A Beginner’s Guide to the Crypto Craze

You have heard the term; you have seen the headlines blowing up your news feed. It all comes with a promise of quick returns on easy investments. You guessed it right. We are talking about cryptocurrency and trading in it. One of the most famous forms of cryptocurrency is Bitcoin. It hit the headlines big time in 2017 when it generated exponential profits.

What most people don’t know is that Bitcoin is not all that new. It has been around since 2009 although it became a household name later in this decade. According to Forbes magazine, if one had invested just $1000 when Bitcoin started, the value would have increased to  £36.7 million by the end of 2017. It is at this point where it captured the attention of the whole world. By now almost everyone knows about cryptocurrency and is talking about these numbers. But do you know the basics of what it exactly is? Or are you too embarrassed to ask because you are late to join the bandwagon? Not to worry, we have got you covered. Read on to find out more about every question you ever had about the ABCs of cryptocurrency:

What does cryptocurrency even mean?

These are units of currency that are traded on the stock exchange, just like your average rupees or pounds or dollars. Only that they are not issued by the central bank, so the trading is not regulated by the government. These units are encrypted end to end, so the trading does not require any third-party payment gateways like PayPal that we are normally used to.

Then why all this hype?

The answer to this question relates to the previous one. Since these units are not issued by any central bank, the government has no say in who you are trading with, and how much money is involved. Expect unlimited autonomy, and trade away!

Also, thanks to the encryption, you do not need to disclose your identity or any personal information in order to trade. This makes it one of the rare trade exchanges that is perfectly legal but won’t have the tax authorities knocking down your door anytime soon.

How does this crypto trading actually work?

Trading in cryptocurrency takes place through blockchain technology. In simple words, blockchain technology is like a digital accounts book. Just like anybody can open a real accounts book and get a complete picture of the trade, with the help of blockchain technology you and your trading partners can access all the transaction records at any time. Rest assured, with crypto trading, you can breathe easy without the fear of being blindsided by your partners.

Is this all that Blockchain does for me?

Blockchain makes your life easier in a number of ways. This digitized way of record keeping on a cloud system totally eliminates the need for real people to work on, and maintain, an accounting system. Imagine the amount of salary those people needed to be paid, and how much that added to transaction costs. Now you need to pay nothing for transaction costs, and the net result is that the amount of money in your pocket is much more than if you had traded in mainstream currencies.

Is the crypto picture really all this rosy?

Umm…. No. The same features that make it advantageous are the ones that got cryptocurrency into a tight spot. The encrypted procedure requires no ID proof. It is a no-brainer that a lot of illegal transactions takes place. The government of many countries is now hot on its heels for these reasons. While a few countries like USA, Canada and Australia have granted it legal status, Russia is one of the major economies that has refused to accord legal status to cryptocurrencies. The government of India is still on the fence regarding the same.

But hey, as they say, every rose has its thorn!