Cryptocurrency has surged in popularity in recent years, with investors hoping to make money on the long-term upswing of this relatively new form of money and technology. The truth is that cryptocurrency and bitcoin, its most popular and well-known form, are risky investments and not suitable for all investors. If you’re interested in investing in cryptocurrency or bitcoin, this guide will help you understand the pros and cons of crypto investment so you can make an informed decision about whether it’s right for you.
1) Introduction
One of these days, someone is going to explain to me why we use US dollars as our currency. To me, it’s ridiculous that paper notes are worth something; it’s completely illogical. But as long as people (especially banks) trust those notes, they’re valuable. It would make much more sense for a nation’s currency to be backed by something – anything – instead of being a pure fiat currency. Luckily for us geeks, there are plenty alternative forms of money that don’t involve a central bank or government approval. The most popular? Cryptocurrency.
2) What is Crypto Currency?
Crypto currency is digital currency, meaning it’s money controlled and stored entirely by computers spread across a network. The most popular form of crypto currency is BitCoin (BTC), which has become more stable than gold; however, there are other crypto currencies out there like Etherium (Ether). Crypto currency has no central bank regulating it. Each system runs off its own technology based on mathematical algorithms that verify transactions. This means that each crypto-currency operates independently, unlike fiat currencies like US dollars or euros which are backed by governments. These virtual currencies are created by mining them out of a global network of computers using complex mathematical calculations. People who use their computers to do these calculations get paid in new virtual money for their trouble.
3) Pros of Crypto Currency
As you’re investing, you should be well aware that it comes with risks. First, cryptocurrency isn’t nearly as widely accepted as traditional currency or investments—and if everyone decided to quit using it overnight, its value would drop precipitously. Second, there are cybersecurity concerns; exchanges have been hacked before (Mt. Gox was one example), so if your coins aren’t stored properly or passwords aren’t updated regularly, they could be lost forever. If your coins are stolen because of an exchange hack, don’t expect any help from cryptocurrency providers—they won’t reimburse you for lost coins regardless of who’s at fault.
4) Cons of Crypto Currency
Crypto Currency is a fairly new investment option, but it has a lot going for it. However, there are some drawbacks to investing in Crypto Currency as well. Listed below are some of them: The Volatility: There is no denying that Crypto Currency can be very volatile. Every investor needs to know that the value of their investment can rise or fall over time and will need to be ready for it. This kind of volatility is just one reason why investing in Crypto Currency might not be right for you right now – if you’re looking for more stable returns, then trading your funds or using them as collateral on a loan might be better options.
5) The Future of Crypto Currency
The crypto currency market has been on a roller coaster ride since 2009, when it was launched. In 2017, many professional investors have been pumping money into crypto currency to profit from its gains. But while some people are eager to invest in a new asset class, others are skeptical about putting their hard-earned cash into a new form of currency with little government oversight. To get a better understanding for what crypto currency is, how it works and whether or not you should put your money into it, here’s a quick guide to everything you need to know about investing in bitcoin.
Conclusion:
Cryptocurrency, or virtual currency, is quickly making its way into the public consciousness, with lots of people trying to figure out how it works and where to buy some of their own. But what’s behind the hype? Is crypto just another bubble on the horizon or can it be used as more than just a fad? In this article we’ll take a look at what bitcoin and other cryptocurrencies are and how they work, as well as some of the pros and cons of trading them.
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