The exponential growth in digital currencies has been amazing. The rise of cryptocurrency is largely due to people purchasing bitcoin (BTC) or ether (ETH), via sites like Altalix.
There are many different types of investment products that blockchain offers, including non-fungible tokens or decentralized financing. These investments are believed to lead to a new generation in digital currency billionaires or millionaires. Many people are curious if there is an compelling reason to invest with digital currency. We will be talking about some of the possible reasons that people might choose digital currencies.
Are they a transformative tech?
Blockchain technology underpinning bitcoin and other cryptocurrency is being called a game changer in many industries. This includes healthcare, banking, supply chains and shipping. Distributed ledgers enable new forms and types of economic activity by removing intermediaries and trusted actors from computer networks.
You can make a lot of money investing in cryptocurrency if your faith is in the future. If you believe in this promise cryptocurrency investing can offer you a way to make high-returns and support the future technology.
A stable, reliable, and uncensored store of value
Another reason that people invest in cryptocurrency are to have a stable, long-term source of value. Most cryptocurrencies cannot be used for fiat money because they are in limited supply. It is impossible for any government agency, political body or individual to decrease their value by inflating the coins. An agency government cannot tax or seize tokens that aren’t encrypted because of cryptographic nature.
The cryptocurrency’s unique property will appeal to those who fear hyperinflationary or bank failures. Bitcoin’s deflationary properties, censorship-resistant, and other features have drawn a lot of attention. It has been called “digital silver” by some of its advocates.
Potentiality or speculation?
Many supporters believe digital currencies can be a part of everyday life. However, cryptocurrency trading is mostly speculative. Studies of blockchain activity show that exchange trades remain the most prevalent use for cryptocurrencies–and account for far more economic activity than ordinary trades and purchases. Warren Buffett (CEO of JPMorgan), Bill Gates (CEO) and Jamie Dimon (CEO at JPMorgan) have warned of a potential crypto bubble.
But cryptocurrencies aren’t the only ones at risk of speculativemania and irrational excess. Other assets have also been affected by market bubbles like tech stocks, cannabis stocks, precious metallics and houses. Many investors lost all their money.
It’s normal to speculate in cryptocurrency because it’s new technology. This is especially true in light of the development of blockchain technology. New investors should avoid falling for psychological traps, such as Fear of Missing Out or Herd Intuition. These psychological traps can mean the difference between taking calculated risk and being foolish.
Scams, Thefts and Other Losses
Cryptocurrency has a significant risk. The user has the responsibility of keeping the cryptographic keys which control their blockchain address and doesn’t need to be stored by any central intermediary. Investors interested to explore digital currency must be aware of the many security precautions that must be taken. But, hackers may constantly improve their methods and these security measures are not sufficient.
Hackers have stolen tokens worth millions of dollars from ordinary users and exchanges. You can also use other tricks to get token holders to give up their tokens. These include market manipulations, double scams, and social engineer.
They are also a serious threat. Digital wallets do not work like other apps. Passwords can be lost or forgotten and cannot reset. The loss of hundreds and millions of cryptocurrency can be caused by forgotten passwords or lost devices.
Passionate Writer, Blogger and Amazon Affiliate Expert since 2014.