Cryptocurrency is a digital asset that uses cryptography to secure its value. Unlike traditional money, cryptocurrencies are not controlled by any government or financial, making them more attractive to investors. Other advantages of cryptocurrencies are decentralized systems that do not collapse with a single point of failure and are cheaper and transfer quickly.
You should learn about cryptocurrency before jumping on the crypto-trading bandwagon if you are excited by these facts. Here are six must-know facts about them.
- There are More Than 18,000 Cryptocurrencies
Most people think Bitcoin and Ethereum are the only two cryptocurrencies in existence. You will be surprised to know there are more than 18,000 cryptocurrencies. People are stunned by looking at the price of one Bitcoin, which is around 53,681.93AUD, and think crypto trading is out of reach.
You should not forget there are thousands of cryptocurrencies to choose from. Here are some top crypto coins and their approximate rates in AUD:
- Ethereum ranks 2nd in the top 10 cryptocurrency list. Its price is around 3,503.18AUD.
- Solano is the 3rd most popular crypto coin, and its price is around 112.99 AUD.
- Cardano ranks at 4th position, and its price is around 1.0916 AUD.
- Dogecoin is the 5th most popular cryptocurrency, and its price is around 0.15AUD.
- Cryptocurrency Can’t Be Physical Banned
Crypto experts mention it is almost impossible to ban cryptocurrency. The reason is – it exists digitally in crypto wallets, and anyone can buy it and store it without the government or financial institution knowing it. Furthermore, governments or financial institutions do not control cryptocurrencies, and there are very few chances of third parties controlling them.
- They are Taxable
Many countries have legalized cryptocurrencies, and it has entered mainstream markets. Countries that have made them legal want investors to pay a slice of crypto trading profits in the form of tax. In many countries, the IRS requires crypto exchanges to share information of the traders and investors for tax compliance purposes.
- You Can Lose Your Crypto Coins
You must learn about cryptocurrency so that you can’t be careless about it. Experts mention that a crypto coin has two keys – a private and a public key. Therefore, when you have crypto coins in your crypto wallet, you will also have the private keys needed for any crypto transactions.
Just because they are encrypted does not mean you can’t lose them. If you lose your private keys, you can never get them back by requesting any crypto authority or exchange, and your crypto coins will be lost in the void forever. Hence, you need to store your private crypto keys securely.
- Cryptocurrency is Extremely Volatile
They are extremely volatile, and their price can rise or drop in a few seconds, even due to baseless rumors. Sometimes the price of a crypto coin can rise by 10% in a year or fall by 10–15% in a year. Hence, you need to be careful when investing in cryptocurrencies.
- The Total Number of Bitcoins is Limited
Many people misunderstand that a crypto coin is a digital asset that can be produced infinitely. You might be surprised to know the supply of bitcoins is limited.
Bitcoin is the number one cryptocurrency globally, and the supply limit of bitcoins is 21,000,000. As per recent data, around 18,925,000 bitcoins have been mined to date. So, few bitcoins can be mined, and you can’t change that.
These six facts will help you know cryptocurrencies and their trading better.
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