The cryptocurrency market had a good run with its exponential growth this year.

From a total market capitalization of 17 Billion USD for the 600 plus currencies on January first, the market now sits at over 500 Billion USD from over 1300 currencies.

That's 30x growth on the total market cap right there.

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No wonder it has been receiving much attention recently and the public interest doesn't seem to be going away soon.

For those who had been into crypto for a while, I'm sure lots of friends and family have approached you with some questions about crypto. Some would have approached you with words of caution- stay away from cryptocurrency/bitcoin as it is a scam.

The latter I received from an aunt this holiday.

She was concerned that Bitcoin is a scam as she saw a video about a pyramid scam using Bitcoin as their medium. We, @jeanelleybee and myself, attempted to explain cryptocurrency.

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We started with the question-

Why do we accept some printed paper to be of certain value?

We refer to fiat currencies of course. Why are people happy to exchange goods and services for some paper with printed value? This hasn't always been the case. Before, people do straight up trades, like if I have a fruit and you have meat, and both parties are willing to do a trade, then we will happily exchange goods.

From there it evolved to using copper, silver or gold as medium of exchange. Instead of finding a peer whose commodity you'd like, and who would be satisfied with what you have also, people were able to do single trades using gold for example. Sell your goods for gold, then spend your gold as you see fit.

Then we had various fiat currencies- dollars, euro, peso and many more.

What's the commonality of these examples? The community agreed to put value on these items, and everyone recognizes that value.

This is what cryptocurrency is as well. It is in its infancy stage where people are coming together to recognize that these coins or tokens are of value.

If we have a working system, why the need for a new one right, specially with the use of fiat currencies that are backed by central banks?

One goal of cryptocurrencies such as Bitcoin is to eliminate the middle man with our dealings.

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Why do we value middlemen? Because they are the trusted experts in their fields, trust being the operative word.

For example, if you are working overseas and would want to send in money to your family elsewhere, you wouldn't just hand out that money to a random stranger who says they will be flying to the recipient's location and can personally deliver the funds. Instead, you will look for trusted remittance centers because you feel secured to deal with them this way. The remittance center acted as the intermediary between you, the sender, and the receiver.

Of course the remittance centers would be happy to do this for you, for a fee, and within certain timeframe. Normally, if you would want to expedite a process, then higher fees would apply too.

Now, imagine the scenario where a trusted environment has been created, where every transaction is in a public ledger visible to anyone who would care to look. Imagine having the option to send the money yourself directly to the receiver, but still have the same sense of security. Imagine being able to send the funds nearly-real-time.

This is what cryptocurrency, via blockchain technology, offers.

How can one earn via cryptocurrency?

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• Bet against Fiat and Cryptocurrency, FOREX-style

Buying and selling say, bitcoin for fiat is very similar to Forex trades, where you foresee which currency will go up against the other. In the Philippines, there are some who buy Bitcoins via coinsph during dip, then convert back to fiat when up, and basically does only this as their trades.

• Trade Bitcoin for other coins, Altcoins, Stocks-Trade-Style

Others would be more adventurous with their investment, and would actually trade BTC for other altcoins. Some would do short-term to medium term trades.

Short-term trades can be done in matter of minutes, or days. Normally, traders would set a specific percentage-earning target in getting out of the trade. Traders would usually check prices from time to time (if set to hold for a few days) or would have their eyes glued to the screen for a certain period until a sale has been made.

• Invest on Coins Longterm

Hodl is the name of the game.
Basically, select a coin you would want to invest on and you see great potential with, buy the coin and forget about it. The investor would check the prices from time to time, but this is really not a priority as they are in it for the long haul. They also do not mind the price fluctuation and would normally not even consider selling until the coin price is at least 10x. Or something like that.

• Invest on ICO's

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Initial Coin Offerings, similar to Initial Public Offerings, allows investors to get in and buy on a new upcoming project. Some would invest on this for a quick flip, meaning as soon as the coin hits the exchanges, they sell the coins for bitcoin or ethereum at a gain. Some, who have full faith on the project they bought into, would keep the coins and would wait for massive gains.

Examples of ICOs to Watch Out For

• Mine Crypto

Invest on a mining equipment, pick a coin of your choice, and start mining. The coins earned then can be traded immediately or hodl for longterm.

Cryptocurrency is not a scam per se, but it is true that a lot of people use this medium to fool others. Always proceed with caution, and with the knowledge of the risks involved.

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