Do you know what digital coins are? What about bitcoin? This one you must have heard. Expressive valuations, people putting a piece of money in their pockets. But is it all worth it? Before you decide to invest in this innovation, you need to better understand how these revolutionary digital coins work. They are at all times in the vehicles of communication and it is almost impossible to ignore their presence in our daily lives. Thanks to the interest related to the investment in the currency that is growing, it is necessary to also look at the risks and safety aspects of the system.
Okay then. Let’s go to what matters. There are more than a thousand crypto-coins, and that number continues to increase. Many of them have emerged recently and, from time to time, can take a giant leap forward, such as bitcoin or ethereum. I want to bring you, in this article, an explanation of this market and show that it has a lot of potential for the next few years.
Bitcoin: the father of the cryptocurrencies
Bitcoin, the digital currency that has most valued until today, came in 2009, and was created by a programmer identified by the pseudonym Satoshi Nakamoto. It was not the first attempt to file a strong crypto. Before it, others existed, but it was only with Bitcoin that the market actually formed. As a consequence, other crypto-coins appeared as derivations of bitcoin. Although they were different in aspects like method of mining, validation and technology as a whole, in one way or another, they all came from the same source.
Unlike “real” currencies, it is not controlled by a central bank, but produced in a decentralized way by thousands of computers. In so-called mining, the process of birth of a bitcoin, the computers connected to the network compete with each other to solve mathematical problems. Whoever wins receives an amount of the coin as a reward. From the technology of bitcoin, we had a whole new system being born and, consequently, other crypto-coins as bitcoin alternatives.
Why invest in digital coins?
If you’ve ever read anything about digital coins, you may have heard someone telling you how bitcoin and crypto-coins are a farce, pyramid scheme, or a big bubble, about to explode. As much as haters love to speak badly, there is a world of problem-solving possibilities through crypto-coins. Bitcoin emerged in the first instance to solve the serious problem of centralization of economic power in the traditional financial system.
The world’s first major digital currency took its first steps at the same time as the breakdown of Lehman Brothers and one of the biggest financial crises in history, where even consolidated banks were forced to close their doors. We need to understand that by delegating power and control over money to large financial institutions, we are putting the fate of the economy in the hands of an organ. With such unpredictability, how can we trust that our money is safe in the hands of the government and the big banks? It was primarily motivated by these issues that Bitcoin emerged and developed.
The global crypto-currency market does not stop. You can buy and sell for 7 days a week, 24 hours a day, unlike the stock market, which obeys a specific agenda in each country. Despite being a very recent market, it offers high liquidity to its main assets. There are millions of people around the world trading at the same time. Moreover, because it is a currency without borders, it is above a country’s economic and political problems.