Bitcoin, Dogecoin, Altcoin... What are all these people talking about? What are cryptocurrencies? Are cryptocurrencies real money or not? Can you become rich from investing in crypto?
Crypto has become all the hype recently with thousands of people around the world putting their savings into the different available cryptocurrency options.
But what exactly is the world of cryptocurrency about? How can you dive into the world of crypto and start building your own portfolio? Is there a way to become a successful investor?
Keep reading to learn more about the world of crypto, where you can find the best private crypto tutors in Malaysia and everything you need to know to become a crypto pro.
Go here to learn more about the risks of cryptocurrencies, tips to become a better investor and where to study crypto in Petaling Jaya.
What is the History of Cryptocurrencies?
Digital currencies offer a unique challenge compared to traditional currencies like dollars and euros, called “fiat” currencies in the cryptocurrency community. That’s because, unlike dollars and cents that can be physically exchanged and tracked, cryptocurrencies exist only in the digital domain.
In order to fully understand cryptocurrencies we need to go back in time and understand the history behind crypto. Bitcoin was the first established cryptocurrency but before it came to life, there had been previous attempts at creating online currencies with ledgers secured by encryption.
- Before there was Bitcoin, there had to be "public key cryptography." In 1975, American cryptographers Whitfield Diffie and Martin Hellman discovered and developed the concept of public key cryptography at Stanford University. They published their ideas in a 1976 paper, "New Directions in Cryptography."
- Cryptocurrency’s technical foundations date back to the early 1980s when an American cryptographer named David Chaum invented a “blinding” algorithm that remains central to modern web-based encryption. The algorithm allowed for secure, unalterable information exchanges between parties, laying the groundwork for future electronic currency transfers.
- Later on, the earliest noteworthy digital currency may be Digicash, which failed in the 1990s. PayPal and competitors later emerged and took a hybrid approach where they handled digital transactions in existing currencies. Other attempts at cryptocurrencies or their underlying technology include B-Money, Hashcash, Flooz, and Bit Gold.
- In October 2008, a paper by Satoshi Nakamoto (a pseudonym) titled Bitcoin: A Peer-to-Peer Electronic Cash System outlined a system for creating a digital currency that did not require trust in any third party. Nakamoto’s paper effectively launched the cryptocurrency revolution.
- Bitcoin is widely regarded as the first modern cryptocurrency: the first publicly used means of exchange to combine decentralized control, user anonymity, record-keeping via a blockchain, and built-in scarcity.
- In 2009, the Bitcoin software was made available to the public for the first time and mining, the process through which new Bitcoins are created and transactions are recorded and verified on the blockchain, began.
- Bitcoin's popularity also grew thanks to the 2008 financial crisis in the United States when people had deep mistrust for banks and the US government. In that context, a peer-to-peer form of currency made more sense and was more appealing than it might've been at other points throughout world history.
- In early 2010, Bitcoin was the only cryptocurrency in the market. At that time, its price was just a few cents. Over the next few years, new digital currencies entered the market, and their prices rose and fell along with Bitcoin’s. By late 2010, the first of what would eventually be dozens of similar cryptocurrencies began appearing. The first public Bitcoin exchanges appeared around this time as well.
- In late 2012, WordPress became the first major merchant to accept payment in Bitcoin. Others, including online electronics retailer Newegg.com, Expedia, Microsoft, and Tesla followed.
- In 2016, Ethereum’s arrival was marked by the emergence of Initial Coin Offerings (ICOs). These are fundraising platforms which offer investors the chance to trade what are often essentially stocks or shares in startup ventures, in the same manner that they can invest and trade cryptocurrencies.
- Throughout this period of volatility, many people lost faith in cryptos as an investment vehicle. However, beginning in late 2017, cryptos began to see unprecedented growth.
- 2017 was the year of cryptocurrency. As the value of Bitcoin and other digital coins skyrocketed, so did the number of schemes and scams targeting crypto investors. From fake initial Coin Offerings (ICOs) to phishing attacks, thieves managed to steal millions of dollars.
- The market has continued to grow with more than 17,000 different types of cryptocurrencies around.
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What Are the Pros of Cryptocurrencies?
There are many skeptics of the world of crypto. It is rather a volatile environment and can generate quite a bit of uncertainty. That said, there are also many pros to cryptocurrencies:
- Easy Transactions: Crypto transactions can be made easily, at low cost, and in a manner more private than most other transactions. A cryptocurrency transaction is generally a quick and straightforward process. For example, Bitcoins can be transferred from one digital wallet to another, using only a smartphone or computer.
- Incredibly Secure: Because they are based on cryptography and blockchain security, decentralized cryptocurrencies tend to make for secure forms of payment.
- Short Settlement Times and Low Fees: While some people only want to invest in cryptocurrency for price appreciation, others might find benefit in the ability to use crypto as a medium of exchange.
- Outsized Returns: When it began in 2009, Bitcoin essentially had no value. In the following years it rose to a fraction of a penny and then eventually to tens of thousands of dollars.
- More Private Transactions: When you use cash or credit, the transaction history would be recorded, and this record will be available for the banks. Whenever you do a transaction, the bank records it. While it’s worth noting that most crypto transactions are pseudonymous, there are ways to make more anonymous transactions. The blockchain ledger relies on different mathematical puzzles, which are hard to decode. It makes cryptocurrency safer than ordinary electronic transactions.
- Portfolio Diversification: Cryptocurrency has become known as a non-correlated asset class. Crypto markets largely function independently of other markets, and their price action tends to be determined by factors other than those affecting stocks, bonds and commodities.
- Inflation Hedge: Mineable cryptocurrencies with a limited supply cap, like Bitcoin, Litecoin, and Monero, to name a few, are thought to be good hedges against inflation. Inflation has caused many currencies to urge their value to decline with time. At the time of its launch, almost every cryptocurrency is released with a tough and fast amount.
- Cross-Border Payments: Cryptocurrencies have no regard for national borders. An individual in one country can send coins to someone in a different country without any added difficulty. Varied cryptocurrency wallets and exchanges help convert one currency into another by trading in cryptocurrency, across different wallets, and by paying minimal transaction fees.
- A More Inclusive Financial System: Some of the benefits of cryptocurrency is that it extends to people who don’t have access to the traditional financial system. Cyptocurrency payments are becoming more widely used amongst large organisations and in sectors including fashion and pharmaceuticals.
- Transactional Freedom: One of the great benefits of crypto is that it can be used to exchange value between two parties.
- Decentralization: The blockchain technology will manage the database that has the Bitcoin transaction records. The decentralization would involve only two parties in the transaction, i.e., the sender and receiver. You no more have to deal with any third party. There is no one to monitor what you are doing.
If you want to learn more about why people invest in crypto and how to find the right crypto courses in Ipoh, head to our article.
Find Crypto Tutors in Georgetown, Malaysia with Superprof
If you want to learn more about the types of cryptocurrencies and where you can study crypto in Seberang Perai, head to our article.
If you are interested in learning more about crypto and how you can better handle your investments, Superprof has the right resources for you: the best network of private tutors in Malaysia.
If you are looking for a private crypto tutor in the Georgetown area or elsewhere who can teach you everything about crypto through online crypto courses, you have come to the right place.
All you need to do is conduct a quick search on our website and see the available tutors. All the tutors have diverse profiles so it is important that you pick the right one for you.
Make sure you look at the following factors when looking at the tutors' profiles:
- Their professional experience
- Their investment portfolio
- Their interest in the world of crypto
- How long they have been investing in crypto
- Which cryptocurrencies they know
- Reviews from previous students
This will give you a good idea of what the tutor is like.
Once you find a tutor that looks right for you, you can schedule your first crypto course. Typically, tutors in Superprof give the first course for free since it is a good way to get to know each other and establish objectives.
Make sure you ask all the questions you have and set clear goals for your crypto courses. Once you find the right teacher you are ready to go with your crypto classes in Georgetown!
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