By- Jenesa Weck
The cryptocurrency market has surged to record highs this week, with Bitcoin, Solana, Dogecoin and Ethereum being the hot buzzwords driving the frenzy and creating new crypto millionaires at a rapid rate. But for novice investors, cryptocurrencies might seem daunting, so here is a guide to help explain this often-misunderstood market and introduce some of the unique offerings – from Bitcoin to HUH Token.
Cryptocurrencies are digital assets that can be held on to as investments, used in transactions or even online purchases. These digital currencies are secured by cryptography, which makes it nearly impossible to counterfeit and makes transactions more reliable and secure, preventing double spending.
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Cryptocurrencies do not physically exist, meaning that you can’t pick up a Bitcoin and hold it in your hand. And unlike the US Dollar or British Pound, there is no central authority that maintains the value of a cryptocurrency. Instead, these tasks are broadly distributed via the internet among a cryptocurrency’s users. This is why cryptocurrencies are often referred to as “decentralised”.
These digital currencies are made up of unique lines of code which means they can’t be copied and makes them easy to track and identify as they’re traded, improving transparency.
How it works
Instead of being run by a central authority such as a government, cryptocurrencies run across a chain of computers and exchanged from peer-to-peer on the web without a middleman.
This means no government or bank manages how they’re made, what their value is, or how they will be exchanged. All the crypto transactions are secured by cryptography, which means it only allows the sender and intended recipient of a message to view its contents.
Explaining the Blockchain
The Blockchain is a digital ledger of transactions distributed across the entire network of computer systems and it’s this technology that enables the existence of cryptocurrency. Think of it like a ledger that shows the entire history of transactions for that cryptocurrency. This helps improve transparency and security.
Also Read: Tips for Investing In Cryptocurrency
Simply put, it is a system of recording information that makes it nearly impossible to hack. The Blockchain contains all transactions, and every time a new transaction occurs on it, a record of that transaction is added to every participant’s ledger.
What makes a Blockchain unique is that it is not owned by a single person or entity and the idea is that because no one controls the blockchain, they cannot take over and rewrite the records – making it more secure.
Before buying cryptocurrency, you will need a wallet
Cryptocurrency can be stored in something called a ‘wallet’ which stores the private keys (similar to a unique password) that gives the user access to their cryptocurrencies. The cryptocurrency coins are stored on the blockchain and a private key is required to authorise transfers of those coins to another person’s wallet.
Cryptocurrencies are digital assets that can be held on to as investments, used in transactions or even online purchases.Unsplash
There are different types of crypto wallets available that cater to different requirements in terms of security, reliability and accessibility. Some of these are as basic as using an app like Binance or Coinbase, or for extra security there are physical electronic devices that can be used as wallets to store the crypto keys. However, most users would probably use apps similar to TrustWallet or Lumi as they are easier to use, but are less secure.
How to buy cryptocurrency
Similar to the stock market, the cryptocurrency market has exchanges or brokers which are the facilitators and often charge a fee or commission for each transaction. This policy differs with each exchange.
Some of the top crypto exchanges are Binance, Coinbase, PancakeSwap and Uniswap.
Cryptocurrency can be purchased fractionally. For example, if you’re willing to buy a Ethereum coin you don’t need to buy a full coin to own some. You can buy a fraction of it and own as little as 0.00000001 ETH.
What types of cryptocurrencies exist?
Bitcoin is by far the most traded cryptocurrency and has more than double the market capitalization than its closest rival, Ethereum. But there are plenty of “alternative coins” on the market and new ones are being launched frequently. Each of these cryptos try to offer different features or functions.
Cryptos like Cardano, Solana and Polkadot are focused on providing retailers with a crypto that can perform transactions at faster speeds and lower costs that Bitcoin or Ethereum can offer, hence their recent popularity.
But not all cryptocurrencies are “useful”. Dogecoin, for example, was created as a joke, referencing a well-known meme of a dog. This crypto gained popularity through social media and is seen as largely community driven. Meaning it has no inherent value and is only valuable because its investors decided to attribute value to it. As is the chaotic nature of the crypto craze – sometimes pure popularity is valuable in and of itself because it leads to more investors buying the crypto, which raises the price and makes it more valuable.
New cryptocurrencies are constantly being launched and sometimes it can be obscenely rewarding to invest in these cryptos before anyone else hears about them. This was certainly the case with another meme coin called Shiba Inu, which has appreciated in value by 70,000% since its launch earlier this year.
An example of a new “meme” cryptocurrency that is about to launch on the 6th of December is HUH Token. Its creators have called it a “Utimeme” cryptocurrency as it combines the idea of a meme coin with unique utilities. Currently in its pre-sale stage, the novel thing about this cryptocurrency is its potentially game changing referral scheme. It works by giving investors who purchase HUH tokens for the first time a unique code. This code can be given to any new potential investor. When this new investor purchases HUH Tokens using this referral code the person who gifted the code receives ten percent of that purchase.
HUH Token will be available on popular crypto exchanges PancakeSwap and Uniswap.
The rest is up to you
As you can see there is a plethora of cryptocurrencies to invest in and equally as many opportunities to make or lose money.
It is always worth reiterating that cryptocurrencies are extremely volatile and very unpredictable. Huge fortunes have been won but fortunes have also been lost.
However, one thing that has been made clear this week with the record rise in the crypto market is that cryptocurrencies are here to stay and exposure to this market, in one form or another, will be necessary for any investment portfolio of the future.
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