IS BITCOIN RISKY? ?
What You Need to Know Before You Invest By Siloh Moses
C REALVEGASMAGAZINE.COM
ryptocurrency is a digital and decentralized type of currency. Cryptocurrencies may be used to purchase and sell items and many investors have also seen their potential to retain and increase value.
60
There’s this new digital coin being talked about at backyard barbeques, most likely, by the crazy uncle who always seems to be into something new. Today, it’s Bitcoin. Have you heard of it? Probably so! Bitcoin is a type of digital currency called cryptocurrency and today there are dozens of different cryptocurrencies. Bitcoin is the most popular — and the most original — established in 2009. Ethereum, XRP, and Bitcoin Cash are other common cryptocurrencies. Each currency has a distinct purpose: some are intended for usage instead of cash, and others are meant for private, direct transactions.
Cryptocurrencies are completely digital, so there is no actual currency or fiat linked to your purchase. Instead, owners hold their currency in a digital wallet and purchase or sell it online. Your wallet may be online (some major exchanges like Coinbase offer an in-app wallet) or offline saved on a USBlike hardware device. Decentralization is a key bitcoin principle. While a central bank supports most currencies – for example, the US dollar is supported by the US government’s “full trust and loan” – its users maintain and value cryptocurrencies on a decentralized ledger where cryptocurrency transactions are recorded.
So, is Bitcoin Risky? In order to answer that question, we first must understand the elements of Bitcoin’s platform (such as Blockchain) on which the cryptocurrency is based.
The Blockchain is a decentralized platform, (meaning not owned by any one central organization like a bank or central government), a digital public directory used for and to keep store of data transactions regarding cryptocurrencies. Every data transaction is recorded by a Node (a networked computer) and those nodes are responsible for recording and completing transactions on the blockchain. The reason it’s called the ‘blockchain’ is because every transaction is recorded in a data block that is time stamped with the transactional data. These blocks of information are strung together linking one block to another; hence, the name ‘blockchain.’
These Cryptocurrency blockchainplatforms have the following characteristics:
