Chances are that you’ve probably already heard about this “money of the future” – cryptocurrency. But, do you actually know what cryptocurrency really is? No? Well, you came to the right place. Here, we’ll do our best to bring the world of cryptocurrency closer to you. We will explore different types of currencies, various reasons behind their popularity and ways you can make them work in your favor.
So, buckle up, get your reading glasses on and let’s dive right into the world of cryptocurrency, Bitcoin, and blockchain.
1. What Is Cryptocurrency?
Starting right at the beginning is usually the best way to go, so let’s first see what cryptocurrency actually is. As the name itself suggests, cryptocurrency is a worldwide phenomenon that’s rising in popularity fast. It is a digital currency that uses various encryption techniques to regulate the generation of units and verify transactions using the blockchain technology. And the best part is – it is completely independent of any bank- or government- imposed regulations. There are some fun facts about cryptocurrency, you should know about.
2. How Did Cryptocurrency Come To Be?
Cryptocurrency was invented by a mysterious person (or group of people) that goes by the pseudonym Satoshi Nakamoto. They were the ones that created the first-ever cryptocurrency – Bitcoin – back in 2008. Now, while Bitcoin is not the first-ever attempt at creating cryptocurrency (B-Money and Bit Gold were actually the first attempts) it is the first one that was fully developed. The idea behind it was to create a decentralized cash system and a public ledger that will be completely independent of any bank or government.
3. Crypto Offered New Opportunities
As such, cryptocurrencies opened new doors and possibilities in the business world. Many businesspeople started embracing the idea of using Bitcoin and other cryptocurrencies for transactions. This offered them a chance to present their audience and customers with an additional dose of convenience, by offering them yet another method of payment. Another perk of accepting cryptocurrency as a payment medium is the fact that this type of transaction is processed fairly quickly, and the currencies have the same value and are accepted worldwide. Finally, cryptocurrencies reduce the chances of fraud and chargebacks because they are comparable to cash in the sense that you either have the funds available or you don’t. Thanks to the blockchain technology, it is next to impossible to spend more “money” than you actually own, because it verifies your funds before the actual purchase is complete.
The Initial Struggles
Now, since the only way you were able to obtain Bitcoin was through so-called mining – the process of gathering Bitcoin through the blockchain technology – and since it has never been traded with before, it was virtually impossible to assign a monetary value to the cryptocurrency units. It wasn’t until 2010, when someone decided to sell the cryptocurrencies they have managed to mine (all 10,000 of them) for two large pizzas, that Bitcoin was valued for the first time.
How To Accept Cryptocurrency?
Before you actually start accepting cryptocurrency, you will need to set up a merchant wallet account, integrate crypto options in your POS system and link all the transactions with the appropriate accounting software. Additionally, you will also need to generate your personal QR code which your customers will be able to scan in order to send you their coins. Finally, treat crypto revenue as coin transaction and make sure you check with the IRS for best practices when paying taxes is concerned.
4. Types Of Cryptocurrencies
Now, in order to proceed, we should also identify the types of cryptocurrencies. The biggest distinction is made between coins and tokens. This basically means that a cryptocurrency can only be one or the other. The most important thing to mention is that coins (Bitcoin, Ethereum and Ripple, to name just the most popular ones) have their own blockchain – a peer-to-peer network that records transactions on a digital ledger. On the other hand, tokens do not have their own blockchain. Simply put, coins function as currency and tokens only represent the access to a product or “stock”.
5. What Can You Do With Crypto?
Thanks to their huge popularity, cryptocurrencies became a very sought-after medium for trading, especially in the business world. Now, there are two ways businesspeople, and especially entrepreneurs, can get involved with cryptocurrency – they can either choose to buy and sell them, or choose to trade them via a reputable forex trading platform. When buying and selling crypto is concerned, it’s important to use hardware “wallets”, dedicated software and, of course, find an interested buyer. With trading, on the other hand, you can opt for spread betting or contract for difference (CFD), where you don’t actually have to own any cryptocurrency yourself. Rather, you simply speculate on prices rising and falling and invest accordingly.
Cryptocurrency Conclusion
With the emergence of Bitcoin, as well as the blockchain technology behind it, the world was introduced to the digital currency market. Although still unregulated and highly volatile, the cryptocurrency market is favoring increased popularity. With future developments in the field of blockchain technology, cryptocurrencies are bound to experience vast changes and new advancements. However, the future of crypto and blockchain is still quite uncertain, and the only thing left to do is to wait and see how the events will unfold.
I hope you enjoyed this blog post about what everyone should know about cryptocurrencies, Bitcoin, and blockchain currency.
Interested in more articles about Bitcoin and crypto?
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