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Having decided to invest in cryptocurrency and make money on it, a beginner should carefully study the advantages and disadvantages of digital currency. We will tell you how crypto appears, what pros and cons it has, as well as popular ways to make money on virtual assets available to beginners.
How does a crypt appear?
The first cryptocurrency with which it all started is Bitcoin, it was put into circulation in 2009. Crypto is created by blockchain technology. In simple terms, blockchain can be described as a database. Blockchain has some features, for example, it is created only for adding. This means that the user can only add data, but cannot change or delete it. Each entry in the blockchain is linked to the previous entry, that is, each link necessarily contains the hash of the link before it.
Blockchain technology creates a decentralized currency that is not controlled by government agencies and banks. The value of a crypto is highly dependent on supply and demand in the market. Today there are about 10,000 different coins, some of them are worth tens of thousands of dollars, others are not worth even a dollar.
Cryptocurrency pros and cons
Virtual assets created by blockchain technology are decentralized and this is one of the main advantages. Cryptocurrency does not have a regulator that controls the rate, its price depends on market participants. The operation of the system is controlled by the users themselves – these are miners who extract cryptocurrencies, validators and other market participants.
In addition to the decentralized system, people are attracted by other advantages of cryptocurrency:
- low cost of transfers, regardless of the location of users;
- great investment opportunities;
- different ways of earning, active and passive;
- inflation protection.
Many advantages of the crypt are based on the differences between digital currency and fiat. Fiat money is the usual currencies of states. Like cryptocurrencies, fiat is not backed by gold or other physical value, but is regulated. Cryptocurrency is anonymous and offers its owners much more freedom, moreover, it is not subject to inflation, while fiat money depreciates regularly.
The cryptocurrency industry is actively developing, some of the problems that worried users just yesterday is practically not mentioned today. However, there are some downsides to crypto:
- high volatility, sharp exchange rate changes that cannot always be predicted;
- the dependence of the value of assets on supply and demand, the unpredictability of the market;
- lack of clear legislative regulation;
- the irreversibility of the transaction, the operation cannot be undone.
One of the temporary disadvantages of cryptocurrency can be called distrust on the part of society. So far, the crypto is officially recognized only by a few countries, and most people in the world are wary of virtual assets. Because of this, myths associated with the dangers of cryptocurrency appear. However, as the popularity of digital assets grows, more and more countries of the world will legalize them, and over time, the crypt will become a familiar means for paying for goods and services, as well as a simple and understandable tool for many people to invest and store savings.
How to make money on crypto?
are many ways to make money on cryptocurrency, some of them are quite simple and suitable even for beginners. If you are just starting to understand the features of the cryptosphere, invest. Buying a promising cryptocurrency for long-term holding and selling after an appreciation is a fairly simple and common way to make money.
By owning cryptocurrency, you can earn interest for storing it on the exchange. Popular and large platforms offer users landing and staking – these are passive earning options.
The most effective and profitable way to make money on cryptocurrencies is trading. To successfully trade cryptocurrency, you need to study, master technical and fundamental analysis, study different trading styles and strategies, and understand market trends. You will learn all this on the course from the Crypto team Crew!