People all over the world rave about digital currencies being the ultimate investment option that can help reap most financial benefits to investors. While you may have heard all about cryptocurrencies, such as bitcoins, here’s all you need to know about how virtual currency tradings function, and whether they’re really worth the hype.
What is crypto?
Cryptocurrency is a form of digital currency that is secured by cryptography. Fundamentally, “crypto” as a prefix means ‘vault’ or ‘hidden’ whereas the suffix “-graphy” stands for ‘writing.’ Cryptocurrencies are decentralised networks that allow secure payments online. They are denominated in terms of virtual tokens which are represented by ledger entries enforced by a disparate network of computers that are internal to the system i.e. blockchain technology.
Crypto as a term refers to several encryption algorithms and cryptographic techniques which safeguard the information and communications through the use of codes, public-private key pairs, elliptical curve encryption, and hashing functions. This enables protection in a way that ensures the information is available for reading or processing only for whom it is intended.
What makes cryptocurrencies so popular?
- When central banks manage monetary supply, over time they tend to reduce the value of money via inflation. A distinct feature of cryptocurrencies is that they are generally not issued by a central authority, which theoretically renders them immune to any kind of government manipulation or interference
- Most people view cryptocurrencies as the ultimate currencies that may dominate the future, and recommend purchasing them today, presumably before they become more valuable or used commonly as a means of financial transactions
- Some speculators on the other hand have no interest in the cryptocurrencies’ long-term acceptance as their interest solely lies in the fact that they can gain attractive profits when increased in value
- Solid technologies behind the cryptocurrencies, such as the blockchain technology is touted more secure than traditional payment systems as it’s a decentralised processing and recording system
- In a nutshell, cryptocurrencies are deemed promising for their divisibility, portability, transparency and inflation resistance
How many cryptocurrency types exist and what are they worth?
According to a popular market research website CoinMarketCap.com, more than 6700 different types of cryptocurrencies are traded publicly, and they continue to proliferate, raising money through the initial coin offerings (ICOs). An estimate in February 2021 suggests that the total value of cryptocurrencies was over $1.6 trillion, with the bitcoins amounting to about $969.6 billion (CoinMarketCap).
Steps to know before purchasing cryptocurrencies
Let’s try to understand the basics every first-time investor or beginner should know about investing in cryptocurrencies:
STEP 1: Get a wallet
The first step towards investing in crypto is to get your hands on a digital wallet that virtually stores the digital currency and more importantly, helps keep track of all the transactions. Multiple types of wallets are available, and all allow a lot of freedom and flexibility along with a greater inflow of revenue.
STEP 2: Connect wallet with a bank account
The investor needs to connect their wallet to a credit/debit card and bank account to purchase the cryptocurrencies. Once the user links their bank account to the wallet, they can easily buy or sell the digital currencies.
STEP 3: Link a cryptocurrency exchange
Different cryptocurrency exchanges vary in processing fees, reliability, cryptocurrency availability, reputation, exchange rates, and security for trading. New investors should research well before fixing an exchange platform, and devise a concrete plan and strategy. Most importantly newbie investors require assistance of an experienced professional who can guide you through this step-by-step process, so that you can turn your far-fetched dreams into reality.
Waqar Zaka, the renowned TV host of reality show ‘Living on the edge’ has started a cryptocurrency online academy that simplifies these concepts for the average person. If you are at a loss when it comes to understanding bitcoin or are clueless on how to earn from crytocurrencies, merely join Waqar Zaka’s online teaching course on Facebook by following these simple instructions.
To fulfil his bitcoin vision, prominent social activist, in 2018, launched Pakistan’s first block-chain powered global micro-finance platform TenUp.I.O. Similar to trading stocks, dealing with cryptocurrencies requires ample patience and time to master. Waqar Zaka, via his online academy guides the participants on how to enter into the world of NFT (non-fungible token) to DeFi (decentralized finance), how to avoid common mistakes and lastly, how to work towards their short/long-term goals.
Are cryptocurrencies legal?
They’re unquestionably legalised in the United States, but are essentially banned in Saudi Arabia and some other countries. Hence, their legality depends on each individual country. Although they’re not officially legal in Pakistan yet, revolutionary steps are being taken by Waqar Zaka and Zia Ullah Bangash, who have been actively raising their voice in the provincial assembly to legalise cryptocurrency.
Waqar efficaciously convinced KP government for allowing him to run crypto mining farm, and as per the latest developments, mining machines running on hydropower have been installed in the KP region. Earlier this month, the first meeting of the Advisory Committee for cryptocurrency and crypto mining commenced in KP. The committee reviewed and discussed the necessary steps to legalise and regulate the necessary legislations in regards to cryptocurrencies.