Are you new to the market? Would you like to know more about the cryptocurrecnies? Here are 5 interesting facts about them!
Besides Bitcoin, there are thousands of altcoins
The first cryptocurrency, about which most people hear is Bitcoin. No wonder she's the first one to appear. It is worth knowing, however, that apart from BTC, there are a number of different coins on the market, more or less similar to it, called altcoins. The crypto market has grown rapidly. Nowadays we have not hundreds, but thousands of new cryptocurrencies. Some of them are more useful, others less. There are also those that do not provide you with any value - we are talking about coins belonging to the financial pyramids, such as OneCoin, for example. These, in turn, are difficult to even call cryptocurrency.
If you're wondering which cryptocurrency is worth investing in at the moment, and you're looking for answers to what will become the second Bitcoin - first, you should focus on observing the markets. Cryptocurrencies with smaller capitalization may be too risky for you, due to more frequent and stronger fluctuations. Also remember not to suggest the price itself, as it is not an indicator of virtual currency values. Each cryptocurrency is different, has different assumptions and functions - it is important to pay attention to all this.
The price of a cryptocurrency is not fixed - its prices fluctuate strongly
The prices of virtual currencies are changing. Prices of cryptocurrencies with low market capitalization may include increases and decreases of hundreds of percent. This is because in this case the markets remain more shallow, and investors with the majority of such coins can easily manipulate charts. This is completely different for larger cryptocurrencies. Usually they fluctuate at the level of a few or a dozen or so percent, although in the case of some events it may even be several dozen percent. Let's take under a magnifying glass, for example the situation from March this year, when the world markets collapsed. At that time even Bitcoin lost more than half of its value - of course it quickly made up for all the losses.
Not every virtual currency has the same function. Here, it is worth mentioning, for example, stablecoins - their value is assumed to remain constant, what is more, they are covered in a fiduciary currency or another asset of a certain value - for example gold. This type of coins includes the Tether (USDT), which is currently in 3rd position in the CoinMarketCap ranking. Its price is assumed to be equal to 1 USD - although there are also minimal fluctuations above or below this amount. It is worth mentioning, however, that investors do not buy stablecoins in order to make money on their declines and increases, but only to be able to quickly enter and exit the markets.
If you lose private key to your wallet, you won't be able to get your crypto back
Each cryptocurrency wallet consists of two keys: a public one, to which cryptocurrencies are assigned, and a private one providing access to coins, and allowing to confirm transactions. In this case, the latter serves as a password, without which you will not be able to recover your funds. If you lose it or it falls into the wrong hands, you can simply lose your cryptocurrencies.
Fiduciary money is 800 times more often used by criminals in darkweb than cryptocurrencies
Although it happens that people who have no contact with the crypto market claim that this type of currency is most often used by criminals, it is in fact a myth. Last year, Messari published a report stating that traditional currencies are 800 times more frequently used on the black market than cryptocurrencies. Of course there are people who try to launder dirty money through virtual currencies, but the same can be said of the US dollar, which is very often used by criminals, and yet people use it.
In this case, the analogy is a knife that can be used in the kitchen or become an instrument of crime - but that doesn't mean that it is something bad and we should all get rid of it for safety.
Cryptocurrencies are not anonymous
That's another myth to disprove. Although there are privacy-oriented cryptocurrencies like DASH and Monero, coins like Bitcoin are not anonymous. Of course we don't sign our name, but all users have access to the data stored on the blockchain, such as the public address of the recipient and sender, the amount transferred and the date.
It should also be mentioned that most crypto platforms have KYC (Know Your Customer) and AML (Anti-Money Laundering) policies, so their customers have to undergo verification.