Cryptocurrency is an internet-associated currency that uses cryptography to track transactions and transfers, the method of transforming legible information into an almost uncrackable code.
Cryptography emerged in the Second World War. It has developed with elements of mathematical theory and computer science in the digital age to become a means to secure online communications, information, and money. Bitcoin was the first cryptocurrency created in 2009 and is still the best known.
How do cryptocurrencies work?
Cryptocurrencies use decentralized technology to allow users to make safe payments and to store money without using their identity or going through a bank. They run on a decentralized public ledger called the blockchain, a database of all payments that currency holders update and keep.
Cryptocurrency units are generated through a process called mining, which includes using computer knowledge to solve complicated coin-generating math equations.
Why would you use cryptocurrency?
The following are the six reasons that will tell you that cryptocurrency is the safest investment:
Cryptocurrencies are more efficient than any other investment. The highest return you can expect from US stocks, for example, is about 20 percent, which is regarded as a very strong result.
With major wealth shareholders, forecasting a stock market crash in 2020, cryptocurrency may be a good alternative towards other traditional investment solutions as the prices appear to increase as living costs decrease.
Your money belongs to you:
Cryptocurrencies give you an unattainable degree of freedom from other means. You are at the mercy of other people and organizations, while you keep your money in a bank. At any moment, the bank can restrict or close your access to the money that is rightly yours outside of government structures. With cryptocurrencies, the money just belongs to you and will remain yours forever. You are not dependent on the financial institutions to retain or move it. You don’t have their exorbitant fees to pay.
One of the main focuses of any commodity is its liquidity – that is, how easy it is to buy or sell it at a price that is similar to the market rate. Cryptocurrencies have very high liquidity – you can invest cryptos easily, and the technological organization of stock exchanges allows the use of a wide variety of tools and tactics, such as limit-orders and algorithm-based trade.
Simple and easy:
It is traditionally difficult, frustrating, and time-consuming to get into any form of investment, stocks, or bonds. Many investment opportunities have an extremely high entry threshold – you can’t just invest 100 bucks; to get started, you need a much larger amount at your disposal.
On the other hand, in cryptocurrencies, you don’t need to treat any institutions, sign papers, or visit banks. You just create an account, get a wallet, and track all of your assets without any effort.
A much better approach is a long-term investment – at present, most cryptocurrencies are going through a downward trend, but most projections are optimistic and will show growth in two to five years. And when we say “progress” concerning cryptocurrencies, it is always intense.
Hence, like every other potentially high-return investment, cryptocurrencies bear a specific danger – but it is more than balanced by the degree of independence that they provide.