Ever since Bitcoin peaked in late 2017, everyone has been wanting to get their hands on cryptocurrency as it’s now considered by everyone to be a ‘Get Rich Quick’ scheme. But not a lot of people actually understand what Cryptocurrency(CC) is all about. Let’s try and decode it together.

So, what is it really?

For lack of a better term, CC is basically ‘Online Money’ or ‘Virtual Money’. Bitcoin, Ether , Litecoin etc. are basically the equivalent of currencies — like USD,CAD, GBP etc. If you’re a bit of a computer nerd ( I say that in a good way, of course) , CC is basically limited entries in a database that cannot be changed unless a very specific set of conditions are fulfilled. We’ll try to address these conditions at a later stage.

Why Cryptocurrency?

1. Protection against fraud — since there are only limited stash of virtual money (yes, I used the word — stash) and each ‘coin’ is encrypted and identified against an owner, you cannot counterfeit them or reverse them. #Protection #Safety
2. No more hacking — It’s obviously very difficult to hack this system since the coins are limited and the information isn’t stored in one ledger but in a distributed form in ledgers/machines around the world
3. No government regulations — because everyone loves a little rebellion
4. No exchange rates — so one coin in USA will be worth the same as one coin in Ghana.

That sounds great, so what’s the problem exactly?

Glad you asked. Of course, there are problems that need to be addressed. Let’s try and understand them here.

1. Bogus CC schemes — Because of no regulations (there you go, anarchist!) anyone can launch an ICO (basically an IPO for CC) and introduce CC tokens (or coins). They can exaggerate it’s worth, luring investors to buy them at premium prices and then simply dump them. There’s nothing anybody can do about it.
2. Price Fluctuations — CC prices are prone to excessive volatility. The marketplace works pretty much like a stockmarket where someone can easily influence the price if they have enough number of coins.
3. Transcation delays — While the underlying blockchain technology (the distributed ledger system we talked about, remember?) is supposed to speed up the transactions, the system is plagued by scalability issues, not to mention an array of delays in verification and approval of trading accounts.

Cool, Tell Me More….

Easy there, Tiger! CC cannot be learnt and understood in a day. Take time , do your research and invest carefully. Follow this series for more information on how to invest and red-flags to watch out for.

So, What Do I Do?

Do your own research but rely on the experts. Use a secure trading platform like https://ndax.io/ for secure buying and selling of digital currency.