As the 2010s began, a new trend within investing began to spread like wild-fire throughout financial markets. This trend, which also doubled as a new form of currency, is referred to as cryptocurrencies and now represent one of the most rapidly expanding trading options in present day South Africa. Most dramatically represented in 2017, the price of Bitcoin grew from 60,000 rand to 250,000 rand. This surge, led by the rise of cryptocurrencies, has changed the South African investment market.
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What Is A Cryptocurrency?
A Cryptocurrency refers to a form of digital currencies that are created and maintained through encrypted block-chains of data. A block-chain virtually functions as a growing list of ledgers which only record the key number of the currency, therefore giving the currency its value. It allows users a freedom of anonymity, along with having a value that is unregulated by current government markets.
In the beginning, the most famous cryptocurrency was Bitcoin but it has now grown to over 1000 different exchanges of cryptocurrencies, all with their own price and worth. It was possible for home investors to ‘mine’ for coin, which meant utilizing a devices processing power to complete complex algorithms. Due to how much power it would draw in order to obtain more bitcoin, this practice has since been deemed obsolete by technology primarily made to support further mining of each cryptocurrency.
As the price grew, so did the number of bit-coin, and the traditional model for obtaining it changed from solving algorithms to purchasing and trading the coins itself.
How Do Cryptocurrencies Work?
Utilizing a block-chain, a coin holder’s key is logged in a series of electronic ledgers, effectively backing up the price of Bitcoin or of the cryptocurrencies within a user’s possession. Using what is called a ‘wallet’, or a larger ledger consisting of multiple block-chains, users are able to store their keys in their local databases.
Cryptocurrency in South Africa
For South Africans investors, if they wish to purchase any cryptocurrency, it must be through using your traditional Rand through an electronic forum. On our website, our trusted cryptocurrency dealers allow the average South African to have direct access to the world’s most expansive financial sector.
While some in the past have been hacked by thieves, most are insured and are known to replace any money that is lost. This level of security, unparalleled with other investment funds, has led to a surge in the price of coin.