What is a cryptocurrency? Should I buy Bitcoin, Ripple or Ethereum?

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Bitcoin, the biggest and best-known cryptocurrency, is down varied than 15 percent from this time yesterday, its sell cap dropping from $239billion to $201billion today (January 16).

A unattached bitcoin token is now trading at about £8,700 ($12,000) compared to its high of £10,484 ($14,445) yesterday, according to CoinMarketCap.

This is about 40 percent lower than December’s all time high of £14,520 ($20,000).

In the interim, its next biggest rivals Ethereum and Ripple have also collapsed by  in all directions 15 and 24 percent respectively over the past 24 hours. 

Due to their outrageously volatile nature, cryptos have dominated the headlines in recent months and dispensed the financial community.  

For those new to the digital currency market, here is a clever guide to cryptocurrency.

What is a cryptocurrency? 

Put simply, a cryptocurrency is a decentralised understood form of money that can be used to make purchases or be exchanged for other habitual and digital currencies. 

One of the most appealing aspects of a cryptocurrency is that it enlists a security system known as cryptography. 

This makes it almost outlandish to counterfeit, as well as allowing for completely anonymous transactions without the be in want of for a bank.

Bitcoin became the first decentralised cryptocurrency when it was flung by the mysterious Satoshi Nakamoto in 2009. 

Bitcoin, Ripple and Ethereum coinsGETTY / RIPPLE

What is a cryptocurrency? Cryptos are digital constructions of money

Since then, thousands of alternative currencies have joined the call, including GETTY

What is a cryptocurrency? Bitcoin, Ripple and Ethereum all blasted in the markets today

He said: «The volumes have been declining steadily both in Japan and South Korea over the last few days.

«This morning, the combined volume from these two top crypto occupation countries dropped below 30 percent. Looks like they’re pooped of overpaying for cryptos and waiting for the market to even out.»

Meanwhile, Peter Adeney, a pecuniary advisor who operates under the pseudoname Mr Money Moustache, has warned against the “collective irresponsibility” of the cryptocurrency market. 

He said: “You should not invest in Bitcoin. The reason why is that it’s not an investment; precisely as gold, tulip bulbs, Beanie Babies, and rare baseball cards are also not investments.

“These are all fashions that people have bought in the past, driving them to farcical prices, not because they did anything useful or produced money or had sexually transmitted value, but solely because people thought they could hawk them on to someone else for more money in the future.”

Ethereum coinsGETTY

What is a cryptocurrency? Cryptos can be toughened to send money securely and anonymously

But Christopher Keshian, managing pal and co-founder of $APEX Token Fund, has a more optimistic view, indicating that increased regulation could help the crypto market in the desire run. 

He said: “The volatility of bitcoin — and other crypto currencies — is an expected, and respected, part of the journey to becoming a mature asset class. 

“We expect the volatility to go on throughout 2018 but fundamentally believe that bitcoin is still in a bull vend. 

“However, we also believe there will be a flight of capital away from idealistic ICO investments with teams who have failed to execute on their roadmap and for major currencies or assets, including Bitcoin.

“The crackdown in some responsibilities of the world on crypto currencies is to be anticipated and welcomed.”

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