Just a decade ago, cryptocurrency was looked at as a farce, or a ponzi scheme, that lacked legitimacy as a real investment path. With public endorsement from financial hubs and notary business figures like Elon Musk, cryptocurrency is now currently accepted at banks and as a valid form for transactions. Cryptocurrency has continued, and will continue, to defy expectations and serve as an alternative to traditional currency.
Before investing time or money in anything, it is very important to have a thorough understanding of what you’re going to be getting involved in. Cryptocurrency is defined as any digital currency that can be used to buy goods and services. Through the use of online encryption, the online ledger is used to secure online transactions. The technology that backs the variety of types of currencies is blockchain. Blockchain is a decentralized technology shared amongst a network of computers that records and manages transactions. The biggest appeal to blockchain is it’s reliability and security that keeps owners safe.
For outsiders, the word Bitcoin is almost synonymous with cryptocurrency. However, there are nearly 7,000 different types of cryptocurrencies currently trading. As of January 21st, 2021 the total estimated value of crypto on the market is nearly $900 billion dollars, according to CoinMarketCap.
Like any investment, the sooner you get in on a trend, the more potential it has to be a hit. Cryptocurrency has worked the same way, with a major allure being the chance to earn great dividends in the future. Another reason that cryptocurrency is very popular is because cryptocurrency takes away the regulation from central banks. If a currency is linked to a central bank, inflation always looms, and the potential of their currency losing value is a very real issue. With the blockchain backing crypto, the decentralized system can be more secure than traditional payment gateways.
Before you get started into investing be aware of the real risks that come with cryptocurrency. It has the potential to be shaky in returns. Unlike a traditional business with cash flow, investing in any currency requires a demand for that currency. The more businesses that endorse crypto, the more the legitimacy and value of the coin will rise. Always check the history to be aware of the dips, turns and potential direction of any investment before you delve in, especially in regards to crypto.
You can do further research and invest in crypto through established platforms like the Coinbase and eToro. The best advice is to start small, be aware and widen your portfolio!