A cryptocurrency is a digital form of money that can be sent to anyone through blockchain technology. You can hold this digital token in your wallet with no intermediaries, allowing you to use your coins as you wish. Australians are becoming increasingly vested in cryptocurrency but without being conscious of the risks involved in this electronic money and scammers often try to trick people into investing in fake opportunities to buy crypto.
The cryptocurrency began in the early 2000s when the first coin to make its mark in cyberspace was Bitcoin. Allegedly, it was created by Satoshi Nakamoto, a person (or a group of individuals) whose identity has never been revealed.
The digital currency works on the concept of cryptography, where each token is created by a code with the help of data that is stored in blocks linked to each other. This system is known as blockchain technology.
Fred Schebesta is the co-founder of Finder.com.au and he says,
“Blockchain is a public ledger, it’ like an accounting book of debits and credits essentially that keeps track of tokens. In some of these cases, these tokens are representative of cryptocurrencies and the blockchain is essentially a way in which you can track that.”
Blockchain technology was invented in the 1980s. This technology has proven to be efficient in tracking money and has gained trust among those in the cryptocurrency market.
A cryptocurrency can be created by anyone, thus there are thousands of them circulating in cyberspace with some of the most popular ones being Bitcoin, Ethereum, Litecoin and Dogecoin.
These coins are used for trading, purchases, payment systems and for most- it’s also a form of investment. Some cryptocurrencies like Bitcoin allow you to withdraw cash from ATMs with very low transaction fees.
If you want to buy a token you can do so with traditional money and depending on the market rates, the value of your token can increase or decrease.
Many people have made profits, and some are claiming to have become millionaires after investing in cryptocurrency.
But can you really make huge profits with small investments in intangible cyber systems?
Mr Schebesta says the possibilities are endless when it comes to making a profit with cryptocurrency.
“Just with anything, you've done your research you can buy an asset and you can become wealthy. And I think with cryptocurrency, in particular, it's definitely been shown that many people have… bought cryptocurrency. If you bought it say at the start of the year you put in a significant amount of money and it has gone up tremendously. And I personally definitely know people who have become millionaires because of cryptocurrency.”
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