Cryptocurrency remains a hot topic in the world of finance and technology. However, only some fully understand what it is and how it works.
You’re at the right place if you need quick facts about cryptocurrency. Cryptocurrencies are digital currencies that use cryptography for security instead of relying on central banks or governments as their source of value. People use them to make payments online or offline, and they have grown in popularity over recent years.
The most well-known cryptocurrencies include Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP). All three are currently ranked among the top 10 largest market caps, with Bitcoin being number one.
Cryptocurrencies work without intermediaries or centralized control by creating a decentralized network where all transactions occur. Because of this, they are becoming increasingly popular with individuals and businesses who want to avoid having their personal information hacked or mishandled.
Here we’ll take a look at five unusual facts to know about cryptocurrency.
You Can Trade Cryptocurrencies
Though this practice is prevalent among crypto users, as a newbie, you might be surprised that you can trade your cryptocurrency. Trading is buying an asset from someone else so you can sell it later at a higher price. This is short selling because you borrow the currency and then sell it.
There’s no restriction on how often you can do this, but you’re charged interest on every trade you make. In some cases, you may even lose money if the price drops.
Trading platforms like Finixio AI allow you to buy and sell cryptocurrency through traditional trading methods quickly. Some platforms often offer free trades until you make large monthly purchases.
However, be careful while trading, as you can quickly lose money. If you need help understanding the risks, seek professional advice before starting.
Some Countries Don’t Allow Cryptocurrencies
Although cryptocurrency seems everywhere globally, some countries have banned its use. These countries are taking steps to crack down on digital currencies. In some cases, they’re banning crypto trading altogether, while others restrict how people can buy and sell cryptocurrencies.
In China, for example, people can face severe consequences for using cryptocurrencies. The country has banned initial coin offerings and shut down local exchanges.
While many other countries have yet to take such drastic measures, they’ve also banned cryptocurrencies. Further, many countries are trying to regulate cryptocurrencies, but it will likely take time before they become widely accepted.
Bitcoin Amounts Are Limited
When Satoshi Nakamoto created bitcoin, he didn’t set out to make a limitless amount of money. Instead, he designed it to only ever increase by 21 million units. That means there will never be more than 21 million bitcoins.
This limit was implemented because Nakamoto wanted to ensure that bitcoin would always remain scarce. He believed that limiting the supply would keep the value high.
However, as more people start investing in cryptocurrencies, the total supply could grow beyond this point. While this has yet to happen, the supply could exceed 21 million coins. If this happens, the value of each unit could drop dramatically.
Over 15000 Cryptocurrencies Exist
According to recent research, more than 15,000 different cryptocurrencies exist. That number includes everything from stable coins to privacy-oriented coins. And while most people think of BTC and ETH when they hear “cryptocurrency,” others are vying for attention.
Though you can’t buy all of them, they exist, and some need their wallets. Some of them are even used to paying for things online. You might see them advertised on YouTube or mentioned in news articles.
So many coins and tokens exist because creating a new cryptocurrency is relatively simple. All you need is a name, a whitepaper, and a website to issue it. Then, once you’ve got those three pieces of the puzzle, you start building up interest in the project. While you won’t necessarily be able to buy every single one on an exchange, keep an eye on what’s happening in the space.
Crypto Prices Are Unstable
Cryptocurrencies differ from fiat currencies because they’re decentralized and don’t rely on the government to issue money. Instead, individuals mine cryptocurrency across the globe. This decentralization allows for greater security and transparency. However, it has made cryptocurrencies much less stable than traditional money.
Prices fluctuate wildly, often by double digits over short periods. For instance, if someone buys a lot of bitcoins, the price increases. But if fewer people invest, then the price drops. So, because the market is growing doesn’t mean everyone is making money.
The same goes for the opposite scenario. If no one wants to buy bitcoin, the price also drops. The volatility isn’t limited to individual coins; it extends to the whole cryptocurrency market.
The volatility of cryptocurrencies can make investing in them difficult. So, if you want to invest in crypto, consider buying some now and holding onto them for long-term growth. You’ll avoid potential crashes and won’t worry about losing everything you’ve invested.
Cryptocurrencies have grown in popularity over the past few years. They offer investors a way to get involved with the digital economy without dealing with banks or governments. But just like any investment, you should do your homework before putting your hard-earned cash into something.