How do I start learning about Cryptocurrency?

 

Bitcoins are an electronic currency, generated at a decentralized level by a computer network on the internet

and encrypted on the basis of digital signatures, which gives rise to data packets, stored in virtual wallets called "wallets". The idea of ​​a free digital money market dates back to 2008 and was born as an alternative project to traditional money, behind which there are national governments, central banks, credit institutions, and economies. Bitcoins have been around since 2009 and have found "followers", especially during the economic crisis. The goal of their developers was to create a simple and independent payment tool, which was accepted all over the world and which could be used both on the internet and in the real world.

Speaking of technology, how do you get bitcoins?

It is necessary to locate an intermediary (broker) on the internet, open a virtual wallet, and exchange euros with this cryptocurrency, transferring the amount in euros to a specific bank account of the intermediary. This will take care of crediting the bitcoin equivalent in the electronic wallet, provided with a security key or password. Loss of the password involves the loss of the cryptocurrencies contained in the virtual account. There are also automatic vending machines (ATMs) that allow credit directly on site. Transfers to other account holders must be made from their mobile or computer. Bitcoins can also be obtained through “mining”, which offers a reward to those who first identify the encryption key.

Could you explain the reasons behind the very strong price rises and subsequent collapses?  

The individual is driven by the lust for money and greed. When prices are rising, even in the case of a conventional investment, new people always pop up who want to participate in the "party": the greater the number of members of a platform, the higher its value will be, similar to what happens for Facebook. . Towards the end of last year, the rise in bitcoin prices took on a staggering scale and all this rumor made headlines, sparking further interest. At the beginning of 2018, we saw a massive correction, accompanied by general disenchantment, in the face of a collapse in prices of more than 50 percent. Most bitcoins are in the hands of a few people and only a small part passes from one owner to another through the sale.

To what extent can technological risks (such as viruses, Trojans, and hacker apps) put digital accounts at risk?

Like everything that can be found on the net and is based on software, cryptocurrencies are also exposed to the risks of a hacker attack, contrary to what some claim, but they are not even protected from potential scams. Furthermore, digital currencies are increasingly being targeted by politicians and supervisors, not least because they allow criminals to hide their business.

Do you think they will take the place of traditional payment instruments in the future?

Absolutely not. The most exciting part of digital currencies is the technology behind it, the so-called "blockchain", which is being studied by central banks around the world, which would like to use it for their own purposes, for example, to facilitate transfers of money around the world.

Do you find digital asset class currencies interesting for diversifying a portfolio?

No. The supervisory authorities of the financial markets around the world, first of all, the European ESMA, have already expressed themselves in this regard, warning of the risks of purchase. Bitcoins are commodities for speculators, behind which there are no central banks, governments, or supervisors. Virtual money is not secured by physical assets and its value is determined solely by the trust of its users, i.e. by the fact that some companies accept it as a means of payment and that the trading platform is willing to exchange it for national currencies. The strong volatility of the exchange leads to its huge swings.

How do governments and supervisory authorities plan to intervene in this area?

States will not watch helplessly as it proliferates online, especially since they see it as an attack on their sovereignty. More and more countries have put barriers to trading in cryptocurrencies and an increasingly stringent and rigid discipline is foreseeable, eg. through the regulation of intermediaries, the limitation of places of access, the disclosure of data, etc. Supervisors repeatedly warn consumers not to buy virtual currencies without being aware of the risks. The watchword is: let it go unless you can potentially bear the total loss of the capital invested.