Bitcoin is the most commonly known name of cryptocurrency however, people associate that name with all 'digital' currency.
There are hundreds of different types of digital currency besides Bitcoin. While Bitcoin is the first and oldest digital coin, the many other coins and tokens that have followed in its wake has spawned a market that now rivals the stock market. This market never closes and operates 24/7 and has operated under everyone's nose for years before going mainstream. People unfamiliar with digital currencies are shocked to hear one Bitcoin is worth 14 thousand dollars.
While other coins may not currently hold the same value as Bitcoin, every digital coin and token have values ranging from just 1 satoshi, which is the name of the individual units that make up a Bitcoin. One hundred million satoshis form a full Bitcoin and on some exchanges, values for coins are posted in US dollars however on other exchanges the price of other coins is represented in satoshis rather than US dollars that most of the world is familiar with. This is where most people get hung up with the value of digital currency because when the price of Bitcoin changes, the amount of satoshis that a coin is worth changes while its value can remain the same.
At the time of this writing with the Bitcoin price hovering at just over 14 thousand, 74 satoshis equal 1 penny. This means that if the price of a Bitcoin falls, the amount of satoshis that would be equal to a penny would increase and similarly if the price goes up, less are needed to make that penny. When the price jumps there are traders who wait to see when the price dips because of the corresponding value of Bitcoin hoping to capitalize on using less of their satoshis to buy coins.
One way to correlate this that is familiar to people is that someone with Bitcoin has more buying power as the price rises and vice versa.
Since the meteoric rise in Bitcoin this year has brought more attention to the digital currency world, more people are getting involved in buying, selling,trading and lending of crypto currencies. This has resulted in a "crypto boon' where all but the worst coins have risen in value as more money is brought to the market and more and more coins are being bought and traded.
Anyone who has an interest in digital currency has their own goals when it comes to investing their time and money into the cryptocurrency world.
As the name implies, this group of people invested in digital currencies seek to obtain their digital coins and tokens and HODL or hold on for dear life. They invest their money, time or computer equipment to obtaining their digital currency coins and hold onto them. Whether the price of their coin rises or falls, their coins are meant for holding into their portfolio and look forward to the price rising and HODL through bear and bull markets and only look to sell or trade their coins when they feel they've reached the value they've determined its reached the value they desire before selling, if they sell at all and continue to hold.
One recent example of a quick rise in value among many (other than Bitcoin) is Einsteinium or EMC2 Coin. This coin went from 900 satoshis in value on November 15th and as of December 6th, EMC2 coin is now hovering around 19,000 satoshis. While these types of rises aren't always common, it's an example of the potential rise in value of cryptocurrency.
Day & Night Traders
This is a wider group of people vested into cryptocurrency that uses their resources to invest and make trades to increase the amount of value in their portfolios. Buy low and sell high is the mantra in life and digital currency is no exception. Traders are constantly watching the market and looking to buy coins at what they think is the lowest price they can get before a 'pump' that raises the value and then sells, again at a value they perceive to be as high of a price they can get before another 'dip' in price. There are big and small traders and even small traders can profit from this but timing is crucial in these sorts of trades and if not done correctly, traders can lose value to their portfolio as well and you should never risk more than you're willing to lose.
This group is focused on lending their digital currency in order to receive interest on the amount of coins they lend out. At the exchange Poloniex, users have the option to loan out 12 different coins at and the user can stipulate how many days and how much interest they want to lend their coins at. It's very easy to lend coins at lower interest amounts however when markets spike and a keen eye, loans can be started at higher interest rates resulting in more profit. I've had one instance where I've personally loaned out Bitcoin and received 15 dollars in Bitcoin in 4 days, though that's the exception rather than the norm.
Bitconnect allows users to lend out amounts over $100 dollars and gives users a varying small interest rate every day, however to get their capital back, a user who starts a loan won't receive their initial capital back for 299 days. There is a 50/50 split in the crypto world regarding Bitconnect. There are many places that call the site a scam, ponzi type of site that gives interest to users from capital of new users.
However, there are numerous posts throughout the internet from users who praise the site, have seen a return on their investment and are making money. In the interest of finding out for myself, I have started a loan for $100 dollars and have been tracking the process. Stay tuned for our ongoing report on Bitconnect, Remember, any site that promises to double, triple or give you thousands of percent back on your investment are a scam 99.9999% of the time and if you decide to jump in on a band wagon, only do so with with funds you're willing to lose.
Decide For Yourself
The examples above of digital currency users all take some form of risk when investing in digital currency. before investing it's always important to understand the environment before investing before taking the plunge. We will go more in depth on these methods of using digital currency and the 'hunters' in upcoming articles at Blox News. We want to provide easily digestible information and news for those that are both new, and seasoned digital currency traders. There are millions of users and holders of cryptocurrency but there are people who don't believe in something they can't physically hold. Holding stocks, bonds, ETFs and 401ks by this logic wouldn't be invested in because all of these in reality are numbers held somewhere but aren't physically held and in rough markets, near collapses as seen as recently as 2012 can see portfolios nearly wiped out. Digital currency is still in its infancy and buying and selling anything can be a gamble, just like any of the types of investing mentioned above. It's not for everyone, though knowledge is the first step for many people on the fence whether or not to invest in cryptocurrency.
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A few Reliable Faucets
November 11, 2020
David has a passion for cryptography, collectibles and helping people to form their own opinions.