Crypto Chronicle is a studio and marketplace app offering authenticated non-physical collectibles (NFTs). Among its co-founders is Tim Glover – who led digital fan experiences for Jurassic World franchise and Universal Pictures as well as being an early investor in Thorchain; Jim Jin is another early investor.

Investing in cryptocurrency is risky and does not guarantee returns. Get informed of these considerations through this three-part series.

What is a Cryptocurrency?

Cryptocurrency is an alternative form of payment using encryption algorithms to verify transactions. As there is no central authority regulating or issuing cryptocurrency, all transactions are recorded on public ledgers known as blockchains.

Each cryptocurrency has its own set of rules governing its network and usage, although most utilize blockchain technology for record keeping. A cryptocurrency’s value is determined by how much people want to own or trade it and can be affected by news about how companies plan on incorporating its use and world events. Furthermore, stablecoins attempt to keep their value relative to real assets such as dollars.

Because cryptocurrencies are high-risk investments, you should only allocate a small portion of your portfolio into them. Since they’re uninsured by banks, their value could quickly fluctuate if the market shifts against them; furthermore, many platforms where people buy and sell cryptocurrency could potentially be compromised or shut down altogether.

Why is Cryptocurrency Important?

Cryptocurrency has gained in popularity among investors due to its speculation value, yet many also believe that it could transform how people use money and invest. Investors should keep in mind that cryptocurrency is still relatively young so conducting your due diligence before investing is paramount.

Blockchain technology underlying cryptocurrency is an extremely powerful force of innovation and decentralization. Programmability makes DApp development possible while transparency and security features offer protection from fraud or theft for consumers.

Cryptocurrencies offer low transaction fees that make them an appealing way of sending money overseas, while their lack of consumer protections makes them highly unpredictable in price fluctuations and protection needs. Investors should be mindful of the potential risks and taxes related to cryptocurrency investment if selling or exchanging their coins for goods and services; any profits earned may be subject to capital gains taxation.

How Does Cryptocurrency Work?

Cryptocurrency transactions are recorded on a digital ledger known as the blockchain. Every network computer known as a node hosts their own copy and utilizes encryption technology to relay and validate transactions. Furthermore, blockchain was designed so as to prevent hackers from altering past transactions by changing them without their knowledge.

When Alice sends cryptocurrency transactions to Bob, their message is broadcast across all nodes on the network with instructions for changing ownership and timestamp information. After being added to a block of recent transactions, miners compete against one another to solve a cryptographic code and add these transactions back onto the blockchain.

Proponents of cryptocurrency believe it empowers individuals by decentralized money creation and control away from central banks, Wall Street and other institutions. Critics however argue that its lack of regulation allows criminals, terrorists and other bad actors to use them to avoid taxes and launder money without detection; furthermore they note the highly volatile nature of cryptocurrencies, which requires huge amounts of energy consumption to operate.

What are the Benefits of Cryptocurrency?

Cryptocurrency transactions can be completed quickly, at low costs and relatively invisibly. They also reduce reliance on intermediaries like banks or monetary institutions – eliminating any risk that one institution could fail and create global instability similar to 2008 financial crisis.

Investors can purchase and trade cryptocurrencies on exchanges, peer-to-peer or their own wallet software, then use them to make purchases online retailers or physical stores that accept cryptocurrency payments.

Cryptocurrencies are highly unpredictable markets where prices can move on the basis of rumors, news and other influences – meaning investors who can tolerate more risk should invest. Otherwise, those looking for less volatile investments such as stocks could consider exchanging-traded funds that do not hold physical cryptocurrency assets directly as alternatives.

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