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Questions Answered About Cryptocurrency

Question marks (Pixabay) 

If you've been sitting around and wondering "What is cryptocurrency? Why do I keep hearing about it? and How is this secured? All of these are good questions and concerns that someone should have before getting into a rapid market like cryptocurrency.

Cryptocurrency (often referred to as crypto)  is essentially decentralized virtual cash. When I say decentralized, I mean no government owns it. Instead, it's owned and maintained by the people. The people "mine" new coins of a particular crypto. It must also be noted that there isn't just cryptocurrency, there's plenty of them out there to choose from, however, some of the most well known and profitable ones are Bitcoin, Litecoin, Ethereum, and Dash.

It must be noted that anyone who's going to invest anything, into this market must be aware that you can lose your investment so quickly it's not even funny. I mean this literally, take the price of Bitcoin, for example, it has gone up and down slightly over the past few days but overall stayed consistent above the $15,000 CAD mark.

However, some people think that Bitcoin is due for a crash soon. If it does end up crashing some people's investments might not be so good anymore. A crash of the price when it's so high seems like a distant dream but it's very possible. Some of the things that can help bring on a cryptocurrencies crash could be the overall loss of interest from the general public. This doesn't seem like the case for Bitcoin since it's incredibly popular.

The reason you keep hearing about Crypto is for two reasons. The first one is that it keeps getting the attention of the media, this is mainly because of insane price increases. It was bound to be both broadcasted and written about when Bitcoin managed to hit $22,000 CAD. The second is partly reliant on the first. The reason it's reliant on the first one is that new people get into crypto when they've heard about it on the news. The second half of the reason is that these people then go and talk about crypto to get others into it. In total, these two things can get so many people into such a new market.

Another question you might have is that, how do these cryptocurrencies even prevent counterfeit coins. Well, there's a simple answer to that. Blockchain, it prevents anyone from saying they have a certain number of coins when they don't. It's made up of many computers keeping a ledger of all the transactions and all the amounts that people have. Keep in mind that every computer needs to have a full list of these transactions. This is what helps keep cryptocurrencies so secure.

By Michael Normandin

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