The investing journey goes far beyond taking a chance on the NHL picks. Investing takes consistency and projecting for your future which is why many have considered investing in cryptocurrency. Today we look at investing from a cryptocurrency perspective and find out why you should invest in cryptocurrency.
What is Cryptocurrency?
The journey to cryptocurrency began in 1983 when David Chaum had the idea of coming up with an electronic cash system. In 1990 the electronic cash system was released through his then-company called Digicash. In 2008 the idea of having a digital currency was revisited, and in 2009 the world saw the birth of cryptocurrency.
Cryptocurrency is a monetary means of exchange that operates through a computer network making the currency a digital currency. This means that cryptocurrency doesn’t have any physical notes that fiat currencies have. Crypto can be used in the same manner as fiat currencies meaning that you can make and receive transactions if your second party is a wallet holder.
What is blockchain?
Records are made and kept when transactions are made within the cryptocurrency network, like a receipt. These records are kept in a type of ledger called a blockchain. Every single time a transaction is processed and approved, it creates a block. This block is added to a chain of other blocks or receipts, making a blockchain.
Blockchain and cryptography are almost always confused as they both operate to try and keep the network safe. Cryptography is the study and practice of certain techniques that are used to keep the network safe from adversarial behavior or thor parties trying to steal information from the network.
Why Should I Invest in Cryptocurrency?
Investing in cryptocurrency is an amazing thing to do, especially when you’re looking to diversify your investment portfolio. Let’s take a look at some of the reasons why you should be investing in cryptocurrency.
Investing in anything is the same as investing in any business, meaning there’s a risk of losing. Diversifying your portfolio simply means having your money invested in different things that could potentially yield you an income.
It’s important to remember that cryptocurrency is an asset as it holds economic value and can increase in value over time. This means that cryptocurrency falls in the same bracket as real estate, stocks, cash and cash equivalents, and many more.
When something is decentralized, it means that no one organization or party has control or makes decisions within the network. This means that the government and banks have little to no control over what happens within cryptocurrency. This also means that cryptocurrencies are protected from the government and banks to a certain degree.
Always keep in mind that the government has the power to either ban or restrict the use of cryptocurrency, making it hard for users to use cryptocurrency. Some countries may also see cryptocurrency as an asset making it taxable.
Protection from inflation
If you’ve been investing for a while, you’ll understand the concept of inflation. Inflation occurs when the value of a certain currency decreases due to its buying ability. This occurs when the price of things goes up, meaning that you’ll need more money to purchase a few things.
Cryptocurrency is protected from inflation because its production amount is set at a fixed number. The less of something there is, the more it will increase in value, making cryptocurrency free from inflation. It also makes cryptocurrency the perfect investment because it will always increase in value.
It’s important to note that not all cryptocurrency is good cryptocurrency. This means that not all cryptocurrency is a good investment. In recent years there have been many cryptocurrencies have come into the market and not stand the test of time. When investing in cryptocurrency, you will need to ensure that it’s a cryptocurrency that has longevity. Always go with cryptocurrency that has been around for a while, and do your best to research that cryptocurrency’s market.