Cryptocurrency refers to the digital assets that can be used in place of money but are not money themselves; this is the simplest manifestation of what cryptocurrency is. The paper or fiat money can be converted into cryptocurrency by paying a sum of money to a crypto broker or agency, and they will change that paid money into an equivalent of the crypto that you are buying. Cryptocurrency did start as an unusual concept that was not going to fly but call it dumb luck or whatever; it got rolled into this incredible manifestation of the idea that will change the world of investing for good.
How do cryptocurrencies work?
The first and the largest cryptocurrency by market cap is Bitcoin, trading at almost near to $60k at the moment for one Bitcoin token, followed by Ethereum, the second one of the market cap, and so on so. The basic working standard for any cryptocurrency is the Blockchain technology which is a platform or a system that has all the record about dedicated crypto, i.e., regarding its buying/selling and trading in the form of data blocks that are linked with each other making a long chain thus the term blockchain.
This is what makes cryptocurrency the securest thing to invest in, as it is dedicatedly impossible to break or edit the chain revealing the potential transaction history or the numeric data that provides specific crypto with their fiat price, ranking, and who does it belong to. Every transaction takes place on the Blockchain system, and everything is decentralized, which means that it is not on the radar of any government agency or financial sector, and thus there can be no ties or monetary policies imposed on cryptocurrency.
Elon Musk, along with various other financial influencers, has taken to social media platforms such as Twitter to vouch for the anonymity and safety of investment regarding cryptocurrency, making it a lucrative option kind of a hot streak among the investors. But even so, there are still people out there who don’t believe that it can change the future of investing for good; following are some of the reasons that might help them change their mind;
- Returns on cryptocurrency are incredible.
Yes, it is fair to say that the crypto market is a volatile entity, and you can’t be sure that the value of crypto will rise in the near future, or it would crumble. But if everything kind of sets and remains consistent, you will be absolutely shocked at the returns you get on your investment as these are mind-blowing for sure. The stocks can only go as above as 20% when it comes to the surety of profit, but in terms of the cryptocurrency, the value can be taken all the way up to 100%, which confirms decent returns.
- Extreme volatility
Yes, the cryptocurrency is a bit volatile as there is no second thought about it, and it might come out as something a little negative, but in the world of investing, it is seen as an opportunity, and valid investors might think of it as a strategy even. Cryptocurrency is volatile, which means that it can rise sky high or crumble all the way to the ground, and still nothing can be said about it. But experienced investors might be able to pull some workaround this concept and turn this into solid profit; this, in fact, is a lucrative investment option for those who share a massive experience in the investing market.
- No government interference whatsoever
You will be pretty delighted to know that due to the decentralized blockchain system, no one official government or party can control cryptocurrency or make changes to it or control it. Well, there is no government out there that has any say in it because of the fact that it is a completely decentralized system. National currencies in various regions of the world might have verily depreciated, and a lot of that has to do with the government’s likable interest in that currency. But with cryptocurrency, there is no such problem, and it has fairly given investors around the globe a fair chance to invest and keep inflation off of their backs.
- High liquidity
There are no restrictions when it comes to buying, selling, or even trading cryptocurrency, and a large part of that has to do with no government interference of any kind. This means that the crypto market provides access to high liquidity assets that can be sold and bought easily while maintaining a high-profit margin.
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