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Cryptocurrency

What is cryptocurrency?

A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Essentially, cryptocurrencies are limited entries in a database that no one can change unless specific conditions are fulfilled.

There are several types of wallets. Software wallets connect to the network and allow spending bitcoins in addition to holding the credentials that prove ownership. Software wallets can be split further in two categories: full clients and lightweight clients.

Instead of a tangible piece of currency you can take with you, a cryptocurrency is a digital asset that can be exchanged. The "crypto" part stems from the use of cryptography for security and verification purposes during transactions.

In using cryptocurrency for an exchange instead of fiat currency, crypto owners don't have to rely on banks to facilitate transactions, and can successfully avoid the fees that come with using financial institutions.

Generally, cryptocurrency transactions are processed and completed via a blockchain network. Blockchains are designed to be decentralized, and so every computer connected to the network must successfully confirm the transaction before it's able to be processed. Ideally this creates a safer transaction for everyone involved. It can also lead to you waiting awhile; one big complaint about Bitcoin is how long it can take for a transaction to go through.

Cryptocurrency transactions are put into a "block," and the computers in the network get to work solving a complex mathematical problem. Once a computer solves it, the solution is shown to the others on the network, and if the whole network is in agreement that this solution is correct, that block is added to the chain and the transaction is completed. Multiple transactions in one block makes it harder to edit a single transaction; the network is constantly re-confirming the blockchain on its way to the latest block and will notice should a suspicious edit be made to one transaction in a block.Because cryptocurrencies must be mined, there is a finite amount of them that can exist.

Is Cryptocurrency Safe?

If you're careful, cautious and make the right choices, yes, cryptocurrency is very safe. Doing cold storage (keeping your wallet offline via a paper wallet or unplugged hardware wallet) can keep your cryptocurrency offline. Keep your computer updated and protected. Do as much research as you possibly can before deciding on a cryptocurrency and the exchange you purchase it from.

Cryptocurrency Merits

  • Uses cryptography for security therefore is difficult to counterfeit
  • It is not issued by any central authority rendering it theoretically immune to government interference or manipulation
  • Allows for secure payments of online transactions
  • Easier to transfer funds directly between two parties in a transaction
  • Uses blockchain technology to store an online ledger of all the transactions that have been conducted
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Why invest in digital currency?

The cryptocurrency market has been growing at an exponential rate with an influx of capital, driven by young savvy investors. This is much more than a bubble, we are witnessing the beginning of a new digital economy. More than an investment, cryptocurrencies are an ongoing technology and socioeconomic experiment. As a result, the blockchain space is booming with new opportunities. With an approximate market cap of $280 billion, rest assured that this industry is here to stay. This new industry is constantly evolving, therefore the earlier you get acquainted with it, the higher your chance are of benefiting from its future development.

Investing in cryptocurrencies can be intimidating but this is the very reason why you should be invested! Don’t wait for the heard, be a pioneer and learn and invest in digital currencies now and reap the rewards!

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