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Cryptocurrency for Beginners

In the early days of its launch in  thousands of bitcoins were used to get a pizza. Ever since then, the cryptocurrency's meteoric rise to in April 2021, after its heart-stopping drop in mid- by about 70 percent to around boggles your head of several people - cyptocurrency investors, traders or simply the plain curious who missed the boat.

How all of it began

Bear in mind that dissatisfaction with the current financial system gave rise to the development of the digital currency. The development of the cryptocurrency is dependant on blockchain technology by Satoshi Nakamoto, a pseudonym apparently utilized by a developer or band of developers.

Notwithstanding the numerous opinions predicting the death of cryptocurrency, bitcoin's performance has inspired many other digital currencies, especially in recent years. The success with crowdfunding attributable to the blockchain fever also attracted those out to scam the unsuspecting public and it's arrived at the interest of regulators.

Beyond bitcoin

Bitcoin has inspired the launching of several other digital currencies, There are now more than 1,000 versions of digital coins or tokens. Not these are exactly the same and their values vary greatly, as do their liquidity.

Coins, altcoins and tokens

It'd suffice at this point to say there are fine distinctions between coins, altcoins and tokens. Altcoins or alternative coins generally describes other than the pioneering bitcoin, although altcoins like ethereum, litecoin, ripple, dogecoin and dash are regarded as in the 'main' category of coins, meaning they are traded in more cryptocurrency exchanges.

Coins serve as a currency or store of value whereas tokens offer asset or utility uses, a good example being a blockchain service for supply chain management to validate and track wine products from winery to the consumer.

A point out note is that tokens or coins with low value offer upside opportunities but don't expect similar meteoric increases like bitcoin. To put it differently, the lesser known tokens might be easy to get but may be difficult to sell.

Before engaging in a cryptocurrency, begin by studying the worthiness proposition and technological considerations viz-a-viz the commercial strategies outlined in the white paper accompanying each initial coin offering or ICO.

For those familiar with stocks and shares, it is not unlike initial  Bitcoin ATM   public offering or IPO. However, IPOs are issued by companies with tangible assets and a small business track record. It's all done in just a regulated environment. On the other hand, an ICO relies purely on a notion proposed in a bright paper by a business - yet to be in operation and without assets - that is trying to find funds to begin up.

Unregulated, so buyers beware

'One cannot regulated what's unknown' probably sums up the situation with digital currency. Regulators and regulations continue to be wanting to meet up with cryptocurrencies which are continuously evolving. The golden rule in the crypto space is 'caveat emptor', let the customer beware.

Some countries are keeping an open mind adopting a hands-off policy for cryptocurrencies and blockchain applications, while keeping an eye on outright scams. Yet you will find regulators in other countries more worried about the cons than pros of digital money. Regulators generally realise the necessity to strike a balance and some are looking at existing laws on securities to try to have a handle on the numerous flavours of cryptocurrencies globally.

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