A cryptocurrency is a virtual or digital currency that is designed to serve as a medium of exchange. Cryptography secures the asset and its transaction. Hence, this has made it difficult to counterfeit, create additional units or double spend it. Therefore, many people now ask themselves – should I invest in cryptocurrency?
The ordinary currencies like dollar, euro or pound have centralized central banking systems as opposed to the cryptocurrencies, which applies decentralized control. Thus, it is immune from government interference and control.
Each cryptocurrency has its decentralized control that works through blockchain. It is a distributed ledger technology and operates as a financial transaction database for the public.
However, even with this background information, you may be still be wondering whether you should invest in cryptocurrency.
Why Is Cryptocurrency So Popular?
In late 2008, we heard the first news about Bitcoin, and since then, almost everyone across the globe is discussing cryptocurrency.
The increased attention about Bitcoin may have appealed to you and moved you into seeking more information about the cryptocurrency. Now, you may be thinking about investing in cryptocurrency.
Factors that have contributed to the popularity of cryptocurrency:
- Major companies have started to recognize cryptocurrency as a medium of exchange. They include Expedia, Overstock, PayPal, Shopify, Subway and Microsoft among others.
- You don’t need any paperwork since you carry out your transactions online and the contracts are easier and faster.
- Your transactions are verified, encrypted and kept in blockchain, hence secure.
- It is a cost-effective option of sending money across borders without incurring any foreign transaction fees.
- Several notable investors are investing in digital currency. They include Google Ventures and Accenture, and therefore, you don’t want to be left behind.
- It is becoming easier to crack the algorithms as a result of improved technology. For instance, it gets easier solving the mining transactions, and miners no longer need sophisticated equipment like before.
Advantages of Investing in Cryptocurrency
The virtual currency has a huge potential of changing society and accountability. Thus, the following are the reasons why you may consider investing in cryptocurrency.
The Unparalleled Transparency
The use of digital currency is anonymous. Blockchain or open ledger help to secure transactions. As a result, you can access the data, which is an added advantage if you’re looking for a more transparent banking system.
The virtual currency is accessible at any time. Hence, you can transact whenever you want. You can also transact using your mobile device; thus, you can still invest or transact in Bitcoin, Ether or Tron, even with limited knowledge in technology.
As indicated above, the currency is unregulated. It is also unbound to custom adjustments and unaffected by changes in the political atmosphere. This is because it is entirely anonymous. Therefore, if you value your privacy and security, then you should invest in cryptocurrency.
Disadvantages of Investing in Cryptocurrency
Difficult to Understand
Hence, one of the challenging obstacles in your journey to investing in cryptocurrency is that it’s a difficult subject to understand. It is not easy to grasp the concept of a decentralized financial system and blockchain storage. Thus, if you’re not a tech-savvy, you may be wary of venturing into it and enjoying its benefits.
Today, many people use the digital currency as a means of investment. Therefore, another way the currency can be used is for gambling, buying other assets like houses or cars, as well as buying tickets to sporting events. As a result, the currency has high volatility.
No Security When a Loss happens
You can be scammed if you don’t have enough experience. Unfortunately, such a mistake can’t be reversed. Therefore, before investing in digital currency, ensure that you’re aware of safety risks that are involved, and treat the virtual currency as real money.
The answer to your question as to whether you should invest in cryptocurrency is yes. The popularity of these currencies is growing, and businesses are racing to keep up with the demand. Therefore, you need to not only keep an eye on this technology, but you should also invest in cryptocurrency as the interest spread globally.