Are you still shying away from Investing in Cryptocurrencies?

Money is what our life depends on. It is the ultimate catalyst for humans, and I believe it will always remain so. Whether we accept it or not we do whatever we do in our lives for money. But money has entered a new age altogether and have revolutionized payments. What the internet did to the world for information sharing sometime back, digital currency is getting the same crazy wave across to money & payments.

News stories are being dominated by the world of crypto and it is getting hard to stay away from this wave of a new money revolution. Record breaking price rise on these currencies is giving a FOMO to almost everyone. From celebrities to corporate biggies, all are diving deep into the world of crypto. Are you still shying away or skeptical from investing in this new wave? And, I would say it is usual. It is important to first understand where you want to put your money and be aware the pros and cons.

Unravel the world of Crypto

Bitcoin, Blockchain and Cryptocurrency – these are key terms that everyone should be well versed with before entering the world of cyptocurrencies.

Bitcoin is the most favorite and best-known cryptocurrency to put it in simple terms. It is a decentralized digital currency which exists digitally as a computer code.

Cryptocurrency when broken down is crypto and currency. Currency is just like our dollars and euros while crypto means data encryption. So, cryptocurrency is a medium of exchange for bitcoin which ensures security of digital transactions. It is encrypted data with no physical presence like debit or credit cards.

Blockchain is the technology that enables the existence of cryptocurrencies. It is a digital file that operates on a vast network of computers and is not just exclusive to bitcoin.

Confused? You can be. The world of cryptocurrencies is full of mysteries and not even the investors who are betting money in this understand it fully. You must have read news headlines on the latest trial case that is ongoing to identify who the real creator of Bitcoin is. It is still a mystery as to who developed the Bitcoin- Satoshi Nakamoto is the name we keep hearing, but nothing is confirmed on the same.

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Why were Cryptocurrencies launched?

You all must be wondering if there is already money in circulation -lots if it, and we have been using technology like digital banking to use it efficiently then, what was the need to develop cryptocurrencies? It is said that a flaw in the existing money system gave birth to cryptocurrencies. It is the concept of double spending – What is Double Spending? Let us understand this with a simple example. If you buy a book worth $50, you cannot spend that $50 anywhere else but if the same $50 is paid digitally you can manipulate and use the same amount for other purchases. This is double spending – using the same amount to make purchases more than once. Now, this is not allowed in real world with regulators and banks in place to monitor transactions. In the world of crypto, there are no banks or regulators monitoring your purchases. You as a user control your transactions along with other similar users. It is the Bitcoin or crypto community of users that control all the flow of money. It is considered as a secure and encrypted way of payments. Once you have paid for your transactions, it cannot be reversed at any cost. Volatility is another defining feature of these currencies, their prices fluctuate every single day on any random move. Even a tweet has reported to send these tokens rise drastically. The rollercoaster rises are all driven by demand and supply.

The world of crypto is ever changing and growing. We are living in an age that a parody or meme or a piece of art is worth millions of dollars because a few people believe it is like that. The future of currencies seeing the current crypto currency craze is digital. If you are planning to ride this wave and make crypto investments, it is important to understand that it is a gamble and, in a gamble, winning and losing both possibilities exist, and one should be ready for it. So, enter with caution!

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