Crypto currency is a digital type asset that act as a "medium of exchange" between platforms. As is in the name, these exchanges utilize cryptography to secure all of the transaction, create new currencies, and to keep track of who owns what in the crypto world.
Most of the crypto market uses decentralized or delegated activities which takes the planning and decision making away from the centralized source (such as a central bank or financial institution that use centralized digital currency).
The crypto currency generally starts out centralized when it is first minted, but then it is implemented with decentralized control, going through a distributed ledger or a blockchain to serve as the public transaction database.
The bitcoin is pretty much the starting point of decentralized currency with its first release of open-source software in 2009. Since then, over 6,000 variants of the bitcoin or other crypto currency have been created and used for a variate of purposes.
Whether the money is centralized or decentralized, it all started in a similar way. There was real money to back it. And it is traded across various networks just like the stock market, so you can plan and execute your trades of crypto currency just like you do with the stock market to lessen the risk and increasing your gains.
When first starting out with decentralized currencies, you must understand as much as you can about them. When I first started, I jumped in feet first not knowing much at all. I established an account in the best crypto trading platform that I was introduced to and dumped a couple hundred bucks in right away. Then another $200.00. In ten days I gained $200.00. I was ecstatic and hooked.
Then the market went down and I lost all of my gains. Now humbled, I figured out how to actually research the crypto currency on the chart to see where it was at (either overbought, oversold, going up, or going down), something I should have learned how to do before jumping right in.
So, you must think of safety first when it comes to your portfolio. Crypto charts are available to you so you can research the different types of crypto currencies available so you can decide which one is best for you.
Since crypto currency is fairly new, it has a great potential to go up, just like stocks do when they IPO. Many of them are pennies when they just start out and within a few years are worth over ten dollars.
But that doesn't mean the currencies didn't have their share of doubts and legal problems. There are many concerns of unregulated distribution of money on a global scale or that it may become a huge threat to the financial infrastructure of the global economy.
Some of the possibilities that still exist that have happened are money laundering, theft, pyramid schemes, and wire fraud. The anonymous transactions play a big part of this, but it also occurs because bad people find easier ways to do bad things.
In 2014, the U.S. Government began taxing bitcoin and started treating it as property for tax purposes. This allows crypto currency to be subject to capital gains tax. If you don't report your crypto earnings on your taxes, you will receive notification from the IRS to amend your return and pay the taxes.
This got the interest of stock brokers and many are in the works to implement trading crypto currency on their exchanges. It's big business and they all want a part of it.
Crypto currency has a lot of huge opportunities and is traded 24/7 around the world. It follows the same types of patterns as stocks do in the stock market and can provide investors with a steady stream of income. It's easily exchanged from U.S. dollars and many other currencies to whatever crypto you desire.
There are many countries that are not able to trade cryptocurrencies. Be sure to understand all of the rules for trading crypto currency before jumping right into it.