It is the hype of the moment: dealing in cryptocurrency/crypto coins. More and more people are becoming interested in trading in these digital payment instruments. Perhaps because of this hype, your interest is also awakened, and you are also curious how to act in cryptocurrency. However, you have no idea what this is, or where to start.
For this, I have put together this ultimate crash course cryptocurrency. In 5 tips I explain to you exactly how you start trading in digital currencies, what you have to pay attention to, and which mistakes you should avoid. That way you can also make money with dealing in cryptocurrency!
How does cryptocurrency work?
But how exactly does that work, a 'digital currency' (crypto coins)? The biggest difference with normal money is that it is decentralized.
Normally a central authority keeps track of where the money goes. This can be a bank, but also a system like PayPal. All payments pass through this central authority so that a payment system usually always depends on this.
Previously it was thought that a decentralized payment system was not possible, because all parts of a network would then always have the same information. Satoshi Nakamoto (the inventor of Bitcoin) changed this. Via the so-called blockchain principle, the data is continuously updated at all users.
This has a number of consequences:
Payments via cryptocurrency are anonymous. Your identity is not linked to blockchain payment systems. Different cryptocurrency differs in the amount of transaction information that they reveal.
You can pay quickly and internationally. Through cryptocurrency, you can always make a transaction quickly, whether the recipient lives next to you or on the other side of the world.
Cryptocurrency is resistant to fraud. If a hacker tries to change a transaction, this is only done 'in one place'. Because this is only one of the millions of blockchain databases, the majority of these databases 'refuse' the hacker's change. He would, therefore, have to hack millions of databases at once - which is impossible.
Cryptocurrency is very safe. It is already in the name - cryptocurrency comes from cryptographic currency or encrypted money. The currency is encrypted so well that it can not actually be hacked. Payments with cryptocurrency are also irreversible. Cryptocurrency is as safe as your 'wallet' (your online wallet for cryptocurrency).