Cryptocurrencies are a financial revolution. They offer anonymity, security and fast transactions, which have made them popular among criminals as well. Cryptocurrencies have been embraced by all walks of life, with merchants accepting them as payment and individuals buying them to invest or hodl for the long term. Cryptocurrency is a digital currency designed to make financial transactions without involving a bank or other third party. It works like cash in that you send it to someone else directly and then request reimbursement. Many vendors accept cryptocurrency payments through services like Bitpay; however, most people buy Bitcoin or other cryptos through online exchanges or brokers who act as an intermediary between the buyer and vendor. As of July 2018, the total market capitalization of all cryptocurrencies was about $217 billion USD (that’s over 3x that of stock markets). For comparison, global credit card spending alone was $1 trillion in 2017 (source: The Nilson Report – Financial Telecommunication Service Bureau).
How much cryptocurrency is there in circulation?
As of April 30, 2018, the total cryptocurrency market capitalization was $205.8 billion, according to Coinmarketcap.com. This is a decrease from $214.8 billion on April 30, 2017. It’s worth noting that some cryptocurrencies are not included in this market capitalization (for example, Ethereum Classic, Ripple and Monero). Cryptocurrencies are created through a process called mining, in which coins are created and distributed through a decentralized network of computers. This can lead to a limited supply of a currency, which can make it more valuable. The total number of coins in circulation is also constantly changing, as some coins are lost, destroyed or go dormant. There are different types of cryptocurrencies, such as Bitcoin, Litecoin, Ethereum and many more. People can also create their own cryptocurrency. For instance, if a company wanted to launch its own cryptocurrency, it could create a new digital asset and distribute it to the public.
Also Read- What Are the Rules and Regulations for Investing in Cryptocurrency?
Which countries accept cryptocurrency as legal tender?
Over 190 countries or territories have signed or enacted legislation recognizing the use of cryptocurrencies or blockchain technology. Among the first countries to accept cryptocurrency as legal tender were Sweden, Finland and Japan. Cryptocurrency is also accepted as legal tender in major financial centers like Hong Kong, South Korea, Canada, Denmark, Australia and New Zealand, among others. Countries with a high level of cryptocurrency adoption are more likely to be economically and socially progressive. It’s also important to note that not every cryptocurrency is available everywhere. Some countries have only one type of cryptocurrency, and some countries have no legal recognition of cryptocurrency at all.
How to buy cryptocurrency
There are several ways to purchase cryptocurrencies. Some exchanges let you trade fiat money for cryptocurrencies, while others let you buy cryptocurrencies using fiat money or other cryptocurrencies. You can also buy cryptocurrency using a prepaid debit card. Again, some of these methods require you to be careful about your identity and your funds. It’s also important to keep in mind that not all exchanges and wallets offer the same features or security standards. For example, not all wallets provide multi-signature authentication, which helps protect your funds.
Cryptocurrency and taxes
Cryptocurrencies are not officially recognized as legal tender in the United States or many other countries. However, some governments are experimenting with blockchain technology, and they may also choose to adopt cryptocurrencies in the future. For now, it’s important to consult your tax professional to learn more about how to report and pay taxes on your cryptocurrency investments. Some cryptocurrencies may also be subject to taxes in specific jurisdictions. It’s important to keep track of your holdings, as different jurisdictions may tax cryptocurrencies at different rates. You may want to keep a record of your spending, in case you want to claim a deduction or tax credit.
Also Read- How and When Did Litecoin Start?
How to sell your crypto holdings
Selling your cryptocurrency may be a good way to obtain cash and pay less taxes. There are several exchanges and wallet services that let you trade one cryptocurrency for another, or sell your coins directly to a buyer. It’s important to note that some of these services charge fees, so it may be best to use a free service. The safest way to sell your cryptocurrencies is to use a personal wallet and trade it for cash or to buy it back from the exchange or wallet service. Before you sell your coins, make sure you do not send them to an address controlled by the exchange or wallet service, as they may not have your best interests at heart. You should also take precautions to protect your privacy when selling your coins. For example, you may be able to find cheaper coins on exchanges operated by private, decentralized exchanges.
What’s next for cryptocurrencies?
It’s hard to predict what will happen to cryptocurrencies as they evolve. They may become more widely accepted, such as with the surge in merchants who accept Bitcoin as payment. On the other hand, they could also become more popular among criminals, who use them to conduct illicit activities. As they continue to evolve, people will likely use them in more ways, which could result in a decrease in demand. It’s hard to say what will happen to cryptocurrencies as they continue to evolve.
Also Read- What is Litecoin and how can I earn from it?
Security concerns and future outlook
Cryptocurrencies are not backed by any government or institution. They are not regulated, and there are no laws that protect you from losing your investment if the service goes down or is hacked. It’s important to remember that cryptocurrencies are volatile, and some people may want to buy them just for the short term. For this reason, you may want to consider investing only a small amount of money that you can afford to lose. It’s also important to remember that cryptocurrencies are extremely volatile and can generate huge gains or losses in a short time period, so it’s important to manage your risk and be prepared to protect your money. Ultimately, it’s important to remember that cryptocurrencies are a speculative investment, and they can be extremely risky.
