Crypto Trading in 2022
Are you looking for crypto signals? So, what have yours done?” That's how much of my conversations these days begin with fellow enthusiasts who have recently gotten into the cryptocurrency. Cryptocurrency is a collective name for virtual coins such as Bitcoin, Ethereum, Ripple and a multitude of 'altcoins', alternative and smaller coins.
Recently, crypto has been in the news more and more and more and more people are stepping in, if only to see what it is exactly. According to Kantar TNS, there are currently 135,000 households in the Netherlands that own cryptocurrencies.
Eight years ago I first became acquainted with bitcoin and even mined for a while, but there was little movement in it at the time, so I stopped. After seeing the VICE Money documentary about a young entrepreneur who raised his investment from $100 to $1 million, I decided to reenter this new world and try my luck.
What is cryptocurrency?
Cryptocurrency is digital currency, which is not centrally managed, but gains value through network trading (similar to stocks) between users. The advantage of this is that no one manages the currency, so there is no dependency. The downside is that you have n! relationships and the more users, the more complex the calculations become.
Each transaction is added to a long chain of transactions that are linked together called the blockchain and each transaction must be 'approved' by the existing network to ensure that there is no fraud and the transaction is genuine. This is done by (re)calculating the entire blockchain and this requires a lot of computing power from the computers used.
The users who lend this computing power to the blockchain receive a certain compensation in the form of the cryptocurrency. Meanwhile, some blockchains, such as Bitcoin's, are so large that entire factories in China are filled with PCs that are 'calculating' all day long for a reward. This is called mining.