What is a cryptocurrency? Cryptocurrencies are digital currency built on blockchain technology. Essentially, cryptocurrencies are decentralized and digital money or assets that can be used by anyone and sent freely and directly between people. The word "crypto" comes from the fact that the concept of cryptography is central to blockchain technology.
Yes. Cryptocurrencies are legal. You have the right to buy and sell what you want, whether it is shares, crypto, a used car or most other things. The only thing you need to keep in mind is to pay taxes if you sell your crypto at a profit.
Yes, cryptocurrency is taxable. You can read more about crypto and taxes here.
It depends on which cryptocurrency you invest in and when you bought it. Both Bitcoin and Ethereum have proven to be very good investments over the last 10 years. But prices can fluctuate a lot in the short term, and there are also other cryptocurrencies that have not been good investments. Think long term if you are going to invest in cryptocurrency. It is both safest and easiest.
Bitcoin is the first and largest cryptocurrency. You can read more about Bitcoin here.
Cryptocurrencies are based on blockchain technology. They may work a little differently, but have blockchain technology in common. You should start by reading about how Bitcoin works here. All the other cryptocurrencies are based on the technology that was introduced with Bitcoin.
No. A good thing about cryptocurrencies is that you can buy for exactly the amount you want. You can buy 0.0001 of a cryptocurrency if you wish. The amount you want to buy for is completely up to you.
How to buy cryptocurrencies?
Here at Firi, we make it easy for you to get started with crypto. You can click here to get started, or you can read this guide on how to buy crypto.
NO. Cryptocurrency is a category of digital currencies that contains thousands of different "coins" and "tokens". Some of these cryptocurrencies may be pyramid schemes or scams. But not the whole "cryptocurrency" category. It is a generalization people make due to a lack of knowledge.
The reason why people claim that crypto is a pyramid scheme is related to the following:
Still a bit unsure? If you use the same example with shares, you can say that some shares can be a scam. There are thousands of companies to choose from. Perhaps there is the occasional company that is being run illegally and defrauding investors. Maybe that particular company is a pyramid scheme. But the concept of "stocks" or the "stock market" as a whole is not a pyramid scheme.
Finally - How can you avoid getting defrauded by crypto scams and pyramid schemes? Learn the basics of cryptocurrency and investing. Then you will be able to reveal the vast majority of fraud attempts. Furthermore; Don't take too many risks or blindly trust what others say. Especially not on social media.
Yes, if you learn the basics of how it works. But remember that buying and selling cryptocurrency involves risk, and that historical returns are never a guarantee of future returns.
Since this is a new market and a new technology, there are some pitfalls. One can, for example, send money to the wrong crypto wallet, be exposed to fraud attempts, or make bad investment decisions that result in one losing money. But that being said, much of this applies in the world outside of crypto as well. For example, if you are going to invest in funds, shares, start a business or something else. The conclusion is that you cannot achieve a return without taking a certain amount of risk. If you think long-term, you can also limit the risk.
Fortunately, we make it easier for you to get started with crypto here at Firi. For example, you don't have to deal with the storage of your cryptocurrency, and your money is insured against cybercrime. That's good to know.
It is wise to buy cryptocurrency when you get a good price and the price trend is about to turn upwards. But you have to decide for yourself when you think the prices will rise. Since it is difficult to know when this will happen, the easiest way for many people will be to buy a little at regular intervals. Then you even out the price fluctuations. Read more here.
NB! Remember that historical returns are not a guarantee of future returns. You should not take a greater risk than you can handle.
With shares, you own a part of a company and are thus entitled to a part of this company's profits. Not so with crypto. Bitcoin, for example, is not a limited company. There is no CEO or board of directors for Bitcoin.
It is true that you can get passive income on some cryptocurrencies by locking up your crypto in so-called crypto "staking". You will then receive a yield on your locked up crypto. How this income is generated can vary, but it is usually a result of the so-called "proof-of-stake" mechanism which is utilized by many crypto projects. A cryptocurrency can often be more similar to a commodity such as silver and gold than to a share.
A cryptocurrency is often linked to a blockchain network and will be affected by the value this network creates. Ethereum is one such example.
Tenk deg for eksempel følgende: Vil du si at internettet er verdifullt? Mange vil svare ja, men samtidig så er det ikke ett enkelt selskap som styrer internettet. Du kan ikke se på regnskapet til internett og regne ut en fornuftig pris. Internettets verdi kommer fra nettverket av brukere over hele verden. Vi vet at internett har verdi fordi det brukes av nesten alle mennesker. Men det har bare verdi når vi bruker det sammen. Et internett med 1 enkelt bruker vil ikke kunne eksistere og vil ikke ha verdi. Det er alle mennesker som bruker internett som kollektivt bestemmer hvordan det skal fungere og hvordan det skal utvikles. Og litt slik er det også med blokkjeder og kryptovaluta.
Dessuten kaller man gjerne kryptovaluta for “programmerbare penger” fordi de kan programmeres til å gjøre mye forskjellig. Derfor kan det være mange ulike ting som påvirker verdien, og dette er opp til det aktuelle krypto prosjektet. Til syvende og sist vil det alltid være etterspørselen som bestemmer prisen, og etterspørselen vil styres av hvor mange som bruker kryptovalutaen, blokkjeden eller som ønsker å investere. NB! Husk at stor prisoppgang i kryptovalutaer også kan skyldes ren spekulasjon heller enn verdiskapning.