Tech-savvy digital nomads are using cryptocurrencies to fund their adventurous lifestyle and work in a decentralized, distributed fashion. If you’ve been intrigued by this new form of currency but don’t know enough about it to take advantage of it, this article is for you.
What Are Cryptocurrencies?
Cryptocurrency is a form of digital money. As its name suggests, it uses cryptography to secure and verify financial transactions. Most cryptocurrencies are decentralized, which means that they don’t rely on any single central entity for governance, making them immune to government control and interference.
Any two people can directly exchange cryptocurrencies via the use of private and public keys or purchase them on cryptocurrency exchanges. Cryptocurrency transactions can be carried out anywhere in the world, and they take anywhere from a few seconds to several minutes to process.
Types of Cryptocurrencies
All cryptocurrencies can be broadly divided into just two categories: Bitcoin and Altcoins.
Bitcoin is the original cryptocurrency. It was created in 2009 by an unknown person using the name Satoshi Nakamoto, and it has remained the most popular cryptocurrency to this day. The main technology behind Bitcoin is a public distributed ledger called a blockchain, which is used to record transactions verified by network nodes through cryptography.
Shortly after its release, Bitcoin inspired other developers to create new blockchains, called altcoins. The first altcoin that was introduced to the cryptocurrency market is Namecoin. Today, there are over 3,000 altcoins, and their number is still growing at a rapid rate. Some altcoins are barely distinguishable from Bitcoin, while others are based on completely different technology.
Top Cryptocurrencies For Digital Nomads
The top 3 cryptocurrencies that a digital nomad can use at the time of writing this article are Bitcoin, Ethereum, and Ripple.
- Bitcoin: The original cryptocurrency, Bitcoin has remained at the top since it was first released by an unknown person using the name Satoshi Nakamoto in 2009.
- Ethereum: Taking the technology behind Bitcoin to the next level, Ethereum aims to create the world’s leading programmable blockchain.
- Ripple: Backed by some of the largest financial institutions in the world, Ripple offers advanced blockchain solution for instant global payments.
Pros and Cons of Cryptocurrency
As is the case with all technology, cryptocurrency has both pros and cons, and you should familiarize yourself with them before you plunge in and start exploring its potential.
- Transparency: Anyone, at any time, can verify the validity of cryptocurrency transactions. It’s impossible for any single person to create fraudulent cryptocurrency transactions or manipulate existing ones.
- Decentralization: Almost all major cryptocurrencies are decentralized, which means that they are not controlled by any single centralized entity, making cryptocurrencies extremely resilient.
- Security and privacy: Cryptocurrencies are built with security and privacy in mind, which means that users can expect their transactions to be private. And, to a varying degree, anonymous.
- Volatility: The prices of cryptocurrencies tend to fluctuate wildly, and it’s not uncommon for a cryptocurrency to lose as much as 20% or more of its value in a single day.
- Acceptance: Even though cryptocurrencies are accepted by thousands of businesses around the world, not all countries are crypto-friendly.
- Complexity: The technology behind cryptocurrency is incredibly complex and difficult to understand for the average person.
What Can I Do With Cryptocurrency?
Different cryptocurrencies are useful for different things, but they can all be used for low-cost money transfers.
For example, it currently costs just $0.20 to send a Bitcoin transaction and have it processed within 30 minutes. In comparison, Western Union charges its customers nearly $30 to send money from a credit card to a bank account, and it can take up to several days to process the transaction.
Increasingly many businesses accept cryptocurrency payments directly, mainly Bitcoin, making it easy to purchase various goods and services without a bank account, which is something all digital nomads can appreciate.
Some see cryptocurrency as a great investment, hoping that it will one day replace traditional, government-issued money and exponentially increase in value. As a money-savvy digital nomad, you might want to consider doing the same.
Are Cryptocurrencies Legal?
The legal status of cryptocurrencies varies from country to country. In the West, it’s generally legal to use Bitcoin as a currency. The European Central Bank even classifies Bitcoin as a convertible decentralized virtual currency, and the same goes for the United States Treasury.
Unfortunately for those digital nomads that prefer exotic destinations, there is much less support for cryptocurrencies in Africa, Asia, and South America. The list of countries that have made cryptocurrency (not just Bitcoin) illegal and prohibited its purchase, sale, use, and holding includes Algeria, Egypt, Morocco, Bolivia, Columbia, Ecuador, and Nepal.
China didn’t made cryptocurrency illegal, but it doesn’t allow financial institutions to facilitate cryptocurrency transactions. Similar restrictions also exist in Taiwan, Cambodia, Indonesia, Thailand, Vietnam, Brunei, Saudi Arabia, Jordan, Iran, and Canada.
If you’re curious and ready to explore the exciting world of cryptocurrency, our collection of cryptocurrency resources, which includes links to websites, exchanges, and useful tools, is the perfect place to start. Also you can check out our post Digital Nomad Lifestyle: Make money while travelling.
- Twitter: Just about everyone whose opinions matter has a Twitter account, and the CEOs of major crypto companies, developers, journalists, analytics, and large investors are no exception.
- Reddit: The social news aggregation site Reddit is home to multiple crypto communities, including /r/cryptocurrency, /r/btc, or /r/ethereum.
- Medium: Some of the best articles about cryptocurrency ever written have been published on Medium.
- CoinDesk: Specializing in bitcoin and digital currencies, CoinDesk is one of the most popular blockchain news sites.
- CoinTelegraph: A great alternative to CoinDesk when it comes to news about the crypto industry.
- Coinbase: Operating in nearly 200 countries worldwide, Coinbase is one of the most popular cryptocurrency exchanges in the world.
- Kraken: This US-based cryptocurrency exchange is consistently rated as one of the most trusted cryptocurrency exchanges on the market.
- Bitstamp: Based in Luxembourg, Bitstamp is a European-focused alternative to Coinbase and Kraken.
- Bitfinex: Offering the most liquid order book in the world, Bitfinex allows users to easy exchange many different cryptocurrencies.
- Binance: This global cryptocurrency exchange provides a platform for trading more than 100 cryptocurrencies.
- Telegram: With its support for large group chats and strong emphasis on security, Telegram has become the instant messenger of choice for many crypto enthusiasts.
- BlockExplorer: This web tool that provides detailed information about Bitcoin blocks, addresses, and transactions.
- Exodus: As one of the most popular cryptocurrency wallets, Exodus makes it easy to send, receive, and exchange cryptoccurency.
- TREZOR Wallet: A leading hardware cryptocurrency wallet that makes it incredibly straightforward to secure all digital assets.
- Ledger Nano S Wallet: Another popular hardware cryptocurrency wallet that stands out with its sleek design and bullet-proof security.