Cryptocurrency For Beginners

Joel Mark Harris

Content Writer
March 30, 2020

Compared to fiat currencies (or government backed money like the Canadian dollar), cryptocurrency is still in its infancy. However, considering the rate at which cryptocurrencies are quickly gaining adoption, fiat currencies suddenly don’t seem so far ahead of the game.

While the dollar attempts to remain relevant in the digital world through unique functionalities like e-transfers and credit card payments, it is akin to Charlie Chaplain on a big-wheel bicycle with a massive head start ahead of a modern Japanese superbike at full throttle.

Somewhere along the line the old ways will be left in the dust by the new. 

What Is Different About Cryptocurrencies?

To understand cryptocurrencies, we must first understand fiat currencies.

In a nutshell, fiat currency is money that is created and managed by governments and banks. It has value because the government said it has value. Our faith in this promise is what sustains its value. Other than that it’s just paper.  

The more closely someone studies the intricacies of fiat currency and its sketchy cousin, fractional-reserve banking, the less appealing it seems. Governments and banks can print as much money as they’d like. The problem with this is that an excess amount of money in our economy creates inflation (or the rise in price of goods and services over time).

Now flash forward to the new millennium and, cryptocurrencies like bitcoin suddenly offers a more tangible value. Why? Because bitcoin can only have a limited supply of 21 million coin.  

Many wonder how cryptocurrencies like bitcoin get their price value – and it’s simple. It’s based on the market’s supply and demand of it. The more people are looking to buy bitcoin, the more it’s price increases.

The Most Common Cryptocurrencies

There are thousands of new cryptocurrencies created every year. However, here are the two most popular cryptocurrencies 

Bitcoin — The first cryptocurrency ever created in 2008 by Satoshi Nakamoto (the anonymous creator). It allows two parties to transact directly without having to go through a financial institution. This is what it is meant by “peer-to-peer” transactions.

EtherEthereum took the technology bitcoin created and made it more than just currency.  Ethereum allows companies to to manage property, contracts, build apps and more. Ether is the cryptocurrency. 

There are many other cryptocurrencies worth learning about like how to buy Litecoin, Bitcoin Cash, XRP and more.

Survey Says 73% of Millionaires Own Cryptocurrency or Plan to Own It Soon

A survey shows that 73% of millionaires either own cryptocurrency or they plan to include it as part of their portfolio.

The survey comes by way of an independent financial advisory organization called deVere Group. The group reached out to investors all over the world and concluded that nearly three quarters of respondents either already have investments in digital currencies such as Bitcoin, Ethereum and Ripple, or they plan to own some by the end of 2022.

Big Boy Investors Agree with the Masses

We’ve already covered the level of institutional investment occurring in the cryptocurrency world throughout 2020 many times. It’s a big deal. Not only are big institutional bodies pouring in more money, so are the richest of the rich who’ve made most of their money in other traditional financial markets.

Mexican billionaire Ricardo Salinas is letting the world know that 10% of his investing portfolio features Bitcoin. The reality is smart money is going to continue to flow into the cryptocurrency markets no matter how you slice it.

High net worth individuals will pour their capital into the most promising projects and so will publicly traded assets with access to large amounts of cash. After all, the responsibility of publicly traded companies to earn a return on investment for their shareholders. Whether or not those companies are directly associated with Bitcoin or blockchain technology is irrelevant at this point. What matters is that they’re getting in the game.

How to Buy Cryptocurrency in Canada

With the increased popularity in cryptocurrencies, it is much easier to buy and invest in them then it once was. There are crypto trading platforms like netcoins.ca that provide a simple, fast, user-friendly experience for all investors (regardless of their crypto knowledge).  

It’s free to register with Netcoins and you can deposit money via Interac e-Transfers, online billing or bank wire transfers. Once you’ve opened an account and been verified, you can pick which cryptocurrency to buy. Whether you are looking to buy bitcoin, buy ether or XRP, it can all do be with the click of a few buttons. 

Netcoins makes it easy to fund your account (at 0% fees), withdraw (free cash withdrawals) and buy cryptocurrency. Unlike a lot of exchanges, you can reach them by phone, email or chat.  

What Can You Do With Cryptocurrency?

There are two options: trade or use it as currency in purchases.

As more online retailers and businesses adapt to crypto trade, fiat will become less convenient to use at more cost. It will become increasingly more inconvenient.

Crypto, however, will allow for direct transactions between you and the seller or buyer. Ultimately, if crypto establishes a mainstream status and directly competes with, or even replaces the fiat system, there are endless possibilities and applications for this technology.

People will be able to trade between each other instantaneously without having to pay interest fees, or exchange rates, or experience delays in accessing or sending money. That control will belong in the hands of all of us.

 

Read more about it here:
Most Popular Cryptocurrencies 
How To Buy and Sell Bitcoin in Canada 
Glossary of Cryptocurrency terms