Cryptocurrency- is it a good investment?
In the fintech world, cryptocurrency is a very frequently discussed term, but rarely is it approved as an investment. People are aware of what cryptocurrency is in as much as that it is unlike traditional currency and that it is not stored in a bank but in the virtual space as a digital currency.?
But, if asked to explain in detail, apart from a handful of professionals, not many are aware of what exactly crypto is.?
So, let’s see what cryptocurrency is and if it is a good investment.?
What is Cryptocurrency??
Cryptocurrency or simply crypto is a form of digital currency that uses cryptography for conducting transactions. The primary distinction with traditional currency is that it doesn’t have a central issuer or even a regulatory authority, which could be why many investors are still skeptical about investing in crypto. ?
Cryptocurrency relies on a decentralized digital payment system to conduct transactions and issue new units. No banks are authorized to verify or validate any transaction. There is a peer-to-peer system via which anyone can transfer and receive money. Online database journals every digital transaction.?
The moniker cryptocurrency is attributed to the fact that it uses encryption to verify and validate transactions. Encryption provides security.?
Bitcoin was the first cryptocurrency founded in 2009 and is the most popular. Trading cryptocurrencies for profit is commonplace with investors making a windfall when prices skyrocket.?
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How does it work??
Cryptocurrency is a digital asset, but how does it work? Basically, cryptocurrencies run on a blockchain, a distributed public ledger. It will reflect every transaction completed.?
The process of creating cryptocurrency units called coins is called mining. Coins can be brought from brokers that can be stored and then resold via cryptographic wallets.?
Cryptocurrency doesn’t have any tangible physical element to it. It can be considered as a means by which you can transfer a unit from one person to the other without any intermediary. ?
Though Bitcoin has been around since 2009, it is still only an emerging technology and its potential has not been fully exploited. ?
All transactions including bonds, stocks, shares, and any other financial assets can be traded and transacted using cryptocurrency in the near future. ?
?Examples of cryptocurrency??
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Since 2009, several thousands of cryptos have been created but here are a few most popular summed up just for you-?
Bitcoin?
Bitcoin is the most popularly traded crypto since its inception in 2009. It was a digital currency developed by the pseudonym Satoshi Nakamoto.?
Ethereum?
Developed in 20015, it is a blockchain platform that is equipped with its own cryptos called ether. After Bitcoin, ether is most widely traded. ?
Litecoin?
Litecoin is very similar to bitcoin but was created to make payments faster and develop new innovations.?
Ripple?
Founded in 1012, ripple is a ledger system to track all transactions not just cryptos. The collective name for all non-bitcoin is Altcoin.?
Is Cryptocurrency a good investment??
Investing in cryptos has given some extraordinary results. Still, those ho are new to the technology and its workings of it are more vulnerable to landing in trouble and fraudsters abound in the field who cash in on users’ ignorance to swindle money.?
The gamble is huge because you could become unbelievably rich by investing in cryptos but it can also make you go high and dry. ?
Investing in crypto can fetch you great rewards provided you are well versed in its workings, aware of the market’s fluctuations, and play it safe by investing in diverse portfolios. ?
There is a growing demand for digital assets and this is a good sign to invest in cryptos. You can also gain sufficient knowledge by buying stocks from companies that are exposed to cryptos. ?
Is cryptocurrency safe??
There are a few factors that make cryptos a risky endeavor?
That's for this week's fintech news. We ll come back next week with a another Fintech news!