How the cryptocurrency market works: podcast “What has changed?”

The first cryptocurrency appeared ten years ago, but there is still no clear opinion about digital money in the world. Is this market reliable, why it needs to be controlled and how to make money on it – in the Trends podcast

Together with Mikhail Tetkin, editor-in-chief of -Crypto, we discussed why digital money should not be feared and how the crypt differs from the state currency. Anatoly Radchenko, a trader, explained why bitcoin is a convenient form of money and how to store crypto in a wallet.

The host of the podcast is Max Efimtsev, an adept of modern technologies, an influencer, and an SMM specialist.

Technology is available to everyone

Bitcoin is an open project. It does not belong to anyone and anyone can contribute to the development – add code, make their own cryptocurrency based on bitcoin, create a company.

One example of such an open source company is the Linux Foundation. It is a non-profit development company for the Linux operating system. There is no specific person, director or CEO behind it – it is a community of people. Users decided to create a consortium to add value to the product and develop it together.

Gray schemes and crime

Despite the fact that many associate cryptocurrencies with the “black market”, in fact, fraudulent schemes occupy only 2,5% of the cryptocurrency market.

For example, the main institutions for money laundering are banks. They pay billions of dollars in fines every year for illicit money flowing through their networks. Cryptocurrency in this sense is much more transparent, because it is easier to track. There are special programs on the exchanges that analyze the entire blockchain and understand where the coins came from, where they were transferred, and completely track their path. If it is noticed that part of your cryptocurrency was seen in criminal schemes, the exchanges will not take it.

State control is good for everyone

Although governments of countries cannot control the space within the blockchain and the cryptocurrency itself within the network, they can control the moment when digital money comes into contact with state property – for example, they are exchanged for real currency. In this sense, state supervision is even useful, because thanks to it, investments in cryptocurrency are protected. Such initiatives protect people from fraudulently obtained money.

In addition, if you want to register a cryptocurrency wallet, you need to provide the exchange with your passport details and address, which makes it easy to trace the sources of suspicious transactions.

Traders pay taxes

In countries with cryptocurrency regulation, your personal data that is provided to the exchange is immediately sent to the tax office. So, for example, it happens in the USA: most traders living there declare cryptocurrency. It is quite possible that a similar system of taxation will come to other countries, including Russia, Radchenko believes.

In some cases, investing in state currencies is riskier than bitcoin

Since the cryptocurrency does not belong to anyone, in the event of a depreciation, there will also be no one to go to. The same thing happens when the national currency depreciates, says Mikhail Tetkin.

For example, in Venezuela, where there was hyperinflation, people lost most of their savings. This suggests that you should not rely on real money, but at the same time do not trust the digital currency.

In other countries where devaluation and inflation were observed, there was sometimes an increased demand on cryptocurrency exchanges – their rate even exceeded the market average. This happened because people were trying to save their savings and saw cryptocurrency as a more reliable way to invest.

How to make money in the long run

To make money on investments in cryptocurrency, you need to diversify your portfolio as much as possible, not try to speculate, and also remember that, like in the stock market, any sharp jump is followed by a rollback.

Stormy times do not greatly affect the rate of cryptocurrencies, they quickly adapt to changing market conditions.

Separately, you can consider investing in coins of private companies. For example, in the West, investments in the cryptocurrency of football clubs are popular. You buy digital coins, and in return you get, for example, autographs of football players, the best seats in the stands and the ability to choose songs that will be played during breaks.

How to mine cryptocurrency

Now the complexity of cryptocurrency networks is much higher than a few years ago, so huge mining capacities are required.

But on the market there was an iteration of mining – “staking”. It gives you the opportunity to buy cryptocurrency and deposit it, and the exchange will pay you dividends. At the current stage of market development, it is much more profitable and reliable.

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