Today more people are interested in digital currencies, commonly known as cryptocurrencies, and it is no surprise that everyone wants to learn more about how they work. For others, cryptocurrencies are a mysterious subject. If you’re going to be a savvy investor or trader in cryptos, you have to learn the basics and find out as much as you can about the booming world of cryptos.
It has been a bumpy ride for cryptos, and although it is still unclear where they are headed, they have the potential to transform financial systems. Here are some truths about crypto you need to know.
Thousands of cryptocurrencies exist in the market.
If you thought you could only invest in bitcoins, you are wrong. Currently, there are more than 9500 cryptocurrencies in the market. Although you can’t find them in one exchange, they exist out there, some requiring their wallets. Everyone wants to venture into the world of cryptocurrencies, which explains why they pop up in the industry daily.
Creating a cryptocurrency is relatively easy, but the top 20coins account for more than 80% of the crypto market share. Many cryptos in the market aren’t worth much. But there is always a diamond in the sea that everyone hopes to grab. Some creative ones exist, so not all altcoins are useless.
The total bitcoins are limited.
Bitcoin is the leading cryptocurrency because it was the first one to exist. The bad news is that the total number of bitcoins is limited. When the network for bitcoin was established, the limit was set to 21million. Therefore, there will be no more bitcoins to mine at some point.
As of April 2022, some estimates have put the number of circulating bitcoins at 19million. That means only a few bitcoins are yet to be released through mining. Mining is the process of verifying transactions in blockchain technology to earn bitcoin rewards.
Some cryptos have more uses than a coin.
Some cryptos have more potential than a digital currency. One of them is Ethereum, whose blockchain can do more than just process currency transactions and send payments. In other words, the underlying technology for Ethereum is not only useful as a medium of exchange.
It comes in handy for executing smart contracts, and many industries such as finance, healthcare, government voting systems, and supply chain can utilize it. One can even create crypto in the Ethereum blockchain.
Cryptokitties are the first blockchain game.
Have you heard of crypto kitties? They enable you to create one of a kind digital cat. However, crypto kitties are not cryptocurrencies but non-fungible tokens. Every crypto kittie is unique in a way that no one can replicate, so it is like the original artwork. The Ethereum blockchain also facilitates the creation of crypto kitties.
Some countries have banned cryptocurrencies.
You cannot use cryptocurrencies to transact in every country. Some, such as Turkey, have banned crypto payments, while others like Nigeria have banned crypto exchanges. China also restricts financial institutions from providing services associated with crypto transactions. Due to their centralized nature, it is impossible to ban the use of cryptos, but countries can shut down exchanges or regulate access to service providers.