Crypto TREND 2017-01
Everyone has heard how Bitcoin and other cryptocurrencies have made millionaires out of those who bought it just a year ago. Gains of 1000% or more are not only possible, but have been commonplace with many of these cryptocurrencies. Someone who bought Bitcoin in May 2016 for less than $500 would have made a 1400% profit in about 17 months. Then, in the last few days, we saw Bitcoin lose almost $1,000, so to say that these crypto currencies are volatile would be a gross understatement.
Since Bitcoin’s inception in 2008, we at Trend News have been skeptical of the survivability of cryptocurrencies, as they present a very clear threat to governments that want to see and tax all transactions. But while we may still be wary of actual cryptocurrencies, we are well aware of the potential of the underlying technology that powers these electronic currencies. In fact, we believe that this technology will be a major disruptor in the way data is managed, affecting all sectors of the global economy, much like the Internet impacted media.
Here are some questions and answers to get you started…
Q: What are cryptocurrencies?
The best known cryptocurrency (CC) is BITCOIN. It was the first CC, started in 2008. Today there are more than 800 CCs, including Ethereum, Litecoin, Dash, Zcash, Ripple, Monero, and they are all “virtual”. There are no “physical” coins or coins.
Q: How do CCs work?
CCs are virtual currencies that exist in very large distributed databases. These databases use BLOCKCHAIN technology. Because each Blockchain database is widely distributed, it is believed to be immune to hacking as there is no central point of attack and every transaction is visible to everyone on the network. Each CC has a group of administrators, often called “miners”, who validate transactions. A CC called Ethereum uses “smart contracts” to validate transactions. Crypto TREND will provide more details in upcoming news posts.
Q: What is BLOCKCHAIN?
Blockchain is the technology that underpins all CCs. Each CC’s purchase, sale or exchange transaction is entered into a BLOCK that is added to the chain. This technology is complex and will not be explained here, but it has the potential to revolutionize the financial services industry as transactions can be executed quickly and easily, with fees reduced or eliminated. The technology is also being examined for applications in many other industries.
Q: Are CC Exchanges regulated by the government?
For the most part, the answer is NO, which for some users is a huge draw of this market. It’s the “wild west” right now, but governments in most developed countries are looking at this market to decide what regulation may be needed. A big decision is whether to treat CC as a currency or as a commodity/value. Canada and the US have so far stated that CCs are legal, however the situation remains fluid regarding tax and reporting implications. Crypto TREND will follow and report on these developments.
Q: How do I invest in this market?
You can buy, sell and trade CC using the services of specialized “exchanges” that act as a brokerage. You start by selecting an exchange, setting up an account, and transferring fiat currency to your account. You can then place your CC BUY and SELL orders. There are many exchanges around the world. Opening an account is quite simple and all of these exchanges have their own rules about initial funding and withdrawals.
Crypto TREND will recommend CC Exchanges in the future.
Q: Where do I keep my CC?
In order to have the freedom to move your cryptocurrency and pay bills, you will need to have a digital wallet. These wallets come in various formats such as desktop, cloud-based, hardware (USB), mobile phone, and paper. Many of them are FREE, however security is an important factor as no one wants to lose their wallet or have it stolen. Crypto TREND will recommend digital wallets in the future.
Q: What can I do with my CC?
In addition to investing in CC products, you can also use cryptocurrency for some financial transactions, such as money transfers and bill payments. The list of companies that accept cryptocurrency is growing rapidly and includes big companies like Microsoft, GAP, JC Penny, Expedia, Shopify, Bloomberg.com, Dish Network, Zynga, Subway, and WordPress.
Q: What’s next?
As we started, we will keep each of the Crypto TREND articles brief and keep the scope of each one as limited as possible. As we noted above, we believe that cryptocurrency technology will be a game changer and that potential investment opportunities like this come around once or twice in a lifetime. Make no mistake, early investment in this sector will only be for your most speculative capital, money you can afford to lose.
Even if you don’t want to invest right now, gaining an early understanding of this disruptive new technology will put you in an advantageous position to benefit from our recommendations as we move forward.
Expect to see more specific Crypto TREND news and recommendations as we begin this journey into what may at first seem like a foreign jungle. This is a volatile market and it may not appeal to all investors, however Crypto TREND will be your guide when you are ready.