In the early days of its launch in several thousand bitcoins were used to purchase a pizza. Since that time, the cryptocurrency's meteoric rise to in April 2021, following its heart-stopping drop in mid- by about 70 percent to around boggles your brain of many people - cyptocurrency investors, traders or perhaps the plain curious who missed the boat.
How all of it began
Remember that dissatisfaction with the current financial system gave rise to the development of the digital currency. The development with this cryptocurrency is founded on blockchain technology by Satoshi Nakamoto, a pseudonym apparently employed by a developer or number of developers.
Notwithstanding the countless opinions predicting the death of cryptocurrency, bitcoin's performance has inspired many other digital currencies, especially in recent years. The success with crowdfunding due to the blockchain fever also attracted those out to scam the unsuspecting public and it's arrived at the interest of regulators.
Beyond bitcoin
Bitcoin has inspired the launching of many other digital currencies, There are now a lot more than 1,000 versions of digital coins or tokens. Not these are exactly the same and their values vary greatly, as do their liquidity.
Coins, altcoins and tokens
It would suffice at this time to say there are fine distinctions between coins, altcoins and tokens. Altcoins or alternative coins generally describes other compared to pioneering bitcoin, although altcoins like ethereum, litecoin, ripple, dogecoin and dash are regarded as in the 'main' category of coins, meaning they are traded in more cryptocurrency exchanges.
Coins serve as a currency or store of value whereas tokens offer asset or utility uses, a good example being truly a blockchain service for supply chain management to validate and track wine products from winery to the consumer.
A point to note is that tokens Crypto ATM or coins with low value offer upside opportunities but do not expect similar meteoric increases like bitcoin. Quite simply, the lesser known tokens might be easy to get but might be difficult to sell.
Before engaging in a cryptocurrency, start by studying the value proposition and technological considerations viz-a-viz the commercial strategies outlined in the white paper accompanying each initial coin offering or ICO.
For anyone familiar with stocks and shares, it's not unlike initial public offering or IPO. However, IPOs are issued by companies with tangible assets and a company track record. It's all done inside a regulated environment. On one other hand, an ICO is situated purely on an idea proposed in a bright paper by a company - yet to stay operation and without assets - that's searching for funds to start up.
Unregulated, so buyers beware
'One cannot regulated what is unknown' probably sums up the problem with digital currency. Regulators and regulations remain wanting to meet up with cryptocurrencies which are continuously evolving. The golden rule in the crypto space is 'caveat emptor', let the client beware.
Some countries are keeping an open mind adopting a hands-off policy for cryptocurrencies and blockchain applications, while keeping a watch on outright scams. Yet you can find regulators in other countries more focused on the cons than pros of digital money. Regulators generally realise the requirement to strike a balance and some are looking at existing laws on securities to attempt to have a handle on the numerous flavours of cryptocurrencies globally.
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