Should we invest in cryptocurrencies?

Risks involved in investing in Cryptocurrency :

1. Macroeconomic problems: Cryptocurrencies are being hoarded by people instead of being used as a medium of exchange like a paper note. They are made up of mathematical logarithms instead of being produced by people. There is a limited supply and an excess demand of these currencies. Unlike paper notes, they cannot be produced according to the needs of the macroeconomic environment. Hence, the value of cryptocurrency has been increasing over the period of time. The entire idea of introducing a cryptocurrency as a medium of exchange has pretty much failed because of the investors hoarding to it.
2. Ponzi scheme: A bubble economy can be created because of the increasing investors benefiting off the ignorance of other investors. Essentially, when this bubble bursts, the cryptocurrency will have no value and people will face major losses.
3. Indian elections: The current Indian Election will also create a problem in the implementation of policies pertaining to Crypto currency. During election in India,“Aachar Sanhita” applies. The problem is that India has not introduced any kind of regulation relating to cryptocurrency. After the mining scams that have been exposed in recent times, RBI banned and warned investors against the use of cryptocurrencies. Central government needs to introduce proper legislations pertaining the trading of Cryptocurrencies. Fiat currency is now needed to invest in virtual currency.
4. Bitcoins and other currencies are still tricky to trade: Digital currencies aren’t liquid enough to be included into licensed funds, which have to keep a certain percentage of their money in assets that can be sold quickly if investors want their cash back.

Why should you in invest in Cryptocurrencies?

1. $1,000 invested in Bitcoin in 2013 would be worth over $400,000 today. That is a good enough reason for investors to invest in Cryptocurrencies. The high rate of returns associated with it , attracts a lot of investors.
2. It is very good for start-up firms in order to raise money. Datum launched their ICO in late October 2017, having already raised $1.5 millions in Pre-ICO Funds.
3. Cryptocurrency offers great amount of security. You put your money in your bank and trust its IT department to keep your money and banking details safe. On the contrary, when you invest in cryptocurrency, you are trusting the math rather than trusting people. And, this is what sets this system stand out in the market today. Blockchain technology is the very nature of cryptocurrency that prevents your account from getting compromised by any means. It is this system that investors are rest-assured that there isn’t any chance of anyone getting involved in your transactions, outside of miners. Also, emphasising on the security further, your coin funds are securely locked in a public key cryptography system, which means that only the owner of the private key has the authority to send cryptocurrency. This powerful cryptography security system along with the magic of big numbers has made this scheme impossible to break.
4. Low Transaction Charges as compared to any other money transaction process, cryptocurrency involves lower fees. If you compare these fees to those charged by traditional banks or online payment processors like Stripe, PayPal, etc., you will find a significant difference. This is what makes this currency even more lucrative. The zero or low fees for crypto encourage individuals to become part of this broader trading and the commercial world finally. Cryptocurrency supports the idea of saving money big time by involving the online methods of money transfer and transaction. This can be done by avoiding the lengthy and costly bank procedures to do the same and doing business all with the help of digital technology i.e. cryptocurrency.
5. Different from the standard banking system where your account is created by debt, cryptocurrency doesn’t represent any obligations, except themselves. Whatever is the number being reflected in your wallet is the exact amount of money you possess.
6. It offers diversity in your portfolio.
7. There are more than 1000 different types of cryptocurrencies in the current market. Many of them have viable options with good financial projections.
8. After bitcoin setting a standard for cryptocurrencies, an upper limit has been set by them. According to sources, by 2140 only 21 million bitcoins will be mined. Hence, now is the perfect opportunity to invest in the bitcoins which have an ever increasing demand and limited supply.