5 Types of Cryptocurrency Customer & What Coin is Best for Each

Cryptocurrency is in a boom period; Bitcoin is all over the news and is attracting new and old investors. The use of virtual currencies is on the increase in almost every industry. As the cryptocurrency world enlarges we can see the scope of what type of people are involved. There are so many ways that cryptocurrency is used, as a currency or an investment, and even the blockchain technology that underlies the security of the network is seeing use in external applications. Here are examples of the seven most common types of cryptocurrency users today.

5 Types of Cryptocurrency Customer & What Coin is Best for Each

The Miner

To understand what a cryptocurrency miner is, we need to look a little into the history of cryptocurrencies. It all started with Bitcoin, and who exactly was the inventor or inventors of Bitcoin is unclear. The name attributed to the founding of Bitcoin is Satoshi Nakamoto, but this is a pseudonym. How Bitcoin and every subsequent crypto coin works are by allowing users to ‘mine’ coins. The miner uses software and hardware to solve complex equations that provide the encryption required to keep every transaction on the ledger secure. Once a crypto coin is mined we can do several things with it; keep hold as an investment, use it to buy goods and services, or convert it to a traditional currency.

Best Currency: It used to be Bitcoin, but returns are less than the early days, so Etherium would be the best way to go.

The Day Trader

Day trading has long been a strategy for those involved in the stock market. Simply put, day trading is where an investor buys and sells within the same trading day, keeping a close eye on the rises and falls in value. Cryptocurrencies are traditionally more volatile than other investments, which allows them to be the perfect vehicle for day trading. As with any opportunity to make a quick profit, there is a tangible possibility of making losses as gains.

Best Currency: We need a currency to be volatile for day trading to work, and for this reason, we would select Monero for the best potential returns in day trading.

Long-Term Investor

As much as the day trader is an attractive option to make a quick buck, it’s often better to take a long-term view. Stability eliminates the likelihood of losses. It’s not to say this strategy is not without its risks, but we at least have the possibility of recovery when things don’t go to plan. If we take the famous example of the 2017 crash in the value of Bitcoin, investors could be forgiven for pulling their investments at that time. But Bitcoin has bounced back, and we all aware of the news reports heralding the vast increase in value from last year to this year. Any long-term investor who held firm and rode out the storm has seen the benefit.

Best Currency: For the long term, we would go with an established coin that is likely to offer a steady return, and for this reason, we choose Ripple as it’s making inroads in the mainstream financial sector. Stability makes Ripple look good for the long term.

The Shopper

For most businesses, the involvement of the general public is what makes it a global success. Even for industries that don’t directly link to the end consumer, it is society-wide use of a product or service that ultimately makes it. Take mining as an example, actual mining, not of cryptocurrency, and we could argue that mining of metals does not have any individual public customers. All trade is business to business. But if you follow those goods further down the chain you can see that everything they are used for is to the benefit of individual consumers. We can see examples such as cell phones, building construction, or even food packaging.

Specifically for the cryptocurrency industry, we have seen an increase in use as payment in everyday life. We initially saw a trickle of activity, mostly within the tech community or hipster cafés and other venues. But we are now seeing an acceleration of traditional and big businesses accepting cryptocurrency, especially Bitcoin. Big players such as Microsoft and Burger King, amongst others, are now taking Bitcoin as payment. Since any shopper can easily find out how to buy cryptocurrency in Canada and then use that balance anywhere that accepts it, we will see a good amount of expansion in this sector over the next few years. It also allows shoppers to make international transactions easily, as there is no foreign transaction fee incorporated into the cryptocurrency system.

Best Currency: For shopping, there is a clear winner, and it’s the old classic of Bitcoin down to the simple reason of acceptability. You can spend Bitcoin in way more places than any of its rivals.

The Criminal

In the early days, one of the image problems cryptocurrency had was the image that it was linked to criminal activities, and although there has always been an attraction to that sector, it’s not the whole story. Given that one of the appealing factors of cryptocurrency is its privacy and difficulty to trace, it’s no wonder that it has been used in criminal enterprises. Consider trying to ensure a transaction that was untraceable, for example, kidnapping and ransom you can see why you would prefer this method to a bag of cash. But although it is still an issue, we can see that the percentage of criminal transactions is falling compared to legal activity. This is always going to be an issue, but it shouldn’t reflect poorly on the currency itself, how many crimes are committed that involve dollars, euros, or pounds, and we don’t hear calls to ban those currencies.

Best Currency: Surprisingly, when we look at it, many of the attractive features that draw the shopper are the same for the criminal, acceptability, and ease of use make Bitcoin the natural choice here are well.