What is this thing about cryptocurrency news and Bitcoins doing the rounds nowadays?
After reading this beginner guide for cryptocurrencies, It will no longer seem cryptic to you.
You can get beyond the overwhelming buzz of news channels reporting about this geeky, fuzzy and complicated subject which has assumed phenomenal significance all over the world.
Here’s getting the basics sorted:
What is cryptocurrency?
Putting it simply, cryptocurrency is a digital currency that requires high-level encryption i.e. cryptography, for its creation, transfer or any form of transaction. Cryptocurrency is now considered as an alternative currency or digital currency. While you may wonder about the physical existence, it is worthwhile to state that these are virtual assets and no physical entities.
Bitcoin, which has grabbed the lion’s share of the media hype and attention, was the first cryptocurrency created back in 2009. Today there are several others too like Ethereum, Ripple and these are commonly referred to as “altcoins”.
Can you use cryptocurrency like you use cash?
No. Unlike normal cash, you can’t exchange cryptocurrency for gold or other commodities.
Unlike our traditional currency and banking systems which is governed by a central authority- the bank, cryptocurrencies do not belong to any centralized governing body and are not subject to regulatory mechanisms.
Another thing grabbing news headlines today is ICO.
Initial Coin Offerings (ICO) is the newest way to raise funds for brand new cryptocurrency ventures by start-ups. It is more of a crowdfunding scheme where newly launched crypto or digital tokens are sold as part of the initial offering to interested investors. Investors buy these crypto tokens in exchange for already existing cryptocurrencies like Bitcoin.
You can buy Bitcoins in India from various platforms, of which such as Uncoin and Zebpay are two of the most popular service providers.
Don’t you think ICO and IPO sound similar? Well, there’s a catch.
An ICO you will not let you own a stake of the start-up company in which you invest. It is more of a speculation, where you stand chances of making more money if its worth appreciates in future. But in an Initial Public Offering (IPO) the company offers a share of its ownership to the investors.
Owing to their unregulated mechanisms, ICOs have been regarded as speculative and high-risk investments by various countries including the USA and UK. In many cases, these are scams where investors can be duped easily since there are no legitimate rules to protect them financially.
Still interested to invest in an ICO? How would you know when the next token sale is ON?
Simple. Just register for ICO alerts to stay informed about any ongoing or upcoming token sale for an ICO.
Whether it is for investing in an ICO or to buy Bitcoins in India, the best way to stay abreast of all things happening in the crypto community would be through ICO alerts.
However, it is advisable that you gather as much knowledge about ICOs as possible before investing, so that you can steer clear of shady schemes of fake cryptocurrencies.