Crypto Currency And How To Invest In It(Part 2)

  Hello my dear friends I hope you all are doing well. Today I will continue from my last blog over Cryptocurrency And How to Invest In It p...

 Hello my dear friends I hope you all are doing well. Today I will continue from my last blog over Cryptocurrency And How to Invest In It part 1. If you still didn't read my last blog then I would request you to visit my last blog for a clear view of this blog. Here is the link, click now--> Last blog over Cryptocurrency

⦿Disclaimer: Before we begin I want to clarify one thing, here I am not suggesting you to invest in any particular Cryptocurrency or to invest in Cryptocurrency at all. Because the Cryptocurrency market is too much volatile and currently it is the highest risky asset class. You must invest in it with proper knowledge and research.

I have a suggestion for you that before investing you must do your own research and your investment must not be based on any internet meme or on any social media influence. Because these all are your hard-earned money and I must say no one wants to lose it. So invest wisely. Or if you have any disposable money then you can try your luck.

In the last blog, I ended up with blockchain technology and with some Crypto exchange platforms. Now I'm gonna tell you more about Cryptocurrency and its exchange platforms related questions. And al last there is a tip for you guys so you must read the complete blog.

⦿How is Cryptocurrency mined and who are the miners?

To answer this question let us take an example. Let's say I want to send 10BTC(Bitcoin) to my friend, then I am sending a message to the whole Bitcoin network to initiate the transaction, this message is signed with a unique key or a private key. With this, the whole network will know I am trying to send 10BTC to my friend, and every computer in this network got the signal that I have 10BTC because every computer has a copy of the current database, now this transaction line in a waiting room to verify and proceed further. 

Now here enters the BTC miner (Miners are those computers scattered around the world and linked to the network), these miner's work is to collect the transaction data and after verifying they procced it. These transactions groups are called Blockchain. In the previous blog, I wrote about blockchain so if you didn't read that you must visit my last blog.

Now there are lots of miners around the world and they compete with each other to complete the transaction and get the reward. Now to complete the transaction they solve complex algorithms and the one who solves it at first will get the reward.

The rewards can be the same currency that they mined, in the BTC network the miners get the reward in the form of newly minted BTC, currently, miners are awarded 6.25 BTC per valid block mine. But it is reduced by 50% every 4 years or after two hundred and ten thousand blocks are mined, and this cycle goes on.

Just like BTC, there are lots of Cryptocurrencies that are mined in the same way.

⦿Do we really need so many coins?

Today according to my research there are more than 6k Cryptocurrencies that are available in the market. Now we know blockchain technology is basically a software that is tied up with Cryptocurrency. Any two blockchains are similar types of software, but they can be programmed to serve very different uses.

Just like if we take Microsoft Windows and Google's android both are technologies for different platforms. So basically every coin has its own agenda. As we know BTC was introduced to replace traditional money take the control of money from the central authorities, ETH in the first place came to solve the limitations of BTC then facilitate with start contracts with its own currency, Dogecoin was made in 2013 just as an internet joke.

After all this you can have a doubt that a new currency can damage the scarcity of BTC? the answer is no, just like the Dollar cannot replace our Indian rupee.

Now comes the question, is investing or trading in Cryptocurrency legal?

USA: While it is difficult to understand whether it is legal or not. The Financial Crimes Enforcement Network (FinCEN) does not consider cryptocurrencies to be legal tender but considers the Cryptocurrency exchanges to be money transmitters. Still, there is no tax on Cryptocurrency.

INDIA: In 2018 RBI(Reserve Bank Of India) issued an article that no bank should provide service to any digital currency, but SC(Supreme Court Of India) took the order and told the banks to resume their transactions. in India, Cryptocurrency is not a legal tender of money right now. However, buying and selling Cryptocurrency isn't illegal in India. But till now RBI and the other government bodies couldn't decide whether to fully ban it or legalize it, they are in dilemma right now, so Cryptocurrencies future in India still not very clear, but the exchanges in India trying to convince the government and try to ensure the Crypto market in India.

Some countries right now trying to legalize it as a currency however some countries are banning the mining of Cryptocurrency. What is your thought on it, let me know in the comment section.

Now some countries are trying to make their own digital currency, which will be backed by their own central banks, and the transaction can be reversed and its information will be hidden, like Cryptocurrency. Let me know your thoughts on it also.

⦿How can you invest in Cryptocurrency?

In my previous blog, I wrote about the Crypto exchanges, where you can easily exchange your fiat currency with Cryptocurrency and trade them in that exchange or you can easily transfer it from your Crypto wallet to other's wallet.

There are many regulations and terms & conditions to use these exchanges and these vary from country to country. In India, you need KYC documents and a bank account with an online transaction facility. Here most of the exchanges allow you to invest as low as 100Rs, so I must say you may surely explore this. The platform charges are varies so if you want a detailed comparison between Crypto exchanges then let me know. But before investing you must consider these things

As you can see here this market is very volatile.

In just one day you can see the bullish move of the market. You can see here how volatile the market is.

Investing in any meme coin or underrated coins and hoping that in just one night you can make millions of dollars, this attitude may lose you all money. So make a decision that how much money you can really lose and that won't affect you all, only that amount of money you might invest in these types of tokens.

★Tip: Last but not the least, my suggestion for you is that these days there is a trend to suggest people that "BUY THE DIP", but remember one thing if you try to catch a falling knife it will give you a wound maybe not physically but mentally. So invest wisely.

In the upcoming blogs, I will tell you how to survive and make a profit from the bull and bear market. So stay tuned. Thank you😀

Editor:  Sk Elaf Ahmed, Rupak Chowdhury.