining ASIC rig to mine cryptocurrency

The Ledger

Another thing that helps newbies understand how cryptocurrency works is by understanding the cryptocurrency public ledger.

The ledger used in blockchain networks was derived from the age-record keeping system that was used to record information such as news, commodity prices, and analysis.

The public ledger was made available for everybody to see and verify. When the cryptocurrency blockchain systems were introduced, they were built on a similar record-keeping mechanism.

In the world of cryptocurrency, a ledger is used as a record-keeping system that maintains participants’ data in a secure and pseudo-anonymous form. This data includes their crypto balances and a history of their transactions.

Credits: preshing.com

Verifying transaction details through a ledger

The transaction details in banks are often queried and verified by the parties involved in a transaction.

Bank records are only accessible by designated bank officials and other concerned parties, including tax authorities or governments, on a need basis. No one else is allowed to have access to this data.

The ledger works in the same manner, but it is slightly different. Just like bank records, transactions can be queried and verified by parties involved in a transaction.

Nonetheless, no one, including tax authorities and governments, can know the real identity of the people behind the transactions.

Since no central authority controls the ledger, fairness is regulated in a unique way. Recording and storage of confirmed transactions begin at the creation and start of a digital currency.

When a block is filled with transaction details, a new one is mined and added to the blockchain by miners.

How long Bitcoin transactions take? Find out here.

Is there any risk involved?

Several network participants, popularly known as full nodes, maintain a copy of the entire ledger on their devices, which are connected to the crypto network.

Since hundreds of thousands of participants have a copy of the whole ledger, they understand the state of the network in terms of who holds crypto tokens or coins, how much they hold, and whether the transactions they carry out are authentic. This prevents the risk of double-spending.

The ledger has several intrinsic features such as encryption, reward mechanisms, and consensus algorithms that ensure participants that the identities and privacy of participants are protected and only genuine transactions take place on the network.

The ledger is an information storage container that forms the backbone of crypto by storing huge chunks of data after verification. Even though its use has been adopted across the globe, it doesn’t come without its fair share of challenges.

You need to remember that even though no one can determine who you are by looking at your public key, traceability is not an impossibility in the world of cryptocurrency.

To remain safe in the blockchain network, make sure you invest in a good VPN that can hide your IP and use secure wallets such as Tezro. Find out more about Tezro’s app features here.

Get the Tezro App

TEZRO is an all-in-one application for secure instant messaging and crypto payments, there is no need to have multiple chat applications or crypto wallets ever again. Your communication and finances are secure and encrypted under TEZRO. Try it now!

Cryptocurrency Transactions

A cryptocurrency transaction is the transfer of coins between two digital wallets. Once you initiate a transaction, it is submitted to the public ledger and recorded awaiting confirmation. Credible wallets such as Tezro use an encrypted electronic signature when a transaction is initiated.

This encrypted signature is known as the cryptographic signature and offers mathematical proof that the transaction was made by the owner of a wallet.

The confirmations wait for some time (10 minutes for Bitcoin) until mining is complete. Once a transaction is confirmed, it is added to the public ledger.

Types of Cryptocurrencies

There are different types of cryptocurrencies. They include:

Payment Cryptocurrencies

These are digital monies that are operated by a distributed network of computers that run on shared blockchain software. Some focus on payments for a particular use while others try to compete with fiat money.

They include Bitcoin (BTC), Bitcoin Cash (BCH), Dash (DASH), Dogecoin (DOGE), Ripple (XRP), Tether (USDT), Zcash (ZEC), Nano (NANO), Litecoin (LTC), and Dai (DAI).

Infrastructure Cryptocurrencies

These are cryptocurrencies that are used to pay computers responsible for running programs and apps on a shared blockchain network.

They include Cosmos (ATOM), EOSIO (EOS), Ethereum (ETH), Ethereum Classic (ETC), Icon (ICX), Lisk (LSK), Tezos (XTZ), and more.

Financial Cryptocurrencies

These are cryptocurrencies that help their users exchange or manage other crypto assets.

They include Curve (CRV), Kava (KAVA), Melon (MLN), and more.

Service Cryptocurrencies

These are cryptocurrencies that offer tools for managing enterprise or personal data on a blockchain.

They help blockchain-based financial products to access and vet external information sources. They include Siacoin (SC), Storj (STORJ), and Orchid (OXT).

Media & Entertainment Cryptocurrencies

These are cryptos that reward users for content, social media, games, gambling, and more. The most renowned media and entertainment cryptocurrency is the Basic Attention Token (BAT).

Key Takeaways


  • Cryptocurrencies can be created through mining or using already existing blockchains such as NEO and Ethereum.
  • A blockchain network can only be updated through consensus among participants.
  • There are different types of cryptocurrencies, including Payment Cryptocurrencies, Infrastructure Cryptocurrencies, Financial Cryptocurrencies, Service cryptocurrencies.



Conclusion

If you are asked, “how does cryptocurrency work?” you will definitely give a detailed answer based on the information provided above. Understanding how cryptocurrency works is not easy.

All you need is the zeal to learn. Re-read this post, watch informational YouTube videos, and utilize any other resources you come across until you eventually understand it.

Maybe something worth mentioning is that you don’t need to learn the technicalities of how cryptocurrency works to use it. Simply get the basics outlined above, and you are good to go!

Remember to download Tezro app, which will keep your crypto assets safe and where you can trade many different cryptocurrencies.

Categories Cryptocurrency

The History of Cryptocurrency: How it All Began?

The history of cryptocurrency is an interesting one. There are people who believe that the idea of cryptocurrency was first introduced in 2009 when Bitcoin came to be.

However, there are those who believe that the idea of having a decentralized currency started way beyond 2009, and they are right!

Prior to the creation of Bitcoin, there were numerous attempts at creating cryptocurrencies.

The reason why most, if not all, didn’t succeed was mainly because of double-spending. A digital asset needs to be used only once to prevent copying and counterfeiting.

With these in mind, you might need answers to questions such as: what was the first decentralized currency? How old is crypto? When did crypto start? Was Bitcoin really the first cryptocurrency? What year did cryptocurrency start?

When was decentralized cryptocurrency created? What is the concept of cryptocurrency? Was 2009 the beginning of cryptocurrency? Well, to get the ultimate answers to these questions, read on!

How Is Cryptocurrency Made?

To understand the history of cryptocurrency, it is critical to know how it is made in the first place. Basically, cryptocurrency is created by code. In most cases, new coins are created when transactions are verified and confirmed through a process known as mining.

However, while major coins such as Bitcoin and Ethereum are created through mining, not all coins are created through this complex process. How exactly a coin is created largely depends on what is defined by a given cryptocurrency code.

For instance, some cryptos put out tokens as dividends within a particular period of time or create some tokens upon launch as developer rewards.

In order to comprehend the crypto background and how it is made, there are few points you need to consider.

Credits: BlockGeeks.com

Cryptocurrency is software

All functions, including how data is stored and how transactions are recorded, are dictated by code.

Blockchain is the main technology behind cryptocurrency transactions

This is especially true for those cryptos that are used as money. Other cryptocurrencies use other unique technologies, but the gist is not different!

Cryptos are created by an algorithm that relies on cryptography

This is the main reason why it is called ‘cryptocurrency.’ All transactions relate back to a unique set of cryptographic codes that make the network insanely secure.

Cryptocurrency software is decentralized and distributed

This simply means that the software is hosted on multiple PCs across the globe instead of a server controlled by a central authority.

Crypto algorithms are created to reward coins to those who add transactions to the blockchain

Those who add coins to the network, popularly known as miners, are rewarded with coins once they confirm transactions on the network.

Another thing worth mentioning is that most cryptocurrencies, especially those used as money, are created by people across timelines running hardware that add transactions to the blockchain network.

Or newer cryptos that use unique technology, tokens are developed by a host of mechanisms based on a cryptocurrency’s software. Also, the code for almost all decentralized digital currencies is public, meaning anyone, including you, can check how coins and tokens are created.

Note: Since the inflation and supply of a cryptocurrency are defined by code, people within a network know upfront whether the coin is inflationary or deflationary.

The only way this can be changed is by changing the software. To do this, a majority of computers running a particular crypto’s software have to agree on the upgrade. In many cases, a change in the rate of supply or inflation would result in a ‘fork,’ which is a newer version of the software.

However, it is highly unlikely the supply of issuance of major cryptocurrencies such as Bitcoin will ever be changed. This gives investors and crypto enthusiasts that this cryptocurrency will remain scarce and will never lose its value.

Credits: HackerNoon

 When Did Cryptocurrency Start?

As mentioned earlier, cryptocurrency has a rich and interesting history. In the 1980s, many innovators and developers had the idea of creating a currency that would exist in the digital realm.

These people didn’t get far with their innovations, but they are highly regarded as the individuals who planted the seed for the future and set the pace for those who created digital currencies as we know them today.

These ideas were taken up by the innovators and developers of the 1990s. In 1998, about 10 years before the introduction of Bitcoin, a computer engineer known as Wei Dai published a paper where he discussed what he called “B-Money.” he discussed in depth the idea of digital money, which could be sent easily along with a group of untraceable digital pseudonyms.

In the same year, blockchain pioneer Nick Szabo drafted another attempt. He looked into developing a decentralized digital currency. His idea was inspired by inefficiencies within the conventional money system, such as reducing the amount of trust required to do a transaction and eliminating the need for metals to create coins.

The early innovators wanted to come up with anonymous payment systems that would be verified and confirmed over a widespread network through a cryptographic process. For some reason, however, none of them gained popularity as a piece of writing that was issued in 2008.

Credits: Medium.com

Introduction of the First Cryptocurrency

In 2008, an anonymous person (or people) named Satoshi Nakamoto wrote a technical whitepaper explaining a science project. The paper was titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” during this time, another person registered the domain bitcoin.org.

Nakamoto then published software that allowed Bitcoin to be mined for the first time. On January 3, 2009, 30,000 lines of code spell out the beginning of the biggest cryptocurrency we know today – Bitcoin.

What is a Bitcoin? Read more here.

Why Did Satoshi Nakamoto Create Bitcoin?

In his/their whitepaper, Nakamoto expressed his dissatisfaction that banks and central banks had repeatedly breached the trust of those who deposit money with them by lending money in credit bubbles while keeping too little as a reserve.

Most economy experts believe that Satoshi created Bitcoin to fix the economic meltdown in 2008.

What is a Satoshi and how many Satoshis are in a Bitcoin?

Who Is Satoshi Nakamoto?

The identity of Satoshi Nakamoto remains a closely-guarded secret. Over the years, there have been efforts to uncover who this person is.

Some crypto experts suggest that this is a pen name representing a group of developers.

A man named Dorian Nakamoto was credited by Newsweek as being the Bitcoin creator, but he has later denied that claiming he has “nothing to do with it”.

Dorian Nakamoto, who Newsweek had claimed to be the founder of Bitcoin. Dorian has denied it.

Get the Tezro App

TEZRO is an all-in-one application for secure instant messaging and crypto payments, there is no need to have multiple chat applications or crypto wallets ever again. Your communication and finances are secure and encrypted under TEZRO. Try it now!

The Start of Bitcoin

A few months after floating the idea of Bitcoin, Satoshi created 50 BTC with the first transaction on the blockchain on January 3, 2009, at 18:15:05 hours. The system is made such that these initial coins cannot be used or spent.

This initial transaction had an embedded message and a timestamp that indicated Nakamoto’s intention to make BTC live. This message read, “The Times 03/Jan/2009 Chancellor on brink second bailout or banks.”

This message was a reference to a headline of a news article that appeared on that day in The Times in the UK that discussed a second bailout for banks.

Bitcoin began to attract some attention in different online communities, and it began throwing financial institutions out of the picture. It was a peer-to-peer method of payment among parties and operated over a decentralized network – something that had never been seen before.

BTC also redefined the cryptographic process that had been in place in earlier digital currency attempts and made it a reality.

In this revolutionary invention, a network of computers worked together at verifying transactions made between parties. This process eliminated cases of double-spend that were rampant in early attempts.

Read more: How many Bitcoins are there in the world right now?

Credits: Image from the web animated series Bitcoin & Friends

Bitcoin’s Transactions and Development

We cannot talk about the history of cryptocurrency and fail to mention the first Bitcoin transaction.

According to multiple reports, the first BTC transaction took place when someone paid another 10,000 BTC for pizza. During this time, the coins had no value. In no time, this cryptocurrency started to gain value and occasionally lost it due to the principle of supply and demand.

Considering that Nakamoto had capped the coins’ supply in his paper, their demand would have an impact on the value in a volatile way.

Bitcoin has remained the most sought-after and lucrative digital currency since the publication of the white paper in 2008. Nonetheless, the road to this coin’s success has been bumpy, and in many ways, BTC still has a long way to go to become a viable payment system.

The Rise of ICOs

If you have a background in cryptocurrency, you have probably heard about ICO. ICOs (Initial Coin Offerings), also known as token sales, are a form of crowdfunding for launching new companies and development projects.

Here, developers and entrepreneurs reach out to investors and institutions interested in funding the project. 

Investors pony up Bitcoin, Ether, and any other cryptocurrency. In return, they receive digital tokens.

The money raised is used to fund the development of a new blockchain project such as a cryptocurrency exchange or cloud storage.

Or the most part, ICOs are unregulated. They are increasingly used by startups as a way of circumventing the well-laid-out capital-raising processes required by banks and venture capitalists.

The increased reliance on ICOs is causing concern around the world. The Securities and Exchange Commission in the US argues that some questions surrounding ICOs remain unanswered, including whether or not ICOs should be considered securities.

In 2017, this commission published a report stating that some digital tokens can be regarded as securities and would be subject to particular investor registration and disclosure requirements.

Why ICOs were subject to criticism?

Most ICOs lack investor protection, and this is a major cause of concern. Some jurisdictions around the world have moved ahead to label ICOs as scams. For instance, in 2017, the People’s Bank of China denounced ICOs and referred to them as “Illegal fundraising.”

They were consequently banned, and this caused the value of BTC and other major cryptocurrencies to fall. The European Securities and Markets Authority described ICO as a “very risky and highly speculative investment.”

South Korea has also placed a ban on ICOs, with other countries expected to follow suit in the coming years.

The criticism of ICOs doesn’t mean that they are evil. In fact, in 2017 alone, proceeds from ICO exceeded $5 billion, with the top 10 largest projects raising 25% of this amount. Additionally, tokens bought in ICOs gave an ROI of 12.8 times on the initial investment in dollar terms.

We cannot shun away from the fact that ICOs are rife with scam and fraud artists who target poorly informed and overzealous investors. But this doesn’t mean it’s an evil thing.

As long as ICO issuers undergo increased scrutiny and meet higher regulatory standards, ICO will go a long way in shaping the future of BTC and other cryptocurrencies.

2017 – Bitcoin Reaches $10,000

In 2017, the prices of cryptocurrency shocked the world. For the first time ever, Bitcoin hit its all-time high of $10,000! This was spurred by the increased public awareness of its amazing benefits as well as its overall popularity.

Many investors rushed to buy this crypto even though many of them didn’t know what it was all about.

This upsurge in BTC price came with a lot of backlashes. Regulatory authorities started coming up with laws, and governments started monitoring the coins. What followed was a major crash, and Bitcoin’s price dropped considerably.

However, it regained its value in no time. Today, one Bitcoin is equal to $30,000, and this means that Bitcoin is the undisputed leader in the cryptocurrency world.

What is the future of Bitcoin? We anticipate it for you.

Credits: Statista

 

Key Takeaways

  • The idea of cryptocurrencies was born in the 1980s, but the early innovators did not go far because of issues such as double-spending.
  • Bitcoin originated in 2008, and the first transaction took place in 2009.
  • The identity of the person/people behind Bitcoin is not known.
  • Cryptocurrencies exist online, and there is no physical form of Bitcoin or any other digital currency.

 

Conclusion

The history of cryptocurrency is an interesting one. The dream of decentralized digital currency was born in the 1980s but was only realized in 2009. The creation of Bitcoin led to the development of thousands of other cryptocurrencies that we know today.

Thanks to their ever-increasing value and mass adoption, there is no doubt that cryptocurrency is the future of the financial ecosystem. Of course, this might sound like a hasty judgment considering that they have been in existence for only one decade.

However, the entrance of giant companies like PayPal and Facebook into the crypto space and the introduction of Central Bank Digital Currency (CBDC) gives us an idea of where cryptocurrency is headed going forward.

No matter what the future holds for cryptocurrency, one thing is for sure: you can trust Tezro app for your crypto exchanges and for a fully safe and encrypted environment. Download it now!

Categories Cryptocurrency

What is the Future of Cryptocurrency & Bitcoin?

When you enquire about the future of cryptocurrency, you will get varied answers depending on who you enquire from.

Some analysts are confident that this revolutionary currency has a stable role in the future, while others are concerned about its risks.

With Bitcoin surpassing all expectations and approaching its all-time high in mid-November 2020 despite the COVID-19 pandemic, crypto optimists have a reason to believe that digital currency has great potential and might change the way we view the financial industry.

Since December 2020, Bitcoin has more than doubled its value, and this impressive growth could be the begging of a long, bullish run.

 

Understanding Bitcoin

Before we dig deeper into the future of Bitcoin, it is critical for novices to learn a few things about this hyped cryptocurrency.

Bitcoin is a decentralized currency that utilizes peer-to-peer technology that enables all functions such as transaction processing and verification as well as currency issuance to be done collectively by the network. Bitcoins are created digitally through a process known as mining.

This is a process that requires powerful computers to crunch numbers and solve complex algorithms, even though this process has been simplified thanks to the rise of cloud mining. Currently, Bitcoins are created at a rate of 25 Bitcoins per minute. This crypto is very scarce and is capped at 21 million.

What is a Bitcoin? Read more here.

 

 

The future of cryptocurrency in 2021 and beyond

2020 has been a tumultuous year, to say the least. However, the cryptocurrency sector has continued to grow against that backdrop. Through the year, we have seen increased regulatory attention, wider adoption of BTC as a form of exchange, and broader use of blockchain technology across different sectors.

After an up-and-down 2020, we are now in the New Year, and there is some good news as far as the future of cryptocurrency is concerned. Bitcoin hit $30k on January First, and its value is expected to rise significantly in the coming months.

Bitcoin’s hold up future is bright, and this crypto has become too big to be overlooked by the financial public. Suddenly, people all over the world are talking about the mainstream adoption of BTC and other cryptocurrencies by larger entities at higher price points.

Read more about how many Bitcoins are there in the world right now.

 

Below are a few predictions for BTC in 2021 and beyond:

 

Bitcoin Will Close 2021 Above $30,000

Given the run-up that occurred at the end of last year, it can confidently be stated that Bitcoin will close 2021 above $30k.

This might sound like a conservative prediction given that prices don’t always go up, but thanks to the institutional fund flows and interest, it seems this upward trajectory has some support.

 

Tax Enforcement Will Scale

The mass mainstream adoption of BTC in 2021 and beyond means that tax enforcement will scale. In the US, the IRS made various moves in 2020, which indicated the seriousness with which cryptocurrency tax enforcement will be handled going forward.

With the rump of cryptocurrency prices, expect governments across the globe to take a fresh look at this lucrative potential revenue and create more stringent tax rules.

 

Bitcoin Will Be Acknowledged As an International Payment Currency

PayPal, the biggest debit payment system, has joined the cryptocurrency market. According to a statement, PayPal says that beginning January 2021, it will allow its users to use cryptocurrency to make payments worldwide without incremental fees.

To address the high volatility associated with cryptocurrency, consumers will be allowed to convert their crypto balance into fiat currency. With over 340 million PayPal users across the globe, it is clear that the mass adoption of bitcoin and other cryptocurrencies is finally here, and this is good news for the crypto future!

 

 

Bitcoin Will Serve As a Hedge Against Inflation and Take Up Gold’s Market Share

Crypto experts consider BTC a digital alternative to gold, which has been a popular hedge asset for decades. Reports show that by October last year, investment in bitcoin increased exponentially while investments in gold ETF remained almost unchanged.

Today, there is a massive inflow into Bitcoin out of gold, and this trend is expected to continue throughout 2021, according to expert predictions.

In 2021 and beyond, the rise of the crypto market will come at the expense of gold. This sounds natural considering that BTC is a more technologically advanced inflation hedge, while Fiat currency will continue suffering from the consequences of the COVID-19 pandemic.

 

Credits: Capital.com

 

Blockchain Will Expand Beyond Financial Services

In 2021, BTC’s blockchain may expand beyond financial services. This year will continue with the breakout of trends for crypto assets and blockchain technology in different industries.

Apart from financial services, some of the industries that are expected to benefit include transportation, logistics, education, healthcare, and more.

 

Cryptocurrencies vs. Coronavirus

The beginning of March 2020 was disastrous for major global markets. When COVID-19 was declared a pandemic, the stock market experienced its fastest and most dramatic fall since 1929. The tourism and hospitality sectors were hit the hardest, and countries across the globe implemented lockdown policies and travel restrictions.

The uncertainty and panic brought by the pandemic led to a liquidity crisis even before an economic crisis set in. Investors hurriedly converted their holdings into cash in a bid to safeguard their finances.

While all this was happening, one of the overarching questions most crypto enthusiasts ask is – did the coronavirus pandemic affect the cryptocurrency market?

Unfortunately, the cryptocurrency market was not spared either. This pandemic put the future of digital currency at stake, with Bitcoin‘s price falling by half. This major cryptocurrency fell to as low as $3,780 in March. However, this downward trend didn’t last for long. By November 2020, BTC rebounded and almost hit its all-time high.

This quick recovery is a clear testimony of BTC‘s market resilience. This admirable characteristic of digital currency has prompted countries known or their love-hate relationship with cryptos, such as China, to declare it the best asset of 2020 thanks to its stellar performance amidst financial turmoil.

 

 

Coronavirus and the Heightened Need for Digital Financial Services

Since March, when news of the coronavirus pandemic hit the airwaves, cryptocurrency started gaining a reputation as a safe haven investment, much like Gold, Platinum, and other valuable metals.

However, this is not the only reason why investors should spice up their investment portfolio with altcoins and Bitcoin. The shock of this pandemic has promoted businesses across the world to accelerate their digital infrastructure that includes tech-enabled financial solutions. Digital currencies have stepped up to fill this need.

Financial institutions are now racing to roll out crypto-based solutions that include withdrawals, payment transfers, and deposits through digital wallets.

Experts also believe that the pandemic has prompted PayPal and other dominant payment gateways to announce support for cryptos that can enable their customers to buy, sell, and hold valuable digital assets.

This is a clear display that shows why the cryptocurrency is the future and a reliable solution to society‘s ever-evolving demands.

 

 

Should I Invest In Bitcoin Now?

What is the future of Bitcoin? The reason why most potential crypto investors ask this question is that they want to find out whether investing in Bitcoin is worth it.

Factually, there are many reasons why you need to invest in Bitcoin as soon as now.

 

Prices Will Keep Growing

One of the biggest benefits of investing in Bitcoin is that its prices will keep growing. Of course, this is a volatile currency, and its value is prone to highs and lows. But with more people than ever using it as a primary currency, its price will keep increasing.

Today, businesses and individuals have realized that BTC and other cryptocurrencies are the ultimate solutions to their problems.

The more people love BTC, the higher the price will shoot in the market. Investing in Bitcoin might not guarantee profits, but you can rest assured you will enjoy them in no time.

 

Bitcoin Adoption Is Growing At An Alarming Rate!

Global adoption of Bitcoin is growing at insane rates. The number of people holding BTC in their wallets and those buying it through various exchanges keeps growing every day.

If the demand continues to grow, there is no doubt that this will result in more explosive price movements in 2021 and beyond.

 

Credits: Capital.com

 

BTC Value Proposition Is Suited To the Macro Climate

BTC was born out of a global financial crisis in 2009. It was deployed against a backdrop of back failures, quantitative easing, and government bailouts. It was ignored by many except a few idealists.

Ten years later, we are experiencing a new and unexpected financial crisis with more bailouts, increased quantitative easing, and historically low-interest rates.

COVID-19 is a one-of-a-kind virus that has made companies and individuals realize where BTC and other cryptocurrencies sit in this macro environment.

The world has known that Satoshi Nakamoto created Bitcoin as a possible solution to a financial crisis.

Since BTC‘s protocol has a hardcoded limit of 21 million coins, it creates a unique digital scarcity. When the demand rises, miners cannot increase the supply. The supply can only come from holders who are willing to sell. Bitcoin is, therefore, a valuable asset to own!

 

 

Bitcoin Always Surpass Its Previous All-Time High after a Crash and Recovery

When we talk about the future of cryptocurrency, we cannot forget to mention that there is a likelihood that Bitcoin will surpass its all-time high after a price crash and recover. This fact holds true if historical data is anything to go by. BTC has seen various peaks and troughs over the past 10 years.

It has been reported “dead “over 383 times by the mainstream media. Nonetheless, it has somehow managed to surpass its all-time highs, so there is absolutely no reason to believe that the same scenario will not take place again.

In 2011, Bitcoin‘s price hit $30 on Mt.Gox, which was the most popular exchange at that time. A hack followed, and the price dropped to a low of $2 in November the same year before recovering the following year again.

By April 2013, the price of BTC crossed the $260 mark, before falling by over 50% within hours as Mt.Gox was not able to handle the increased trading volumes and was hit by a damaging DDoS attack. This led to a decrease in investor confidence, but seven months later, BTC hit its all-time high.

In late 2013, Bitcoin hit a historical high of $1,000. The price gradually dropped to $175 in 2015 and rose again to $1,000 in 2017. By December 2017, this coin hit a famous all-time high of $20,000 per coin.

Bitcoin is an asymmetric bet, to say the least. As long as you invest what you can afford to lose and use reliable wallets like Tezro, there is a limited risk of loss with the benefit of substantial financial gains.

Find out all about Tezro’s features and why you should choose it as your wallet. Invest wisely!

 

Get the Tezro App

TEZRO is an all-in-one application for secure instant messaging and crypto payments, there is no need to have multiple chat applications or crypto wallets ever again. Your communication and finances are secure and encrypted under TEZRO. Try it now!

Cryptocurrencies will be mainstream

Will cryptocurrency last? This is one of the questions you will find in most crypto Q&A platforms. The answer to this question is straightforward – cryptocurrencies will be mainstream.

BTC has hit an all-time high of $30,000, and this has created excitement at both the fear and possibilities of a 2017-style crash. But with big corporations boarding the crypto bandwagon, there is an underlying story of digital currencies that continues to unfold.

Click here to understand the difference between digital currencies and cryptocurrencies.

The Covid-19 pandemic has changed the views of crypto enthusiasts and investors across the globe, forcing some to pitch BTC against gold as a strategic hedge. Could this be the verge of cryptos becoming mainstream?

Bitcoin‘s upward trajectory aside, 2021‘s potential as the year of cryptos is increasing, with PayPal deciding to incorporate cryptocurrencies and Facebook finally planning to roll out its crypto known as Diem (Formerly Libra).

This speaks volumes about cryptocurrency as the much-awaited solution that will fix all problems in the financial ecosystem.

 

Crypto Loans

Today, there are many financial lenders that offer loans in fiat currency, which are collateralized by crypto assets. This means that they give you USD, and you give them BTC or any other cryptocurrency as security for repayment.

 

Is It Wise To Take A Crypto Loan?

As a crypto owner, you have a long-term view of your investment. Even though you plan to hold your assets until prices go up, there are times you might be forced to liquefy your coins or fiat currency. Instead of selling, you may consider using these coins as collateral towards a crypto loan.

This allows you to maintain ownership of your funds while gaining access to the fiat currency you need to fund your projects.

 

You can use crypto loans to:

 

  • Fund a business
  • Buy a home
  • Pay travel expenses
  • Pay off high-cost debts
  • Diversify investments
  • ..and more!

When applying for crypto loans, make sure you work with reputable institutions so that you don’t end up falling prey to criminals whose main goal is to steal your valuable assets at all costs.

 

 

Regulations

Although cryptocurrency has seen a boom since the pandemic hit, its regulation still remains its biggest challenge. Bitcoin is becoming more mainstream, but the problem is that it remains unregulated in most countries.

However, the value of this asset over the past few months has forced most governments across the world to create laws that regulate this market.

A case in point in Singapore. The Monitory Authority of Singapore (MAS) has created a legal framework that makes it easy for businesses and individuals to buy, sell, and hold digital currencies.

Given crypto’s potential to change the financial landscape as we know it, nations of the world need to follow suit and act fast in establishing strict rules and regulations that govern the market.

One thing that COVID-19 has highlighted is that the notion that Bitcoin and altcoins have great value in the real world is not a speculation but a fact!

Key Takeaways

 

  • With the mass adoption of cryptocurrencies, cryptocurrencies could become mainstream.
  • Bitcoin has hit its all-time high since 2017 of $30,000, and this upward trajectory is expected to continue in the coming months.
  • Crypto loans are readily available but do your due diligence before working with a lender.

 

 

 

Conclusion

The emergence of Bitcoin as a valuable cryptocurrency has sparked a debate about the future of cryptocurrencies.

Despite the ups and downs that BTC has faced over the years, it has kicked off 2021 with an admirable high of $30,000, and it is expected that its value will increase significantly over the next few months.

Big brands are investing heavily in Bitcoin, and this simply means that digital currency could become mainstream before we know it.

A case in point is Mutual Life Insurance, one of the oldest insurance companies in Massachusetts, which has injected $100 million, yes, 100 million bucks into Bitcoin.

If you happen to have some spare time in 2021 (which you should as a shrewd investor), it seems the best way to make respectable gains is by penetrating the crypto market.

Don’t forget to download the Tezro app to make your Bitcoin investments and trades fully safe and encrypted.

 

Categories Cryptocurrency

How Long Does Bitcoin Take to Send?

How long does bitcoin take to send? Well, one of the biggest concerns for most crypto enthusiasts is that Bitcoin is too slow.

Satoshi Nakamoto, the anonymous person/people behind bitcoin, describes this cryptocurrency as a ‘peer-to-peer version of electronic cash,’ yet BTC is regarded as one of the slowest cryptos to use as an everyday payment mechanism.

 

So, How Long Does A Bitcoin Transfer Take?

In this article, we are going to look at the bitcoin transaction time, bitcoin transfer time and analyze how long a bitcoin transaction takes.

In addition, we will also look at how you can speed up a bitcoin transaction and ensure it is processed immediately. Read on!

 

 

What is a Bitcoin Transaction?

A bitcoin transaction is the transfer of BTC from one party to another. Bitcoin transactions are generated in digital wallets and are transmitted to the Bitcoin network, where they are verified in a Bitcoin “node.” They are then added to the blockchain by a miner.

 

What Happens When You Send Bitcoin?

Before we look at BTC transaction time, you need to know what happens when you send bitcoin. Bitcoin is a digital currency, which means it doesn’t exist in physical form. There is no paper that denotes the value of Bitcoin, and you cannot hold this currency in your hands.

How Does Cryptocurrency Gain Value? Read more here.

Being a virtual currency, Bitcoin has to be verified on a public ledger known as the blockchain, which contains the history of every transaction and signatures.

Every bitcoin you own contains a pair of keys – the private and public keys. The private key is known to you and helps you transact your bitcoins, while the public key is shared with others.

Simply put, the private key helps you authorize transactions while the public key gives information about the transactions.

Note: DO NOT share your private key with anyone you don’t trust. Also, remember to backup this key because if it is stolen or you lose it for some reason, you might end up losing your assets.

A bitcoin transaction message contains three critical elements:

 

Input

This is the code that shows the source of the coins. It displays the history of the bitcoin in your public key.

 

Amount

This is basically the number of bitcoins in a transaction.

 

Output

This is the address of the transaction, popularly known as the public key.

As soon as the blockchain network receives a transaction message containing these elements, miners work to verify or validate the transaction. This is a complicated process that requires one to solve complex mathematical problems and come up with new signatures.

 

 

Understanding UXTOs and Inputs

Considering that someone’s bitcoins can span various blocks in the blockchain, the bitcoin wallet involved in a transaction scans the blockchain, searching for unspent transaction output (UXTO). UXTO is what contributes to a bitcoin user’s balance.

A UXTO database is maintained by the wallet or third-party service on behalf of the bitcoin holder. Every UXTO is indivisible.

For this reason, if the amount you want to pay is larger than the amount to be paid, change is made in the form of a new UXTO. It works the same as buying an item worth $45 using a $100 dollar bill and receiving $65 in change.

To make a payment using BTC, your wallet creates a transaction input that points to a UXTO and unlocks it using a digital signature (private key) that proves ownership. When this happens, the transaction is broadcasted to the BTC network.

For further info about wallets read this article: What is a cryptocurrency wallet?

 

What Determines the Transfer Time of Bitcoin?

If someone asks you, “how long does bitcoin take to send?” You cannot exclude bitcoin transfer time in your conversation. Look, Bitcoin transfer time can take as little as 10 minutes, or as much as several hours, days, or even a week!

This is mainly because miners have to verify and validate transactions, and the network can be slow at times.

Bitcoin transactions are added to blocks that must be verified and added to the blockchain network. The standard mining time for a single block is 10 minutes.

You can read more about that in this article: How Many Bitcoins Are There Right Now?

However, there are a few factors that determine the transfer time of Bitcoin. They include:

 

Amount of Network Activity

The BTC network activity depends on the number of transactions it processes in a single day. If the number of transactions is high, then the network activity will be high. If the number of transactions is low, then network activity will be minimal.

Thanks to the increasing popularity of bitcoin, the network can, at times, experience a backlog of transactions waiting to be verified.

The block sizes are limited (1MB) and are often combined in a large queue Known as the Bitcoin mempool. The size of the mempool size reduces with increasing transaction priority, wait times, and fees.

 

The aggregate size of transactions waiting to be confirmed – from March 2018 to April 2019. Credits: blockchain.com

To understand how network activity affects the transfer time of Bitcoin, look at this scenario.

Assuming that your transaction is the block and mine, the first bitcoin confirmation time will be 10 minutes, and you will receive the other five confirmations in 50 minutes. This means that it could take up to 60 minutes to transfer BTC into your wallet.

 

Transaction Fees

Another factor that determines the transfer time of bitcoin is transaction fees. Mining is a complex task that demands the use of power, advanced technology, and effort. This is why you are required to pay transaction fees in every bitcoin transaction. These fees help in prioritizing your transaction.

This simply means that the more transaction fees you pay, the faster your transaction will be processed. A delay mostly occurs when your transaction fees are very low and miners opt to work on your block last.

Transaction fees in the BTC network are expressed in Satoshis per byte. This is one-hundredth millionth of a BTC per byte size of every transaction. The transaction fees are not necessary, but they prioritize transaction verification.

Being a decentralized digital currency, bitcoin is highly volatile. The transaction fees may increase or decrease, and it is essential for wait time to stabilize.

BTC developers understand that the 30-60 minutes could prompt crypto investors to opt for coins with faster transaction times, and this is why they are constantly working on solutions that will make BTC transactions instantaneous.

These solutions include the Lightning Network, which, once enabled, will ensure wallets shorten transaction confirmation time and reduce transaction fees.

Get the Tezro App

TEZRO is an all-in-one application for secure instant messaging and crypto payments, there is no need to have multiple chat applications or crypto wallets ever again. Your communication and finances are secure and encrypted under TEZRO. Try it now!

Bitcoin Transaction Fee

All bitcoin transactions must be added to the blockchain, which is the official public ledger of all bitcoin transactions, for them to be considered valid and successfully completed.

The job of validating transactions and adding them to the blockchain is done by miners who use powerful computers and vast amounts of energy.

They, however, do this for a financial reward. For every block added to the blockchain, there is a bounty known as the block reward (which currently stands at 12.5 BTC) and transaction fees sent with all transactions included in the block.

Even though some quotas may argue that bitcoin transaction fees are not important, miners have a financial incentive to prioritize the validation of transactions that have higher fees.

 

Credits: Glassnode

If you are looking to send funds and enjoy quick confirmation time, the appropriate fee will vary greatly depending on the following factors:

 

Network conditions

Since a block in the blockchain network can only contain up to 1MB of data, there is a limited number of transactions that can exist in one block. When there is congestion, there are huge numbers of transactions awaiting confirmation, then there is space in a given block.

When you send some funds, and the transaction is broadcasted, it goes to what is known as a memory pool (mempool, as mentioned earlier). It is in the mempool where miners prioritize transactions with a higher transaction fee.

When the mempool is full, the fee market may turn competitive. Users will try to get their transactions validated and verified faster by including higher fees.

When the market reaches the maximum equilibrium fee that all users are willing to pay, miners will work through the mempool in order.

The moment the traffic in the mempool decreases, the transaction fees will decrease.

 

Transaction size

Transaction size is one of the factors that affect transaction fees. Large transactions take up more space in a block, while smaller ones are easier to validate. Miners, therefore, prefer smaller transactions.

A large transaction will need a larger transaction fee to be included in the next block

 

How Long Does a Transaction Confirmation Take?

Asking how long does a bitcoin confirmation take is like asking how big a house is. There are varied answers. Generally, bitcoin transactions take anywhere from 10 minutes to one hour. The main reason behind the different speeds is that different situations need different amounts of confirmations.

Bitcoin transaction confirmation can be divided into three categories, as outlined below:

 

Fast

One of the questions that most people ask is – are bitcoin transactions instant? The answer is yes. There are instances where the merchant accepts payments as soon as a transaction is broadcast to the network. This can take place in as little as 5-10 seconds.

This scenario is known as zero-confirmation. The only problem with zero confirmation is that it is insecure and could increase merchants’ vulnerability to double spend. Therefore, many people don’t accept zero-confirmation even though it is fast.

 

Medium

How long does it take to transfer bitcoins between wallets? Well, in this category, merchants require at least two confirmations.

Each confirmation is equal to the bitcoin transaction being included in a single block, and every block takes 10 minutes. Since there are two blocks, it means that transactions take approximately 20 minutes to be confirmed.

 

Slow

Most bitcoin exchanges that allow users to trade in BTC typically require more confirmations. For instance, Coinbase and Kraken require six confirmations each.

Therefore, if you are selling BTC in these exchanges, it could take 60 minutes for a transaction to be confirmed.

It is worth noting that six confirmations are a requirement for a majority of high-value transactions, such as buying electronics or gold with BTC. When a transaction has six confirmations, it has guaranteed safety and is not prone to double spend.

Tip: If you are a merchant or you are aspiring to be one, avoid zero-confirmation even if it clears in seconds. It is better to wait for an hour for funds to clear and be spendable than lose your valuable assets to cybercriminals.

 

 

How Long Can a Bitcoin Transaction Stay Unconfirmed?

A bitcoin transaction can stay unconfirmed for about 48 hours. However, this is nothing to worry about. Unconfirmed transactions often get dropped from all mempools after 48 hours, and your coin balance is updated in your wallet.

In case you want to ensure that your transaction gets processed as fast as possible, you need to set an appropriate transaction fee.

 

How to Send Bitcoin Faster? Tezro app!

There are a number of ways that you can speed up the current bitcoin transaction time. One of the ways is to pay a higher transaction fee so that miners can prioritize your transaction.

To ensure you set a fee that will guarantee fast transactions, it would be helpful to choose the most reliable and effective bitcoin wallet.

Tezro is, without a doubt, the most revolutionary application that eliminates the need for multiple wallets and makes it easy for you to pay a higher transaction fee so that your transactions can be confirmed faster.

You can also trade your Bitcoin and other cryptocurrencies in the Tezro app and liquefy your assets in no time!

Read more here about Tezro app features.

 

Key Takeaways

 

  • The amount of network activity and transaction fees are the main factors that determine the transfer time of BTC.
  • You can reduce bitcoin transfer time by paying a higher transaction fee and using a wallet that allows you to do so like Tezro.
  • Never use zero-confirmation since it could make your transactions vulnerable to security threats.

Conclusion

How long does bitcoin take to send? Well, now that you have read this article to the end, you certainly have the most appropriate answer to this question. However, before we wrap it up, you are probably wondering when a transaction is confirmed.

A BTC transaction is confirmed once a miner processes the block that contains a transaction.

If you have used the Tezro app and set a high transaction fee, a miner is likely to process your transaction quickly. Tezro provides a nominal fee that ensures your transaction is processed with a particular time limit.

It is worth noting that one confirmation is enough for transactions under $1,000, and you can expect funds in around 10 minutes.

Six confirmations are recommended for transactions between $10,000 and $1,000,000 while sixty confirmations are required for transactions over $1,000,000 for enhanced security.

Get in touch with Tezro app and make your transactions faster and safer.

Categories Cryptocurrency

What Does a Bitcoin Look Like? Everything You Need to Know

What do Bitcoins look like? This is one of the concerns that novice crypto enthusiasts ask. This is a genuine question because, as a new user, it is easy to get started with Bitcoin without understanding or even knowing its technical details.

Once you create a Bitcoin wallet, your first Bitcoin wallet will be generated. You can then share it with others so that they can pay you, or others can give you their addresses so that you can transact with them. Bitcoin works the same way as email, only that its address can only be used once.

Even though using BTC is easy, it is important to have enough information about it before you invest your hard-earned money in it.

You need to answer several questions, including; how does Bitcoin look like? What does a real Bitcoin look like? What does a Bitcoin ATM look like? What does a Bitcoin machine look like? What does Bitcoin look like on a computer?

What does a Bitcoin transaction look like? To get answers to these questions and much more, keep reading and become a Bitcoin expert!

What Is Bitcoin?

Bitcoin might be the most popular cryptocurrency on the planet, but it still remains an enigma to many people.

It is a complicated yet fascinating new-age currency that exists virtually and allows users to be somehow anonymous.

Just like US Dollars or Euros, Bitcoin is designed to pay for goods and services.

You can read this article to know the answer to how many bitcoins are there right now.

Unlike traditional currencies, Bitcoin has the following features:

Digital

There are no Bitcoin bills or physical Bitcoins. This currency thrives online and can only be tracked by a blockchain.

Within Bitcoin’s blockchain network, there exist constantly growing groups of records that offer a complete history of each transaction. All transactions are posted on a public ledger for everyone to access.

Non Refundable

Once you send traditional or digital currency, there is a way you can dispute the transaction and get your money back. With cryptocurrencies, this is not possible. Once you send BTC to someone, there is no way of getting it back unless the recipient decides to send it back to you.

Fast

The blockchain network in which Bitcoin is built processes payments almost instantaneously.

While normal banks can take days to transfer money, especially for overseas payments, the Bitcoin network only takes a few minutes.

Pseudo-anonymous

Today, banks know everything about their clients. They have a lot of information in their databases, including phone numbers, spending habits, addresses, credit history, and more.

A Bitcoin wallet, on the other hand, is not linked to any personal information. Even though Bitcoin transactions are posted on a public ledger, it is nearly impossible to trace a particular wallet address to a particular person.

You can even decide to make your BTC transactions anonymous by implementing a few steps such as hiding your IP, using a different address for every transaction, and using wallets that prioritize security, ease-of-use, and opaqueness, such as Tezro.

Decentralized

When creating the Bitcoin network, one of Nakamoto’s primary objectives was to create a network that was independent of governing authorities.

It was designed such that every individual, business, or machine involved with mining and/or exchange check becomes part of a vast system.

Additionally, even if part of the system goes down, transactions will keep moving.

How Does Bitcoin Work?

One of the easiest ways of answering the question “what do Bitcoins look like?” is to understand how this digital currency work in the first place. Basically, Bitcoin uses advanced encryption methods to secure and verify transactions.

Every BTC transaction is recorded on a public ledger called a blockchain. This makes it possible for people to trace the transaction history of every coin and stop malevolent individuals from spending coins they don’t own, undo transactions, or make copies.

What Is A Blockchain?

Understanding the blockchain is an integral step towards knowing how Bitcoin works. When you use fiat currency or other traditional payment methods such as credit/debit cards, your transaction history goes through a financial institution.

This institution has to verify and clear every transaction before it is added to your account statement. Normally, this statement is kept and viewed by the bank.

The blockchain in which Bitcoin is built is a revolutionary technology that came to change the transaction history paradigm we have been using for years.

While credit card transactions are stored in the bank and often viewable by the bank and yourself, Bitcoin transactions are stored in nodes.

These nodes can either be servers or computers that are stored in different parts of the world. BTC transactions are transparent and can be viewed by anyone on the network.

In the traditional system, malicious elements within the bank could change records and manipulate clients’ transaction history.

With blockchain, transaction history is free from any foul play. In case anyone modifies their copy of the blockchain, everyone will find out since this copy wouldn’t match other copies in the blockchain.

To protect privacy, users in the BTC blockchain are identified by the following things:

  • Wallet addresses- this is a string of random numbers and letters where people can send you BTC. No one can trace a wallet address unless you want them to.
  • Transaction amounts.
  • Other amounts.

Get the Tezro App

TEZRO is an all-in-one application for secure instant messaging and crypto payments, there is no need to have multiple chat applications or crypto wallets ever again. Your communication and finances are secure and encrypted under TEZRO. Try it now!

What Does A Bitcoin Transaction Look Like?

From a glance, Bitcoin transactions might seem simple and straightforward. Nonetheless, they are more complex than you might think. What most people, including BTC users, don’t know is that it is almost impossible to send a particular amount of BTC in one go.

When you make a payment, both the Bitcoin wallet and the Bitcoin network have to undergo a set of steps to make sure that the right amount of coins reaches the recipient’s wallet.

It is worth mentioning that Bitcoin is not a single record of a coin. Instead, it is a file with a value that registers as a transaction whenever one initiates a transaction or receipt. There are three main elements involved in every Bitcoin transaction. They include:

  • A transaction input: This is the Bitcoin address from which the BTC was sent.
  • A transaction output: This is the Bitcoin address to which the BTC was sent.
  • The amount.
Credits: BitcoinWiki

How Does a BTC Transaction Work?

The BTC you send to another person was probably sent to you by someone else. When they were sent to you, the address used was registered on the blockchain network as the transaction input, and your address – the one that was used to send the funds was registered as the transaction output.

When you send BTC to another address, your wallet creates the transaction output, which is basically the address of the party you are sending the coins to.

The transaction will be recorded on the blockchain, with your address as the transaction input.

When that party sends the coins to another party, their address will automatically because the transaction input and the recipient’s address will become the transaction output. The cycle goes on and on…

Using the Bitcoin network, people can trace every transaction way back to when it was first created. It makes it easy for people to know who made a transaction to who and at what time.

This creates a transparent system that cannot be found in traditional payment methods.

First Bitcoin Block

The first block of Bitcoin ever mined is known as the Genesis block. This is the block that forms the foundation of the Bitcoin trading system we know today. It is also the prototype of all other blocks on the BTC blockchain.

The Genesis Block was created in 2009 by Bitcoin’s founder Satoshi Nakamoto, and it set the pace for Bitcoin trading.

Also known as Block 0, the Genesis Block is the ancestor that every Bitcoin block cab trace its lineage back to. Nakamoto mined this block using a CPU, as opposed to the specialized graphic card miners needed today.

It was easy for him to achieve this with a simple CPU because no one knew Bitcoin existed, and it was not worth anything. This is the block that kick-started the process of trading BTC.

Unlike other 500,000+ Bitcoin blocks that came after it, Nakamoto left this message on the code of the block:

The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.”

This was taken from the headline of a London Times post dated Jan 3, 2009, that outlined banks being bailed out by the government.

Even though Nakamoto didn’t explain his message, Bitcoin experts interpreted it as a reference to his main objective of developing Bitcoin: To eliminate middlemen and banks that he deemed unreliable and corrupt and create a people-driven currency.

The origin of the Genesis Block is shrouded in mystery as the Bitcoin founder himself, with questions and concerns arising about why the 50 Bitcoins in this block cannot be spent, why the subsequent block took 6 days to mine, and why BTC traders still transfer Bitcoin into the Genesis block.

How Does Bitcoin Wallet Address Look Like?

A Bitcoin wallet is software in which Bitcoins are stored. Bitcoin wallets facilitate the sending and receiving of coins and give ownership of the BTC balance to the user. There are four main types of Bitcoin wallets. They include:

Desktop Wallets

These are wallets installed on the desktop computer and provide the user with complete control of the wallet. They function as an address for the user to send and receive BTC.

Mobile Wallets

These wallets work the same way as desktop wallets. However, they are installed on mobile devices.

Many mobile wallets have dedicated applications for Android and iOS, like Tezro for example.

Tezro allows you to exchange and store crypto assets with total discretion and privacy. Read more here.

Before installing mobile wallets, you need to know that there is significant malware posing as reliable and affordable wallets. It is highly recommended that you research your options before you decide on the one to use.

Web Wallets

These are wallets that can be accessed on any browser or mobile device. You must choose a web wallet carefully since it will store your private keys online.

Hardware Wallets

These are regarded as the most secure Bitcoin wallets. This is because they store Bitcoins on a physical piece of equipment that is often plugged into a PC through the USB port.

They are immune to malware attacks and are safer from hackers than other wallets. However, they come at a higher cost since a standard hardware wallet costs anywhere between $100 and $200.

Every Bitcoin address has a string of 26-35 alphanumeric characters known as wallet addresses. A Bitcoin address can be used to transfer BTC to another address on the network, as long as the sender’s wallet software is compatible with that address type.

There are different Bitcoin wallet address formats depending on the wallet software you choose.

Golden Bitcoin Coin

If you have been researching online about Bitcoin, or you are an enthusiastic Bitcoin investor, you have probably come across the Bitcoin golden coin.

Well, what you need to know is that these coins are not worth anything. They are just a trick used by souvenir sellers to make money from unsuspecting investors.

The golden Bitcoin coins are made from metal or plastic and don’t have any real gold on them. In fact, you can buy them online for $1-$2! These coins have nothing to do with Bitcoin and are not related in any way to Bitcoin forks such as Bitcoin Gold or Bitcoin Cash.

What Does a Bitcoin ATM Look Like?

Just like traditional ATMs, a Bitcoin ATM is a portal in which users can engage in a financial transaction. The main difference between traditional and Bitcoin ATMs is that the former users to deposit and withdraw cash, while the former allows users to buy and sell Bitcoin with cash.

The Bitcoin ATM is comprised of a monitor, bill acceptor, QR Scanner, and dispenser. On the backend, these components are integrated by software to make Bitcoin trading easy, fast, and secure.

Unlike traditional ATMs, Bitcoin ATMs are not connected to a bank account. Rather, they are connected to a cryptocurrency exchange via the web. These exchanges allow users to sell and buy BTC instantly.

The first Bitcoin ATM was erected in 2013 at the Waves Coffee Shop in Vancouver, Canada. Even though it has since been removed, this is the ATM that paved the way for other Bitcoin ATM companies to innovate revolutionary machines that are in use today.

What Does a Bitcoin File Look Like?

Each Bitcoin is a computer file that is stored in a digital wallet on a computer or mobile device. You can send Bitcoins or part of one to your wallet, or you can send them to others.

However, it’s worth noting that Bitcoins don’t exist as individual files. Instead, they are stored as amounts in a Bitcoin address.

The size of the Bitcoin blockchain is 15,000 MB, but you don’t need to download the blockchain to trade or accept Bitcoin.

Key Takeaways

  • Bitcoin is the most popular cryptocurrency in the world and ranks #1 by market cap.
  • The 50 Bitcoins in the Genesis Block cannot be spent. The reason behind this is yet to be known.
  • Bitcoin golden coins are worthless, and you shouldn’t buy them as a form of investment. Bitcoin only exists online!

Conclusion

What do Bitcoins look like? Well, Bitcoin is a crypto powered by blockchain technology that is not easy to comprehend.

Its claim to popularity is that it is the first decentralized digital currency in the world, meaning that it works without the oversight of a central authority.

Advocates strongly believe that it has the potential to revolutionize the financial space, while critics argue that it’s just a fleeting fad.

Despite the beliefs peddled by skeptics, this cryptocurrency has gained traction across the globe, and companies have now adopted it as an acceptable form of payment.

With the world moving towards a cashless future, Bitcoin could, without a doubt, take its place as the ultimate alternative to traditional currency.

When that happens, be ready. Download Tezro app, where you can exchange currency on a fully encrypted service.

Categories Cryptocurrency

Is Bitcoin Traceable? Everything You Need To Know

Is Bitcoin traceable? This is one of the main questions you will find in most cryptocurrency social and Q&A platforms. The answer to this question is straightforward – Bitcoin is traceable. All Bitcoin transactions are public; hence they are easy to trace.

Once they are verified, they are stored in the Bitcoin network. It is worth noting that your personal information is not displayed in a transaction. Instead, your Bitcoin address is the information used to define where your coins are allocated and where they are sent.

Users get Bitcoin addresses from their individual wallets once they create their accounts. Once these addresses are used, they are tainted by the history of the transactions they are involved with. As long as you are on the blockchain network, you can see all transactions associated with a particular address.

So, can cryptocurrency be traced? Can a Bitcoin be traced? How traceable is Bitcoin and other cryptocurrencies? How can Bitcoin be traced? Can you track a Bitcoin address? Can stolen Bitcoin be traced? Read on to find the ultimate answers to these questions!

Can Bitcoin Transactions Be Traced?

If you find early adopters and pose the question; can Bitcoins be traced? They will hurriedly tell you that doing achieving that is a nearly impossible mission. This is because most of them, if not all, thought that Bitcoin is an anonymous way of making ghost transactions that were not verifiable.

This is further from the truth. Protocols in the Bitcoin network are set to assure users of transaction security and transparency, but the blockchain network keeps track of coins transfer among wallets.

In simple terms, there is no such thing as total blockchain privacy that most early crypto investors purport. However, you can achieve what is known as pseudo-anonymity.

This means that you can preserve your anonymity as long as you don’t connect your Bitcoin address to your personal details and store your passwords correctly.

Thanks to the blockchain’s ability to keep track of any transaction, startups, and tech firms have developed software that can trace how coins have moved. The software gives law enforcement agencies to pursue illegal earnings and other crypto-related crimes.

Among the blockchain startups that focus on developing analysis and tracking software include Chainalysis, Elliptic, Numisight, and Skry.

These companies are developing solutions that help trace Bitcoin transactions and ensure digital assets, and the blockchain network is not used to commit financial crimes, store illegal downloads, or host pirated content.

So, is cryptocurrency traceable? The answer is a resounding, yes!

Can A Bitcoin Wallet Be Traced?

All Bitcoin wallets involved in a Bitcoin transaction are recorded and stored on the Bitcoin blockchain. Since the blockchain ledger is public, the wallet addresses are available for everyone to see.

However, Bitcoin addresses do not reveal any identifiable details. Nonetheless, they provide a foothold for investigations if the need arises. This doesn’t mean that it is difficult or nearly impossible to trace a Bitcoin wallet.

Tracing a Bitcoin wallet largely depends on what you do with it and the willingness of another person or entity to trace you.

Basically, whenever you share your Bitcoin wallet, e.g., when buying something from a shop, it is easy for the authorities – or any interested party to trace it back to you, especially if you are doing something nefarious with your digital coins.

Credits: Chainalysis

Can You Trace A Bitcoin Address?

This is one of the questions that everyone who is interested in Bitcoin needs an answer to. Without mincing words, the answer to this question is YES. Your Bitcoin address can be traced by governments, criminals, and exchanges.

Bitcoin doesn’t guarantee anonymity. Recently, it has become evident that the addresses that Bitcoin users receive are not as anonymous as Bitcoin enthusiasts believe. It’s worth noting that wallet addresses are unique, but they are not less detectable.

Wallet addresses on exchanges can be assessed easily. When this happens, hackers, authorities, or anyone else can create a link between the address on the exchange and the wallet that made a particular transaction.

In an unsurprising turn, companies such as CipherTrace and Chainalysis undertook an analysis that traced certain wallet addresses to notable real-life figures and criminals.

In a nutshell, Bitcoin addresses are pseudonymous. All addresses created by a wallet can be traced back to it. However, you cannot find out the real identity of the Bitcoin wallet owner by their wallet address. The blockchain keeps a record of all the transactions made on the Bitcoin network, but only these details are made available:

  • Sender’s address
  • Receiver’s address
  • Charged fees
  • Date of transfer
  • Number of confirmations
  • Amount of Bitcoins sent

Although knowing what transactions someone has made is easily discernable, it is nearly impossible to say who this someone is by simply tracing the Bitcoin address.

The only way to reveal the person behind a transaction is to link his/her public key with their private key, which is easier said than done. However, this information can be known through theft or voluntary revelation.

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How Can I Keep My Bitcoin Transaction Private?

Use New Addresses for Every Transaction

Even though we have answered the question, “is Bitcoin traceable?” in the affirmative, this doesn’t mean you should compromise on your security. To lay safe, make sure you use a new Bitcoin address every time you receive new payments.

Also, you can use multiple wallets for diverse purposes. By doing this, you will isolate all transactions in a way that it will be challenging for anyone, including crypto experts, to bind them together.

This will also ensure that those who own Bitcoins will not see the other Bitcoin addresses that you own and the transactions you make with them. As a shrewd crypto investor, this is one of the most imperative insight you should always keep in mind.

Use Anonymous IP Address

Since Bitcoin is a decentralized peer-to-peer network, it is possible for others to follow transactions and log IP addresses. To ensure your transactions are untraceable, use the Tor browser or a reliable VPN to mask your IP address.

When you mask your IP address, it becomes nearly impossible for anyone in the blockchain network to trace transactions back to you or log to your IP. If you don’t have a good VPN, you can the Tor browser is the best alternative.

Tor is a volunteer community that believes in surveillance-free and anonymity in internet usage. When you use it to connect to the Bitcoin network, its nodes encrypt and route your internet traffic to other nodes; thus making it difficult for other users to identify your IP address.

Use Tezro for Safe Crypto Payments

Tezro is a reliable, trusted, and astoundingly effective all-in-one application that eliminates the need for multiple crypto wallets. With these applications, you can rest assured that your crypto payments are secured and encrypted, and no one can access or trace your Bitcoin address.

You can use it across multiple devices, including PCs, tablets, and smartphones. What makes Tezro is that its developers have created dedicated apps for android, iOS, MAC OS, and windows. Grab this app today and see the difference!

Other Ways to Keep Bitcoin Transactions Private

Other ways to keep your Bitcoin transactions private include:

Only Use Wallets from Known Sources

Today, there are thousands of wallet companies. What every Bitcoin enthusiast should know is that many less reputable companies that provide attractive features are malware in disguise.

Always choose a regulated exchange because it is more likely to have reliable safety mechanisms. Before you put your valued assets in a wallet, ensure you do your homework well, and only choose the best you can trust!

Consider Cold Wallets

Cold wallets are great alternatives to online wallets. These wallets are basically hardware devices that are not connected to the web. However, since accessing cold wallets can sometimes be inconvenient, it is recommended that you split your Bitcoins.

Store a small number of your coins in a reliable digital wallet such as Tezro for trading needs, and keep the rest in a cold wallet. The primary advantage of cold wallets is that they take private keys in an offline mode, hence decreasing the chances of theft and other crypto-related malicious activities.

The practice of using cold storage is not only critical for individuals but also crypto exchanges that deal with large amounts of money and are under constant threat by cybercriminals. Popular cold storage methods include sound wallets, hardware wallets, paper wallets, and storage devices such as USB drives.

Keep Your Wallet Software Updated

A wallet running on outdated Bitcoin software can be a soft target for hackers and other parties who might be interested in tracing your Bitcoin transactions. The latest version of a wallet will have improved security features and increase the safety of your Bitcoins.

Also, constantly update your computer operating systems and software as well as your mobile devices to keep your Bitcoin transactions safer and more private.

Always Use a Secure Internet Connection

Most public networks have security flaws that make them vulnerable to cybersecurity threats. If you have a Bitcoin wallet on your mobile device or laptop, consider using your phone’s hotspot instead of connecting to the internet at a public park or in your hotel.

When you connect to a public Wi-Fi, hackers can easily access sensitive data in your computer or mobile device, and if interested, they can trace the Bitcoin wallet address back to you.

Don’t Publish Your Bitcoin Address in Public Platforms

Unless you have a good and genuine reason, avoid publishing your Bitcoin address in a public space. If you choose to do the contrary, don’t forget that all transactions will be publicly tainted by the history of your public address.

Also, be careful not to put out information about your purchases or transactions that could allow people to identify your Bitcoin address and trace it back to you.

What Are Some Of The Future Improvements That Could Improve Privacy?

There are several future improvements that could enhance privacy in Bitcoin transactions. They include:

  • Efforts are underway with the payment messages to avoid tainting multiple addresses together during a transaction.
  • Graphical user interfaces might be improved with time to discourage address reuse and offer users friendly and effective payment request features.
  • Bitcoin Core change addresses – which are not visible in the recent transactions column in the Bitcoin network might be implemented in other wallets in the near future.
  • Research is being done to create a host of other potential extended privacy features, such as being able to join various random users’ transactions together.

Key Takeaways

  • Bitcoin can be traced, but it all depends on how anonymous a user is when making a transaction.
  • All transactions are displayed on a public ledger, and anyone on a network can access them. However, the wallet addresses displayed are not attached to any personal information.
  • Some companies have designed cryptocurrency tracing software that might enhance integrity in Bitcoin transactions.
  • Tezro is one of the best apps that can help Bitcoin users make safe cryptocurrency payments without the need for multiple wallets.

Conclusion

Is Bitcoin traceable? Well, from the information above, there is no doubt that Bitcoin can be traced. However, the traceability depends on how anonymous you were when making a transaction.

To achieve a completely anonymous transaction, make sure you mask your IP using a reliable VPN or use Tor browser to access the Bitcoin network.

Also, ensure you use different addresses for different transactions and use apps such as Tezro to securely integrate these addresses and make safe crypto payments.

When you do this, your Bitcoin transactions will be publicly available but will not be traced back to you unless you want them to. This will keep your digital assets safe from hackers and crypto criminals.

For further safety online, make sure to download a fully encrypted text message app. With Tezro, you can exchange assets in a completely private and safe app. Download it now!

Categories Cryptocurrency

Crypto vs. Stocks: What Brings More Profit On Investment?

One of the most debated topics in the crypto space is crypto vs. stocks. Most investors are nervous about the stock market and are constantly looking for alternative investments such as cryptocurrencies.

However, they still want to understand whether cryptos are better than stocks so that they can make sound decisions.

Some of the overarching questions in their minds include; should I invest in stocks or cryptocurrencies?

Are cryptos more profitable than stocks? What are the key differences between stocks and cryptos? To find the answers to these questions, read on!

Crypto Risk vs Stock Risk

All investments carry some risk. Weighing the risks between bitcoins vs. stocks is critical in deciding on the assets to add to your portfolio. With individual stocks, there are risks involved.

There is a risk that it might not grow, and dividends might be cut. These are risks that are common with many investments.

What makes stocks different is that there are predictors who offer some guidance investors can use to understand where prices might go.

Cryptocurrencies, on the other hand, don’t have predictors that stock markets do. The crypto market is speculative and completely based on demand and supply. All digital coins are, to some degree, based on what people are willing to pay.

Nonetheless, due to their scarcity, they are subject to huge gains. Therefore, even if cryptocurrencies carry high risks, they have the potential for more profits than stocks.

Credits: MasterTheCrypto

Investing in Crypto vs. Investing in Stocks: The Main Differences

Below are some key differences between cryptocurrency vs. stocks:

Crypto vs. Stocks: History

Even though you cannot base future performance on the past, one of the best ways to create a rift between bitcoin vs. the stock market is to look at how investments have fared over time.

In 2015, the bitcoin price fluctuated between $200 and $500 per coin. Nonetheless, in December 2017, the price rose significantly, reaching as high as $19,891.

In December 2018, the price dropped to below $3,500. Between March and July 2020, the bitcoin price has bounced between $3,858 and $9,074.

Stock growth has not been as dramatic as cryptocurrency growth. It has been stable since 2018. The S&P 500 index was $2,000 in 2015. Although ups and downs have been experienced through the years, the S&P price stands at $3,100 in 2020.

The reason why we have seen significant changes in cryptocurrency prices over the years is because of its high volatility. This volatility is due to the fact that there is no natural way to value this digital asset.

The prices went to nearly $20,000 in 2017, went down to $3,000, and they are now almost back to $10,000. Stocks have proven to have more long-term historical support.

Still, the volatility of cryptocurrencies makes them more valuable than stocks since they present investors with better opportunities for higher ROI.

Crypto vs Stocks: Volatility

Another difference between stocks vs. crypto is volatility. Cryptocurrencies are often valued based on their popularity and reputation, which makes them highly volatile with extreme highs and lows. The cryptocurrency market is unpredictable and prone to sudden rises or crashes.

On the other hand, stock investors tend to hold on to their stocks during times of volatility, with the hope that things will eventually change.

Most folks will tell you that you should consider investing in stocks over cryptocurrencies. Well, the choice is entirely yours. However, thanks to their high volatility, chances are high that you will get more profits from cryptos than from stocks as long as you embrace the right cryptocurrency investment strategy.

As a recap, don’t forget this – volatility is a two-sided coin of the cryptocurrency world. It offers the potential for profits and losses in equal measure. Therefore, don’t let this discourage you from investing in these digital assets. Invest wisely, and you will make profits!

Crypto vs Stocks: Fraud

Stocks are highly regulated and must undergo rigorous audits so that they can continue to be traded in the market. Due to the intensive scrutiny that comes with making stock, it is highly unlikely that the stocks you choose to invest in will be fraudulent.

On the other hand, cryptocurrency investment is prone to fraud. This is because it is decentralized and unregulated in nature. Over the years, many scams involving crypto exchanges, trades, and mining have been reported, with investors losing thousands of bucks.

Though, this does not mean that you shouldn’t invest in cryptocurrency. As long as you find a secure wallet to store your valuable assets such as Tezro, there is no reason why you should not worry about your coins being stolen.

Click here to know more about Tezro features and why you should put your trust in Tezro.

Also, make sure you join legit and reputable exchanges. When you do this, you will make the most out of the lucrative cryptocurrency industry.

Crypto vs Stocks: Privacy

Privacy is another element that differentiates the stock market vs. cryptocurrency. When you purchase a stock, it is issued in your name, and the evidence of your ownership is out there.

Due to record-keeping and tracking involved, it is very easy for authorities or even individuals to find out the details of a transaction.

Even though the cryptocurrency transaction details are displayed on a public ledger, names and other personal details are not displayed. This means that nobody can find out that you made a particular payment without your consent.

Crypto vs Stocks: Ease of Entry

Trading crypto vs. stocks is different based on ease of entry. Stocks are highly regulated. This means that you need to do a lot of paperwork to get started.

You must provide a lot of information and sign declaration forms that will add to the cost and time needed to start trading. You don’t need any paperwork to start trading on crypto.

There are no requirements for intermediaries such as brokers, and you don’t have to sign any declarations. This saves you time and money and increases your chances of making more profit.

Crypto vs Stocks: Timing

Stock trading has its sessions, and there is no trading on weekends and public holidays. Events happening in real life, such as natural disasters, have an immediate impact on trades.

Cryptocurrency trades are different. Crypto exchanges work around the clock. They are not affected by holidays and weekends or any events in real life.

This means you can act fast and make profits whenever you find a perfect opportunity to trade.

Who Is A Good Fit For Stocks?

To better understand the differences between the crypto market vs. stock market, you need to know who is a good fit for stocks. Stocks are appropriate for the bulk of any portfolio.

Thanks to their underlying characteristics, stocks are stable and can give returns for quite a long time. Even with some short-term volatility, most companies will exist in the future, and this guarantees stability.

Below are some of the reasons why you should invest in stocks:

Money Sitting in Cash Will Lose Value

Due to inflation, the money sitting in your drawer or bank account will lose value with time. Look – if you save $10,000 today, it will not be $10,000 in five years.

Well, it will still be 10,000 bucks, but it will not be worth what it was worth when you first earned it. When you invest in stocks, your investment will not lose value. You will continue earning dividends for a long time.

Save For Retirement

When you invest in stocks, you will have a nice huge nest egg to live off when you retire. Investing in stocks is a great way to save for the future.

Steady Income

Stocks, especially dividend stocks, give you real hard cash on a regular basis.

This means that even if you lose your job or your contract suddenly comes to a halt at the end of the year, you will have something to pay your bills before getting another opportunity.

Become Part of The Company You Love

When you purchase stocks, you automatically become its part-owner. If you are passionate about particular brands and products and you would love to own a piece, consider buying stocks!

Who Is Good Fit For Crypto?

If you want to hold a valuable asset away from fiat currency, cryptocurrency is a good fit for you.

Factually, cryptos hold more risks than stocks, but they are equally rewarding.

There are many reasons why you should invest in bitcoin and other cryptocurrencies. They include:

Incredible Returns

One of the main differences between crypto vs. stocks is that the former guarantees more returns than the latter.

For example, the highest returns you can anticipate from US stocks is 15-20%. Cryptocurrencies show huge changes in their prices over short periods.

With the right strategies, you can make admirable profits from digital coins.

Independent Alternative

Wealth investors across the globe are predicting a stock market crash in the next few years. Cryptocurrency might be a safer alternative to all traditional investment solutions.

Experts believe that cryptos will continue to thrive, and this is one of the reasons you should consider investing in them.

Simplicity

Trading in stocks is traditionally bothersome, complicated, and time-consuming. Joining and taking part in cryptocurrency trading is easy. You don’t need to undergo vigorous steps and procedures to get started.

All you need to do is create an account, get a wallet, and start trading your assets without any effort.

High Liquidity

Cryptocurrencies have high liquidity. This means you can quickly and easily buy and sell them.

Technological organization of trading platforms allows the use of a myriad of tactics and tools, such as limit orders and algorithm-based trading.

These strategies permit automated trading at a specified selling price.

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TEZRO is an all-in-one application for secure instant messaging and crypto payments, there is no need to have multiple chat applications or crypto wallets ever again. Your communication and finances are secure and encrypted under TEZRO. Try it now!

Stock Markets are Equally Risky!

The biggest difference between investing in crypto vs. stocks is that cryptocurrencies have a significant risk. It is, however, worth noting that the stock market is equally risky.

When you invest in the stock market, returns are not guaranteed. Even though there are many things that can help you predict how a stock will perform in the future, there is no guarantee that prices will shoot or the company will pay dividends. Also, there is no assurance that the company will stay in business!

The returns you get from your stocks depends on how much they are worth when you sell them. This poses a risk since you might earn less than you initially invested.


Look – stock prices often change for many reasons. When there is a downward trend in the market, you might lose all your money when you buy and sell stocks.

One of the biggest stock market exchanges in the US, the NASDAQ suffered oscillations throughout this year, related to the COVID-19 pandemic. Credits: Statista

This is especially the case if you are not planning to invest in the long term. If you utilize leverage to invest in stocks, such as short selling or buying on margin, you could potentially lose more than you invested.

Stock trading vs. cryptocurrency trading is different in terms of volatility. Crypto trading is more volatile and riskier. Surprisingly, this is also true for stock trading.

There are regular ups and downs in the stock market. There are stock prices that change quickly due to an array of factors, and this makes them volatile and riskier.

If such a price drop is predicted and you try to get your money out on short notice, you could end up making significant losses.

Common Risks That Every Stock Faces

Stocks face different types of risks. They include:

Commodity Price Risk

This is basically the risk of a swing in commodity prices affecting the company.

If you buy stocks from a company that sells commodities, you will only make profits when prices go up, but you will make losses when prices drop.

Headline Risk

This is a risk of negative publicity that comes from stories in the mainstream media.

Rating Risk

Credit rating and analyst rating are the two most important ratings that could have a negative or positive impact on companies that trade publicly.

Negative ratings could lead to a downward trend in stocks, which means investors can lose money.

Detection Risk

This is the risk that the regulator, auditor, compliance program, or any other authority fails to find until it’s too late.

It includes improperly stated earnings, management skimming money out of the company finances, and other types of financial shenanigans.

Detection risk damages the company’s reputation – which might be impossible to repair. This leads to a significant fall in stock prices.

Legislative Risk

This is basically the tentative relationship between the government and the company.

Specifically, it is the risk that actions by authorities will constrain a company, therefore adversely affecting investors’ holdings in that industry.

Other risks involved in stock trading include model risk, interest rate risk, inflationary risk, and more!

Credits: MarketWatch

Is It Worth Investing in Cryptocurrency?

We can find an abundance of positive sentiments around cryptocurrencies. Some investors compare cryptos to gold as a potential store of value since they increase their relative worth against fiat currencies and gold.

There are many reasons why you should invest in cryptocurrencies, but you must first understand the market and the underlying risks. These digital assets are useful for portfolio diversification.

They are a hedge against inflation and geopolitical uncertainty. As they become more widely accepted as a mode of payment, they will gain acceptance as legitimate asset classes.

When you invest in cryptocurrencies wisely, you will join the bandwagon of high-net-worth investors in no time.

Key Takeaways

  • Stocks are as risky as cryptocurrencies.
  • High volatility is not a huge disadvantage of the cryptocurrency world. It comes with highs and lows that could result in gains or losses in equal measure.
  • As long as you choose the best investment strategy, cryptocurrencies are some of the best assets to invest in.

Conclusion

Without a doubt, the difference between crypto vs. stocks is evident. Cryptocurrencies are more volatile and riskier, but this doesn’t mean that stocks are not risky.

Cryptos are more profitable and offer high liquidity than stocks. Therefore, if choosing between the two was an option, it is highly recommended that you consider investing in both stocks and cryptocurrencies, but pay much attention to the latter.

Read this article as a guide, make the best decisions, and you will, without a doubt, make a kill out of your investment.

Plus: don’t forget to download Tezro, where you can manage your investment in a fully encrypted text message app!

Categories Cryptocurrency

Best 5 Cryptocurrency Investment Strategies for Bitcoin & Ethereum

What is the best crypto investment strategy? This is one of the questions that repeatedly echo through the halls of every cryptocurrency investment platform.

This is a genuine question considering that the cryptocurrency space is often considered merciless.

This reputation is a result of the unforgiving experience of thousands of early-stage investors during the euphoria in the crypto market towards the end of 2017.

Driven by greed and FOMO’s – fear of missing out – feeling, these groups of investors entered the market without even knowing what cryptocurrency was.

They bought lots of bitcoins and other altcoins that had created a buzz on the web.

This action by investors resulted in the development of a bubble around bitcoin, and its price hit an all-time high of $20,000! However, this bubble burst in 2018, and these investors ran into significant losses.

Therefore, before you choose to invest in any crypto, you need to understand the best cryptocurrency investment strategies and use your judgment to determine the one that will work great for you.

Without a doubt, the cryptocurrency market is seen with great expectations for its future.

For you to maximize your returns in future investments, below are some of the best Bitcoin and Ethereum investment strategies you should know.

Long-term Investment

Long-term investing in cryptocurrency is a great crypto investment strategy that shouldn’t be overlooked. It requires buying Bitcoin and Ethereum, then storing them in a secure wallet.

Often, long-term crypto investing involves making a buying decision that is based on long-term and fundamental trends.

The goal is to ultimately sell your cryptos at a significantly higher price than the one you bought it. This strategy is often used by beginner investors since it is simple and easy-to-execute.

Does HODL guarantee profits? Factually, there is no definitive answer on whether long-term investing is the ideal crypto investment strategy for new and experienced investors.

This is because this strategy only when you are able to hold onto your asset until the market prices go up.

Long-term investments are sometimes considered unprofitable because it leaves no chance for maximizing returns when the market goes down.

By sticking to this strategy, you may miss out on some opportunities brought about by other strategies that we will discuss later in this post.

Before deciding to use long-term investing as your cryptocurrency investment strategy, it is imperative to understand whether the coin you are buying is undervalued or overvalued.

Also, since price volatility can and will occur, you need to ride out upturns and downturns and only focus on making profits.

Pros of HODL

  • HODL has been proven to return exponential gains on invested capital, especially during uptrends.
  • It is one of the simplest cryptocurrency investment strategies that can be used by newbies in the crypto world.

Cons of HODL

  • It is not effective during downtrends.
  • It can lead to exponential losses.
  • HODL is not nuanced enough.

Smart Holding

Smart holding is an intermediate to long-term approach to the crypto marketplace. The typical duration of this strategy is measured in years, months, and weeks.

The main goal of this crypto investment strategy is to capitalize on a strong trend.

Entering and exiting the market efficiently, as well as identifying opportunities with adequate risk vs. reward ratios, are integral to the success of smart holding.

In smart holding, you can decide the schedule for buying an asset. You can do so daily, weekly, bi-weekly, monthly, etc.

There are two averaging strategies used in this approach, as shown below:

Dollar-cost Averaging (DCA)

This is a practice where an investor allocates a particular amount of money at regular intervals shorter than a year (mostly monthly or quarterly).

This strategy may include things such as automatic deductions from your paycheck. It is highly effective for investors with lower risk tolerance.

Value Cost Averaging

Investors who rely on this strategy aim at investing more when the crypto price falls and less when the price rises.

This method is highly flexible and allows you to choose when to buy assets.

Pros of Smart Holding

  • It’s one of the most affordable cryptocurrency investment strategies.
  • It allows you to choose when to buy assets; thus preventing cases of bad timing.
  • Allows you to buy assets in small installments; therefore, it minimizes risks and maximizes profits.

Cons of Smart Holding

  • May lead to lower returns.
  • Not effective for new investors.

Cryptocurrency Trading

Cryptocurrency trading often involves speculating on the price movements through a CFD trading account or buying and selling the underlying cryptos via an exchange. This form of online trading is almost similar to trading stocks, commodities, or currencies.

The only difference between crypto trading and others is the high volatility. Most traders, especially newbies, want to get huge profits. With stock trading, for instance, you need to wait for months or years to achieve this.

Cryptocurrency, on the other hand, provides a higher speed of getting returns.

Where Do You Start With Crypto Trading?

The most important thing you need to remember is that it is challenging and nearly impossible to start successful crypto trading without any experience.

If you want to invest in cryptos, you need some basic knowledge. Below are a few things you need to learn:

Analyzing Cryptos

Do you want to invest in Ethereum or Bitcoin? Make sure you understand each coin and how popular it is. When you finally choose the coin, you believe will maximize your profits, choose safe storage.

It is recommended that you find a wallet of high quality, like Tezro.

Get the Tezro App

Using Charts and Quotations

You will need to study market dynamics, and this means you will need to learn how to use charts and quotations.

Opening Deals on Crypto Exchanges

Crypto exchanges provide investors with more opportunities to generate income through cryptocurrencies. We will discuss exchanges later in this article.

What Is CFD Trading On Cryptocurrencies?

One of the most sought-after Bitcoin investment strategies is CFD trading. CFD trading is basically derivatives that enable an investor to speculate on cryptocurrency price movements without having ownership of the underlying assets.

Investors can go “buy” if they think the cryptocurrency prices will shoot or can go “sell” if they think the prices will go down.

Both “buy” and “sell” are leveraged products, and all investors need to do is put up a small deposit known as margin so that they can get full exposure to the underlying market.

Credits: Statista

Pros of Cryptocurrency Trading

  • Offers high opportunities for getting income.
  • Investors can start trading with minimal investments.
  • Through CFD crypto trading, you can trade in any direction – buying is just as accessible as buying.
  • In cryptocurrency trading, you don’t need to have an exchange account to use a special wallet.
  • Crypto trading is available 24/7. You can trade whenever you want!
  • Secure store of value.
  • Universal accessibility – you can access it from any region or country.

Cons of Cryptocurrency Trading

  • You cannot engage in cryptocurrency trading without adequate knowledge.
  • No guaranteed profits.
  • Trading in cryptos comes with a certain degree of risk.

Mining

Cryptocurrency mining is a process whereby transactions between users are verified and added to the blockchain ledger.

The mining process is not only used as a source of income but is also responsible for introducing new coins into the current circulating supply.

It is one of the major elements which permit cryptos to work as decentralized peer-to-peer networks, without the need for control from a central authority or third-party.

Mining is mostly used as a bitcoin investment strategy because bitcoin is regarded as the most popular mineable cryptocurrency. Mining bitcoins is dependent on a consensus algorithm known as Proof of Work.

Crypto mining is costly, painstaking, and sporadically rewarding. However, it is one of the few cryptocurrency investment strategies that have a magnetic appeal for many investors.

This is because miners are rewarded for their hard work with cryptocurrency tokens.

Through mining, investors can earn cryptocurrencies without having to put down money for it. Mining rewards are given to the miners who discover solutions to complex hashing puzzles first.

The probability that you will be the first to find a solution is directly related to the portion of total mining power on a particular network. You will need to invest in Application-specific Integrated Circuit (ASIC) or Graphics Processing Unit (GPU) to set up a mining rig.

Pros of Cryptocurrency Mining

  • You can make money through cryptocurrency mining.
  • Mining is getting cheaper- this is mostly due to the high number of miners who quit due to the crypto crash and the introduction of cloud-based mining.
  • Hardware retains value-if you want to quit mining, you can still sell your hardware and make a significant amount of money.
  • You don’t just make money. You help crypto grow- through mining, you help cryptocurrency become more mainstream. Plus, you contribute to the long-term success of cryptocurrency.

Cons of Cryptocurrency Mining

  • Complexity- getting started is not easy. Even experts in blockchain technology get bamboozled when starting. At the very minimum, you need mining software, a coin wallet, an account with a crypto exchange platform,
    An ASIC chip or a GPU, cooling equipment, and more. Getting all these things up and running is not easy! Be prepared to read lots of guides and make mistakes before getting it right!
  • Electricity costs- Mining cryptocurrency is electricity-intensive. In fact, ecologists believe that this process is having an adverse effect on the environment at an alarming rate.
  • Hardware costs- buying the impressive array of mining hardware required will cost a significant amount of money.
  • Scams- the crypto space is awash with scams, most of which affect the mining industry.
  • You could lose a lot of money- you can make money mining cryptocurrencies, but this is not guaranteed. You could lose money too.

Exchange

A cryptocurrency exchange is a digital marketplace where investors buy and sell digital assets using different altcoins or fiat currencies.

An exchange is basically an online platform that acts as an intermediary between buyers and sellers of the cryptocurrency.

Cryptocurrency exchanges match buyers and sellers. Just like the traditional stock exchange, traders can buy and sell digital coins through a limit order or market order.

When a limit order is set, the investor directs the exchange to trade coins at a price above the current bid or lower than the current ask, depending on whether they are selling or buying.

After a market order is set, the investor authorizes the exchange of their coins at the best prices available in the online market place.

To make money through an exchange, an investor must register with the exchange and undergo a series of varication steps to authenticate his/her identity.

Once the authentication is done, the account is created, and the user can transfer funds to the account before purchasing coins.

Credits: Statista

Pros of Bitcoin Exchange

  • You can actually make money
  • When the prices are good, you can make instantaneous profits
  • There are lots of exchanges and currencies to choose from
  • High-security standards- most exchanges guarantee security to investors’ digital assets
  • Established reliability and trust

Cons of Bitcoin Exchange

  • You need capital to start trading in an exchange platform;
  • There are pretty high exchange fees involved.

FAQs

What Do I Need To Start Investing In Cryptocurrencies?

To start investing in cryptocurrencies, you need to have a few things. They include:

  • Basic information about the cryptocurrency you want to invest in.
  • A digital wallet.
  • A secure connection to the internet.
  • A method of payment, such as debit cards, credit cards, and bank accounts.
  • An account with a cryptocurrency exchange.

How Do I Choose A Cryptocurrency To Invest In?

Before choosing a cryptocurrency to invest in, you need to consider the following factors:

  • Market cap: Market cap ensures liquidity and highly liquid coins perform better.
  • Popularity: How popular and useful a coin is.
  • Valuation: Make sure you research the valuation of a coin to ensure it is not overpriced.
  • Competitors: What does the coin stand when compared to its competitors? This is a question you should answer before choosing the best coin.
  • Demand-supply: Ensure the coin you choose has a higher demand than supply. A rise in demand ensures a rise in value.
Credits: Statista

Are Gains From Cryptocurrency Investments Taxable?

In some countries, the gains from cryptocurrencies are taxable. Therefore you may need to check with your tax authority before investing in these digital assets to avoid future problems.

Is Cryptocurrency Investing Worth It?

Cryptocurrency has higher liquidity than other investments. This means that you can make money quickly with cryptocurrencies than with gold, fiat currencies, and traditional stocks.

Cryptos are scarce, meaning their value will keep rising. As an investor, you need to do your due diligence and find the best coins to invest in. As long as you choose the best investment strategy, there is no reason why you shouldn’t make a kill from cryptos!

Key Takeaways

  • A long-term investment is ideal for starters in the cryptocurrency world.
  • Even though mining is rewarding, it requires more time, effort, and resources. You need to invest a lot in hardware and software before you start mining.
  • Gains from cryptocurrency are taxable in most countries. Make sure you check with your local authorities before investing so that you don’t find yourself on the wrong side of the law.

Conclusion

Investing in cryptocurrency is one of the best decisions you can make. Even though there are some risks present in the crypto market that are not prevalent in traditional financial markets, such as bonds and stocks with high volatility, cryptos are generally safe and have the potential for higher returns.

Over time, more individuals and bigger companies will add cryptos in their portfolios, and the volatility danger will lessen. By investing in tokens today, you are likely to be richly rewarded in no time.

Make sure you do research and choose the best crypto investment strategy to maximize your chances of success. Download Tezro now to start exchanging your cryptocurrencies in a completely safe and encrypted app!

Categories Cryptocurrency

How to Make Money with Cryptocurrency? 8 Best Ways

One of the most searched items by digital currency enthusiasts is how to make money with cryptocurrency. A recent study shows that the crypto space evolves in circles.

The first circle involves a significant increase in the prices of cryptoassets. This drives traditional and social media buzz.

The wide coverage and excitement bring more investors into space and contribute to new ideas, codes, and the development of new projects.

Once this happens, the next circle begins.

Until now, we have seen three crypto circles that peaked in 2011, 2013, and 2017. In every circle, we saw a price fall in every circle.

Despite this, there has been significant growth in social media activity, developer activity, and most startups have joined the crypto space.

Experts project that the next cycle will see a price appreciation thanks to the ever-increasing interest in cryptocurrencies. This will provide investors and traders with effective ways of making money with cryptocurrency.

Wondering how to make money with bitcoin and other cryptocurrencies? Here are some practical ways you can try:

Investing

One of the best ways of making money with Ethereum and other cryptocurrencies is through investing. Investing is basically taking a long-term view by purchasing and holding assets for a particular period of time.

Crypto assets are well suited to the purchase and hold strategy. Generally, they are volatile in the short term, but they have great long-term potential.

Pros of Investing

Cryptocurrency investing comes with several benefits that include the following:

The returns exceed the stock market by big margins

If you invest in the best mutual funds in the market, you could get about an 11% annual return.

Nonetheless, you could get up to 50% annual returns when you invest in cryptocurrencies. Investing is, therefore, a great way of making money trading crypto.

You don’t need to be rich to start investing

The main reason why most people fear investing in cryptocurrency is that they think they need millions of dollars to start. This is far from the truth.

Even though a single bitcoin costs thousands of bucks, you don’t need to buy a whole bitcoin to start making crypto profits.

Bitcoins, just like other cryptocurrencies, are divisible. In fact, they can be divided into 8 decimal points. This means that you can invest with as little as you can afford.

There are free and simple resources to help you learn

If you are worried about not having enough information about investing, don’t worry! There are ample resources online that can help you learn. You can check crypto news sites, blogs or join online forums to find guidance that will give you a perfect starting point.

Liquidity

You probably wouldn’t expect it, but investing in cryptocurrencies is surprisingly liquid. There are many retailers around the world who now accept bitcoins and mother cryptocurrencies as a form of payment.

This means that you can exchange these currencies for physical money or goods faster.

Cons of Investing

Investing in cryptocurrencies is not a bed of roses. It comes with its fair share of cons that include:

You cannot trade in real-time

Investing in cryptocurrencies, including the fastest altcoins, means you must experience wait times.

Some cryptos also demand that you have proof-of-work to have transactions verified, which could take up to 30 minutes depending on the currency you are dealing with.

This is a minor issue but one that could cost you some profits!

The biggest boom has passed

Even though cryptocurrencies keep rising in value, one of the drawbacks of investing in them is that the biggest boom has passed.

However, this doesn’t mean you cannot enjoy cryptocurrency profit if you invest wisely.

Credits: Statista

Security is an issue in crypto

In case you have been paying attention to recent news in the cryptocurrency world, you may have noticed that cybersecurity is a real issue.

Theft and fraud are serious issues with investing in cryptocurrencies.

Be careful before investing in cryptocurrencies, and only make sure you are putting your money in reputable bitcoin wallets.

Trading Cryptocurrencies

If you want to know how to make money off crypto without investing, then trading is a great option.

Some people use the terms “investing” and “trading” interchangeably, but they are entirely different. Investment is a long-term endeavor, while trading seeks to achieve short-term goals.

You will find trading at the helm of most ‘how to make money with cryptocurrency’ lists, but it is not as easy as it sounds. Trading in cryptos requires experience and skills.

To succeed, you must have in-depth knowledge and understanding of blockchain and various projects. Even though this is not required, it is necessary!

By being knowledgeable, skilled, and experienced, you will be able to understand the price action of different cryptocurrencies in the historical context and use that to predict future prices on a short-term basis.

Making money with cryptocurrency through trading requires investors to either buy and sell actual cryptos or use derivatives like contract for difference (CFD).

When you trade-in crypto using CFD, you can speculate the direction of crypto assets’ prices without owning them. CFDs provide a perfect opportunity for traders to make profits from bearish and bullish price movements in underlying digital currencies.

Pros of Trading

Trading in digital currencies has many benefits, including:

High liquidity

Trading in cryptocurrencies, especially using CFDs, allows you to trade on margin, hence providing you with easier execution and greater liquidity.

Finite supply

There is a limit on the number of cryptocurrencies that can be in circulation. Each coin created slows down the creation of another, and the creation process halves after a few years.

This means that the value of cryptocurrencies will continue to rise, and this is good news for traders.

Potentially lucrative money maker

There are people who see chaos in cryptocurrencies, but prudent traders see opportunity.

Due to their volatility, you can easily buy them when the prices are low and sell them when they are high.

Cons of Trading

Some of the disadvantages of trading include:

Security issues

Due to lack of regulatory compliance, trading in cryptocurrency is susceptible to scams and frauds.

High price fluctuations

Short-term fluctuations are bothersome to traders.  The high price volatility of cryptocurrencies makes it challenging for people to use it as a legit form of exchange.

Staking & Lending

If you have previously searched ‘How to make money with cryptocurrency’ on a search engine, staking and lending have probably popped up.

Staking and lending are arguably some of the best ways of making money with altcoins. Staking means locking coins in a crypto wallet and receiving rewards in order to validate transactions on a proof-of-stake network (PoS).

Instead of mining, the algorithm of this network selects transaction validators based on the number of coins committed to the stake. What makes PoS better than mining is because it requires less-expensive hardware.

Additionally, it is more energy-efficient. Cold staking is another way of making money trading cryptocurrency. Here, investors stake coins while holding them in a safe offline wallet.

While staking, you basically lend coins to a network to verify transactions and maintain its security. You can also lend coins to other investors and generate money through interests.

Many platforms facilitate crypto staking and lending, including decentralized finance (DeFi) applications, peer-to-peer lending platforms, and exchanges.

Pros of Staking and Lending

  • Less expensive: when compared to mining, staking and lending don’t require a huge investment in hardware.
  • A faster way of earning with crypto: The interests and rewards accrued through crypto staking and lending can be transferred and withdrawn on a daily basis.

Cons of Staking and Lending

  • Security concerns: staking and lending are also susceptible to theft and fraud.
  • Critical failure losses: If a user losses control of private keys to his wallet, funds can be lost or seized without them having a chance of recovery.

Mining Bitcoin

Mining Bitcoin is a great way to make money with bitcoin. Mining is a critical component of the Proof of Work (PoW) consensus mechanism and one of the oldest ways of making money with cryptocurrency.

It is a process of securing the proof of work network and verifying transactions.

Miners are given new coins through block rewards for successfully completing these functions.

In the past, miners could easily mine bitcoin on a desktop computer, but today, sophisticated hardware is required to achieve this.

Pros of Bitcoin Mining

Some of the benefits of bitcoin mining include:

You can actually make money

One of the biggest benefits of bitcoin mining is that you can make money. Even though money is a motivating factor, you should be cautious before diving into bitcoin mining.

Ensure you understand how to do it, and you have the right equipment to mine the right coins.

Mining is getting more affordable

At the beginning of 2018, Bitcoin mining difficulty dropped by a whopping 15%. This trend keeps happening every year due to a large number of miners quitting.

Even though you may need to incur some costs to purchase the hardware needed, the drop in the cost of mining means you can enjoy more profits.

The rise of cloud mining

One benefit of bitcoin mining is the rise of cloud mining. It lets you mine bitcoins without shelling out on pricey hardware and extortionate power bills.

Hardware retains value

In case you choose to call it quits and focus on other ways of making crypto profits, you can still make a significant amount of money by selling your bitcoin mining hardware.

Credits: Statista

Cons of Bitcoin Mining

It’s not all fun and games, as there are some minor drawbacks of bitcoin mining. Here are some obstacles you might find:

Complexity

Bitcoin mining is not as easy as it sounds. Even those with in-depth knowledge and understanding of blockchain networks might find this undertaking overwhelming.

Electricity costs

If you want to mine bitcoins, make sure you understand what you are getting yourself into because you will part with hundreds of dollars in electricity bills.

Hardware costs

Mining hardware is too expensive, even though it retains its value.

Day Trading

Day Trading is one of the most commonly used cryptocurrency trading strategies. It involves entering and exiting positions on the same trading day.

This strategy is also known as intraday trading since the trading happens on the same day.

The main goal of day traders is to use various intraday trading methods to try and make a profit out of price changes in cryptocurrency.

Successful day traders have experience and have a deep understanding of the market. They use technical analysis to generate trade ideas.

They also use volume price action, technical indicators, and chart patterns to determine entry and exit points for trades.

As with any other trading strategy, risk management is critical in fruitful day trading.

Credits: BitDegree

Pros of Day Trading

24/7 market access: crypto markets are open 24/7

  • Unsophisticated: Even though there are many professional traders participating, trading is not sophisticated, and experienced traders have an edge.
  • Volatility: Swings in crypto prices offer day traders a wide range of opportunities to get more profit.
  • Regulation (or lack thereof): Most exchanges don’t enforce account verifications, and this provides traders with a plethora of opportunities to make money.

Cons of Day Trading

  • Lack of regulations meaning there is no authority to intervene in case of a dispute.
  • Day trading carries a high risk, and there is never a guarantee that you will make money.
  • Day trading is expensive. You need the right hardware and software, as well as ample financial information that will help identify entry and exit points.

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Crypto Social Media

Another way to make money with cryptocurrency is through crypto social media. In 2016, Dan Larimer launched the first blockchain-based social media platform known as Steemit.

This is a platform that rewards users with the native coin, STEEM, for developing and curating content. This platform run into issues in 2017, and the number of users has declined since then.

However, there are many other platforms that have been developed on this idea of rewarding users for creating content. Some of them include Scorum, Sapien, and Narrative.

Pros of Crypto Social Media

  • You don’t just make money. You also develop mutually beneficial networks with like-minded people.
  • Finding people to trade with is super easy.
  • You don’t need to invest in expensive equipment to start trading.

Cons of Crypto Social Media

  • There is a high risk of meeting with scammers and fraudsters
  • There is no guarantee that you will make money through these platforms.

Airdrops and Forks

What are Airdrops and Forks? They are equivalent to being in the right place at the right time.

The first ones are free tokens that are distributed by an exchange to create a larger user base for a project by generating awareness.

Meanwhile, When a blockchain forks, those who hold coins on the original chain are given free tokens on the new network.

For those who want to learn how to make money with cryptocurrency, Airdrops and Forks are ideal.

Pros of Airdrops and Forks

  • You don’t need to make a huge investment to make money from airdrops and forks.
  • Making money through airdrops and forks doesn’t require much time or energy.
  • You don’t need sophisticated equipment to earn rewards through Airdrops and Forks.
Some of the most notable Bitcoin Forks

Cons of Airdrops and Forks

  • There is no guarantee of making money.
  • There are high risks of falling victim to scams and other fraudulent activities.

Can You Get Rich With Cryptocurrency?

Even though it is possible to make money with cryptocurrencies, it is not that easy. Searching for things like ‘how to get rich with cryptocurrency‘ will not help you get rich with cryptocurrency.

To make the best out of it, you need to do deep analysis, attain great skills, get rich experience, and use this article as a guide!

Conclusion

Today, crypto has integrated into the mainstream financial and commercial systems, and it can achieve everything that traditional currency can do.

The innovative nature of cryptocurrency means you can use it to generate wealth in many innovative ways.

With all the ways on how to make money with cryptocurrency outlined above, there is no reason why you should not join the bandwagon of celebrated cryptocurrency moguls.

Plus, as mentioned, there are numerous tools that make the job easier for investors and traders. One of the best ones is Tezro.

Tezro is not only a fully encrypted message app that reduces the risk of security breaches but also has the feature of exchanging crypto assets.

Also, it incorporates tons of cryptocurrencies, such as Bitcoin and Ethereum. Read more about all Tezro features.

Categories Cryptocurrency

What Is The Difference Between Crypto Coin and Token?

The difference between token vs. coin has created a heated discussion among the cryptocurrency community. In fact, “coins” and “tokens” are some of the cryptocurrency terms that are hard to comprehend. Most people use them interchangeably.

There are those who use the term “token” to refer to what others call “coins,” while there are those that use both names to refer to all cryptocurrencies available on the modern market.

It is worth noting that these two terms are different in many aspects. It is important you know what they are before you decide to immerse yourself in the world of cryptocurrency.

This comprehensive article seeks to answer the question: what is the difference between a coin and a token?

We look at each term independently and analyze why there is so much confusion among them. We will also look at examples of each and outline their uses.

Token Vs. Coin: What Is A Coin?

Also known as altcoins or alternative cryptocurrency coins, coins are digital money that is created using encryption methods.

They store value over time. Essentially, coins are the digital equivalent of money.  Transactions of these coins can be made from one party to another. They exist as data on a huge global database.

This database, popularly known as a blockchain, records all transactions and is verified and checked by computers around the globe.

Digital coins are used in the same way as physical coins. If you own digital coins like Litecoin or bitcoin, you can think of them as the coins in your house or wallet.

They have the same features as real money: they are acceptable, portable, fungible, durable, divisible, and scarce.

Credits: CryptoVerze

Unique characteristics of coins

  • They are tied to an open blockchain. This means that anyone can join and participate in the network. However, cryptography protocols are used to ensure all users are pseudonymous.This means that even if your transaction history is available to the public, there is no personal information attached to your wallet address. Simply put, no one can find out your identity in a blockchain network!
  • They may be mined, sent, or received

To better understand what coins are, let us look at Bitcoin.

Bitcoin is based on blockchain technology. This is a distributed and public ledger that ensures all transactions can be seen. Data is collected, stored, and shared among participants of the blockchain network.

Just like other digital coins, Bitcoin reduces the possibility of fraud, and guarantees transparency.

Thanks to their wide acceptance and uses, ambitious crypto enthusiasts believe that coins will replace conventional money in the near future.

How Is A Coin Used?

Factually, digital coins are not meant to perform any other functions beyond acting like money. Yes, coins are used as money, and that’s all!

How Do Digital Coins Work?

Sending and receiving digital coins is like sending an email. To start receiving an email, you need to create an email address and share it with others.

To send an email from the address you created, you need to know your address and the password. This information is confidential and shouldn’t be shared with anyone.

Acquiring coins follows the same method. You are assigned a special address known as a public key. When you get this address, you are then assigned a password known as a private key.

You need both the public and private keys to send and receive digital coins. These two keys are confidential and shouldn’t be shared with others.

For the avoidance of doubt, it is worth mentioning that coins don’t entirely function the same way as emails. For instance, you get to pick your email and password when creating an email.

However, public and private keys are assigned to you. These keys are linked together using a complex algorithm to ensure they link up to the same account. Also, unlike when creating an email, you don’t provide your personal information to set up private and public keys.

When you lose this information, you cannot regain access to your coins by validating your identity.

Digital coin transactions do not take place instantaneously. This is because records are kept on multiple systems, and they take time to validate transactions and agree to include them in the blockchain.

Digital coin users pay some fees for sending coins to other users. Fees vary significantly depending on the coin used. The high demand for these coins may lead to an increase in these fees.

Examples of Coins

There are hundreds of coins available on the crypto market today. They include:

  • Stellar (XLM)
  • Ripple (XRP)
  • Cardano (ADA)
  • NEO (NEO)
  • Monero (XMR)
  • Dash
  • Ether
  • …and more!

Credits: Bitcoin.com

Token Vs. Coin: What Is A Token?

The topic of coin vs. token cryptocurrency, and most people, including crypto experts, tend to refer to tokens as digital coins. This is not right!

Tokens are digital assets that are issued by a project. They can be used as a mode of payment inside a project’s ecosystem.

They perform a similar function with coins, but the main difference is that tokens give the holder the right to participate in the network.

Individuals and businesses may provide digital tokens to raise funds for an array of projects, including software, alternative cryptoassets, and a myriad of other products and services.

Companies or individuals promoting digital tokens can promise high returns to investors, but you need to be careful when investing in them.

If you don’t invest with caution, you may be at risk of losing your hard-earned money.

Credits: Citowise

Initial Digital Token Offering Explained

Digital token offering is managed over the web, and it allows people to visit a website and buy digital tokens using fiat currency and other cryptoassets such as ether or bitcoin.

The digital tokens provided may have a laid-out future use, such as allowing buyers to use them as alternative crypto assets or give them future access to a particular digital platform.

Before we dive deeper into the difference between coin and token, there are a few things you need to consider before participating in a digital coin offering. They include the following:

Digital tokens are securities

Most, if not all, sales of digital tokens are subject to regulations involving the sale of securities.

In case you purchase digital tokens whose value is tied to future profits or the success of a company, they will be considered a security.

Therefore, ensure you ask questions and request relevant documentation before you invest.

Digital tokens have limited use

Digital tokens may have limited use, and you may not be able to use them as you would with digital coins. In fact, if the company selling digital tokens doesn’t achieve its goals with money raised from selling digital tokens, the tokens might have no use.

Therefore, you need to know that investing in digital tokens is like buying a promise that a company will deliver a product or service in the future. You may need to wait for months or even years before your investment bears any fruits.

Types of Tokens

There are different types of tokens. Here are some examples.

Utility Tokens

Utility tokens are also known as application tokens. They are sold to fund the development of a cryptocurrency and can later be used to purchase goods or services offered by the issuer.

Some examples of utility tokens include Civic, Timicoin, Sirin Labs Token, Golem, Siacoin, Filecon, and more.

When looking at cryptocurrency token vs. coin, utility tokens should not be confused with coins such as Litecoin, Monero, Bitcoin, and more.

This is because they are not mineable and are often based on third-party blockchain. Similar to coins, utility tokens are valued for their inherent functions and properties.

Non-fungible Tokens

Non-fungible tokens (NFT) are tokens that contain identifying information recorded in their smart contracts. Unlike fungible tokens such as bitcoin, non-fungible tokens are not divisible.

This means that you cannot send part of the token to someone else. Every non-fungible token has unique information stored in its smart contract.

Therefore, NFT cannot be directly replaced by another token. What makes them unique is that they are linked to a specific asset. They can be utilized to prove ownership of digital and physical assets.

They are not traded on standard cryptocurrency exchanges. Instead, they are sold or bought on digital market places such as Openbazaar.

Examples of non-fungible tokens include domain names, game items, event tickets, digital art, collectibles, ownership records of physical assets, and more.

Credit: Medium.com

Security Tokens

These are tokens that equate to an ownership stake in a business. When you invest in security tokens, you are doing it with the intention that its value will be derived from the value of the business or its future dividends/profits.

Today, there are many systems, regulations, and valuation methodologies for doing security tokens. This makes them restrictive on who can buy them. In the US, for instance, you need to be an accredited investor to purchase security tokens.

This means you must have an income of over $200,000 or have a net worth of at least $1 million. Of course, laws vary depending on the country, but in most cases, they are treated as traditional securities.

Credits: SwissBorg.com

Key Differences between Coin and Token

There many factors we can use to differentiate crypto coins vs. tokens. They include:

Definition

After reading this article to this point, it is evident that understanding the difference between token vs. coin is as difficult as most people believe.

Understanding the difference between the two starts by knowing what each one of them means. Coins are native to their own blockchain, while tokens are built on another blockchain.

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Usage

Coins are used as money. However, some coins have other uses.  They are utilized as a stake to validate transactions and can be used to fuel token transactions and smart contracts.

On the other hand, tokens are created to be utilized as dAPPs, and their function depends on the application they are built on.

In some cases, they are used to reward users with things such as access to future platforms, discounted fees, goods and services, and more. In other cases, they are for particular features such as voting rights.

Note: Coins can be used to buy tokens, but tokens cannot be used to buy coins.

Complexity

Creating a token is much easier than creating a coin. When creating coins, you need to solve complex mathematical problems through a process known as mining.

Mining is a complicated process that requires special software, hardware, and other computer resources to achieve. It is basically verifying transactions that happen on a blockchain.

As a reward for verifying transactions, miners are rewarded with coins. Mining is one of the most popular ways of making money, but it is not as simple as it used to be a few years ago.

Therefore, instead of mining, some crypto experts choose to get coins from exchange services.

The process of creating tokens is easy. You don’t have to create a new code or modify an existing one. All you need to do is use a standard template that is found in platforms such as Ethereum.

These templates are blockchain-based, and they allow anyone to create tokens by following a few basic steps. Using templates to create tokens offers smooth interoperability – and this allows users to store different tokens in a single wallet.

Key Takeaways

  • Crypto coins and crypto tokens are all used to refer to cryptocurrencies in general. Additionally, there are people who use “tokens” to refer to “coins” and vice versa. However, these two terms are different.
  • The main difference between token vs. coin is that coins are native to their blockchain while tokens are built on existing blockchain like Ethereum.
  • Coins are only used as money, but tokens have an array of uses based on a project‘s ecosystem.
  • Coins can be used to buy tokens, but tokens cannot be used to buy coins.

Conclusion

For most people in the cryptocurrency world, the discussion of coin vs. cryptocurrency or token vs. coin is not given much attention because it is perceived as the same thing.

Fundamentally, these two rather confusing terms are different. Perhaps the most basic explanation or that difference is that tokens are built on an existing blockchain while coins are native to their blockchain.

When talking about tokens vs. coins, it is worth noting that they share one significant similarity – they are both high-risk investments that can be high on rewards.

This is what makes them appealing. In particular, tokens can be very rewarding if you invest in the right initial coin offering (ICO).

Nonetheless, to make the best out of both coins and tokens, you need to do research before making an investment.

Also, re-reading this article to better understand the difference between crypto coin vs. token can be rewarding.

Finally, don’t forget that one of the best services that allow you to store multiple coins and exchange crypto assets is Tezro. Download our app and read more here about the full list of features!