10 Cryptocurrency Facts That Every Investor Should Know
26 Oct 2020
Reading Time: 2-3 minutes
Venturing into investments is always a gamble. It’s essential to have as much information as possible before going pocket-deep into anything, and cryptocurrency is no different. With more and more people starting to gain an interest in crypto as an investment, we’re determined to make sure that you have everything you need to know about cryptocurrency before jumping into big decisions.
That said, here are 10 facts about cryptocurrency that every investor–including you–should know about!
You might be wondering what is cryptocurrency. It takes the shape of digital tokens–decentralized virtual currencies that aren’t controlled by a single entity. It’s a huge selling point for anyone interested in a cashless society. Cryptocurrency is stored in blockchains and can be obtained through various means–such as mining or staking–depending on how the network operates.
Bitcoin started as an anonymously-written white paper in 2008 and fully came into fruition in 2009. A big turning point in Bitcoin evolution is when it made it to the cryptocurrency exchanges in 2010, finally giving BTC a fiat value equivalent. In 2017, Bitcoin entered a bubble where it rose to $20,000 USD almost overnight due to an explosive increase in mainstream interest. This event became the catalyst for governments to start looking into and regulating cryptocurrency.
3. The fall of Bitcoin
An interesting fact about how cryptocurrency works is how it’s prone to volatility, or fluctuations and instability in price. Tokens rely on public interest and real-world events to stay relevant and go up in value. So if a major government were to suddenly raise regulations against crypto, it’s likely for prices to spike down due to panic selling. That’s what happened to Bitcoin in 2013 after the Chinese government started cracking down on cryptocurrency. Prices fell by 20-30% overnight!
4. The 2020 halving event
Every 4 years, Bitcoin has a halving event that reduces the mining reward per block by 50%. On May 18, 2020, the reward per block was reduced from 12.5 BTC to 6.25 BTC. But it doesn’t change the processing power required to mine the network’s Proof-of-Work (PoW) model. So if you’re a miner, your electricity bills won’t change, but the possible reward will severely be reduced. This is done to ensure the longevity of BTC’s supply, as there can only be 21 million coins in existence. On the bright side, Bitcoin’s price has been increasing, so each BTC you receive will be higher in value.
One of the most interesting cryptocurrency facts that you must know is the existence of stablecoins, which are tokens that gain value by being pegged to another asset, such as gold or the American dollar. This relationship makes stablecoins, as its name suggests, stable, and not susceptible to the volatility of the market. They’re useful tools for cryptocurrency trading for beginners and seasoned investors alike, as you can trade any coin (such as BTC) for a stablecoin to escape market risk without converting to fiat currency.
6. Real-world uses
If you’re not familiar with how cryptocurrency works, you might think that they’re purely virtual assets that have no use in the “real world.” But crypto is a currency with an actual store of value, which means that you can trade it for goods and services–just like fiat money! While most countries regulate cryptocurrency use and don’t consider it legal tender, most allow merchants to accept crypto as a payment option to their personal discretion. In places like Japan, you can buy a cocktail with Bitcoin–if the establishment accepts it!
Unlike Bitcoin, which only has one use as a digital payment system, Ethereum is a jack of all trades. It’s a digital payment system and a platform for developers to build decentralized applications and tokens–all in one network. In fact, a lot of the top altcoins on the market, including EOS and VeChain, started out as ERC-20 tokens on the Ethereum blockchain! Many altcoins are following Ethereum’s trend by building robust systems that can solve both online and offline issues. From an investors’ perspective, it pays to closely watch these coins, as relevance often results in a spike in value.
8. Crypto Research Report (CRR)
The most recent CRR has predicted that all major cryptocurrencies will increase in value over the next 5-10 years.
9. Easy to buy
Cryptocurrency has an exceptionally low barrier-of-entry, which means that it’s not difficult to get into with the right knowledge and resources. If you’re not sure how to buy cryptocurrency, all you need to do is to set up a crypto wallet, find a cryptocurrency exchange, and start trading. Unlike forex trading, where you need to hire a broker to close trades for you, crypto exchanges are straightforward and open to anyone. We recommend starting out with Coinbase as it’s an easy-to-use and safe platform that has become an industry standard.
10. Easy to track
You can track cryptocurrency prices and related market information on an hourly basis using our website. Go to our main page where we track every cryptocurrency and have all their past performances on record. Historical data is important in helping you make better investment decisions, as you can track how each token performed over the years.
Cryptocurrency is an exciting and fast-moving investment opportunity that has attracted some of Wall Street’s most wealthy figures. Now is always the best time to jump in on the bandwagon and start investing.
But while excitement may run high, you should also be aware that like any other investment, cryptocurrency isn’t a risk-free venture. Exercise caution when making big decisions–watch out for the latest news, don’t fall for volatile spikes, and remember that looking at the long-term is key when holding onto coins.
With new GPUs coming out, versions that were more suitable for mining in recent years are now cheaper.