CAREER + MONEY

11 THINGS YOU NEED TO KNOW ABOUT CRYPTOCURRENCY

Before you start investing in cryptocurrencies, first, you need to understand the technology and use case.

06.05.2021
BY STORTER BEL
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In the past few weeks, since two of the biggest cryptocurrencies by market cap Bitcoin and Ethereum reached all-time-high, you probably heard all the normies talk about investing in crypto for the very first time. But have you ever actually taken a deep dive and done your own research on what cryptocurrency is? 

Israel Keys, Founder & CEO at Bloom, one of the first licensed cryptocurrency exchanges under the Central Bank of the Philippines shared important knowledge about cryptocurrency. 

Understanding blockchain

Based on the name, the word blockchain describes how the information is structured and stored. Its information is linked or chained in a sequence. 

 

The technology used cryptography or mathematical techniques to encrypt information thus it's very secure. These techniques are used to block the chain and make them tamper-proof and the information could not be changed. Combining cryptography and decentralization makes the information stored in a blockchain system safer compared to the traditional method.

The positive aspect of crypto

Okay, since its information is immutable and tamper-proof, it's a great way to store financial or monetary information. As they could protect from any malicious network. 

What it's like mining bitcoin

Mining Bitcoin is used to coordinate the recording of information on the blockchain and mint or create new coins. And yes, there are a bigger number of Bitcoin out there. There is currently 18 million Bitcoin in circulation, with new coins minted for every 10 mins. So, this newly minted coin was to solve the cryptographic problem, as the algorithm is to stop new coins at 21 million.

Why Bitcoin is the most famous cryptocurrency

It was the first cryptocurrency so it definitely has a reputable name compared to others. Additionally, it was the first cryptocurrency that solved the “double-spend” problem. What it means, people could not spend more than what they have, which is a good strategy. 

What you need to know before investing in cryptocurrency

The cryptocurrency market is volatile. According to Israel, the keys are prudent and necessary for a long-term investment. So Israel advised spending a little amount of money on cryptocurrency if you have it, for example, US$200 worth of Bitcoin on the 20th of each month. 

Why people are accepting cryptocurrency

With cryptocurrency, you could buy it, or even trade it. There are at least 10,000 cryptocurrencies listed on Coin Market Cap, that’s a lot of choices. But again, for now, there are no other innovations but it’s interesting to see them. 

Why Crypto has been popular for remittance

When transferring money, you might realize that you need intermediaries. But with cryptocurrency, the number of intermediaries involved in transferring money is decreasing. Additionally, cryptocurrency has been popular in other countries too. 

How tax work on cryptocurrency

Someone would be taxed there is a gain on the trade. So if a cryptocurrency is bought and sold, the tax would be applicable for different events. 

What are hot and cold wallets?

This is important. The meaning of a hot wallet is a cryptocurrency that is stored online, meanwhile, when it is stored in hard drives it is called cold wallets. Or sometimes they are on hardware wallets, or signing devices.

The keys to cryptocurrency world

Your crypto is stored in a blockchain and what you could do when you have cold storage devices are the keys to accessing it. So you could create a transaction from it or even move your crypto. Your key should not be shared with anyone unless you want to. 

Tips for people to save their cryptocurrency

You could save it just like your non-crypto money. You would not carry your entire money, right? So you could hire someone to use cold-storage devices and multiple signatures.

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