You shouldn’t invest in an ICO that doesn’t have anything to offer. If a company makes the initial coin offering or want to make money for cryptocurrency, they should have an actual product. You need some guidance on Cryptocurrency.
Everyone knows about Bitcoin, but there are a ton of other currencies out there. If you have prior knowledge of cryptocurrency, then you are at the mercy of your trader. To help you avoid a disastrous loss, here are a few important aspects you should know about cryptocurrency before investing:
Learn the Difference Between Pseudo-Anonymous and Anonymous Currencies
Bitcoin is a Pseudo-Anonymous Cryptocurrency. It means you are not completely anonymous. While other users can’t find your name, IP address and other important info, the law enforcement agencies can easily obtain this information to track you down.
Anonymous or Fully Anonymous Currency safekeeps this information so no one can track you down, not even law enforcement. These currencies are BYTECOIN, ZCash, Dash and others.
These Currencies are Not Issued or Regulated by Your Government
Cryptocurrency is defined as a medium of exchange that uses cryptography to make secure transactions and control the production of new units. This currency only exists in the digital work and has no physical form.
These currencies lack intrinsic value, these share such characteristics with fiat currencies which are issues and regulated by Government Bodies. Central banks own gold but their currency is not backed by gold because it can’t be converted to gold if asked. The value of a fiat currency works on supply and demand.
How Cryptocurrency is More Valuable?
Devaluing a currency reduces its purchases power. This means the currency will buy few products or services. This lose of power makes the currency’s owner poorer. But why banks devalue a currency? They do for the following reasons:
To Cheapen a Nation’s Export
Expanding export helps the economy grow regardless devaluing the currency makes imports expensive.
Make it Easy for Debtors to Service Their Loans
As a currency loses value, it leads to inflation or loss of purchasing power. The price of goods and services rise with decline in purchasing power. A Rise in wages can help the debtor to service their debt with monthly payments.
How Cryptocurrency is Different?
As no cryptocurrency is not being produced or regulated by a central bank, they have no control over its value. This means the currency won’t lose value according to their will. Crypto stands for cryptography, it’s a technology which makes the information safe and invisible to attackers. It was a way to send and receive secret messages in history.
This technology is used in different ways, including cryptocurrency. Every cryptocurrency is created with tech controlling its production and safekeeping transactions, all while hiding the user’s identity. Every cryptocurrency has its own way of conducting these features.
Moreover, these traits have a key role in determining the value of a currency. Therefore, if you want to start trading in these currencies, company them first. Refer to a Top Coins List to find the currency that suits you best.