Cryptocurrencies first came onto the financial scene in 2009 following the launch
of Bitcoin, the world’s first ever decentralised digital currency. Now, the
cryptocurrency market has grown considerably with over a thousand different
digital coins now in circulation. In this article, we’ll introduce the basic idea behind
cryptocurrencies as both a currency and an investment.
WHAT ARE CRYPTOCURRENCIES?
Cryptocurrencies are an entirely digital form of exchange, characterized by a few
key features. Firstly, all transactions happen online, and they are encrypted.
Secondly, all transactions are carried out and verified via a decentralised network,
and there is no central authority (i.e. a government). Thirdly, all transactions are
anonymous and carried out with minimal fees. And finally, once a transaction is
made it is permanently recorded and cannot be undone. The technology behind
cryptocurrencies is known as blockchain technology.
WHAT CRYPTOCURRENCIES ARE THERE?
With so many on the market, it’s hard to name just a few. Some of the most wellknown cryptocurrencies include Bitcoin, Ethereum, Tether, Litecoin, Ripple,
Monero, and Cardano.
WHY DO PEOPLE INVEST IN CRYPTO?
Cryptocurrencies are an interesting investment for many reasons. Firstly, supply is
often limited. That means that if demand for a cryptocurrency goes up, the value
of it could go up too. Secondly, it is also quite a volatile market and prices can
change very suddenly.
That means, for active and risky-savvy investors at least, there are a lot of
opportunities to trade. Finally, with new coins being launched all the time,
cryptocurrencies can sometimes simply be an exciting investment for those
interested in the future of technology and finance.
HOW DO PEOPLE INVEST IN CRYPTOCURRENCIES?
Many people invest in cryptocurrencies directly via a cryptocurrency exchange.
They can purchase a cryptocurrency using a fiat currency (e.g. GBP, USD, or EUR),
or they can trade one cryptocurrency for another. The choices available will
depend on the cryptocurrency exchange they choose. Some people also trade
cryptocurrency CFDs via an online trading broker.
WHAT NEXT FOR THE CRYPTOCURRENCY MARKET?
With more big players looking to move into the cryptocurrency space, 2022 could
be an interesting year for the market. If you think you might need help staying on
top of cryptocurrency trends, why not sign up for our free Telegram channel? We
provided helpful information about new projects, as well as all the latest
cryptocurrency market news.