Cryptocurrency uses cryptography as a digital model of currency exchange. Cryptography makes the digital currency exchange safe and secure. Though cryptocurrencies are quite successful in the market, they are often regarded as a monetary experiment. Cryptocurrencies can never replace conventional currencies. Cryptocurrencies like Bitcoin are digital currencies that can be used for online transactions. You can store your digital currencies in your wallet like other digital wallets and use it to make your online transactions.
Fiat Currency Vs Cryptocurrency
Cryptocurrency uses a virtual mode of transaction whereas traditional flat currency uses non-virtual real mode. As peer-to-peer transaction is maintained in crypto investment, and there is no middleman between the sender and receiver. There are intermediate stages if you handle conventional currency like a bank.
For example, you can send money to another account through your net banking, or you can buy a product through your credit or debit card. Banks are working as third-party vendors and you need to pay a hefty commission to your banks for your transactions. Cryptocurrencies are always very portable, as you do not need to carry your physical notes and coins.
Acceptance of particular flat currencies is restricted to a particular country, but you can use cryptocurrencies worldwide without any barrier. For example, you can use a Dollar in the U.S, but you need to convert your Dollars in INR when you make a transaction in India. Similarly, every state or country has their own currency. A central bank controls conventional currencies but the crypto is decentralized, only controlled by mathematical functions.
Points to Know When Considering Crypto Investment
- No bank or country is involved, and it is completely a decentralized process.
- Works fast, and you can transact in Crypto faster.
- Cheap to use as you need to bear less commission.
- Ensures the security of transactions because cryptocurrencies are regulated by blocks and nodes.
- Merchants face fewer risks of hacking or money fraud.
- Collapse risk is almost negligible.
- Very low risk of inflation since there is no regulation.
- Transactions of Cryptocurrency are 100% transparent.
- The public ledger is easily accessible.
- Allows pseudo-anonymous transactions which mean that no identity details of the user would be mentioned.
- Users have an important role in the Cryptocurrency network.
8 Major Types Of Cryptocurrencies With Their Respective Valuation
Except for these 8 major types, there are more than 700 other cryptocurrencies you can invest in.
- Bitcoin- $11.3 bin
- Litecoin- $183 min
- Ethereum- $875 min
- Monero- $94 min
- Ripple- $288 min
- Other 700+ cryptocurrencies- $606 min
What Are Bitcoins?
Bitcoins are often known as digital gold. Satoshi Nakamoto brought the concept of Bitcoins in 2009. It is a revolutionary payment network where there is no role of central authority. The value of 1 BTC is $125.48. It is an open-source system based on blockchain technology. The major wings of the Bitcoin system are mining process, mining hardware, distributed ledger technology, bitcoin wallets and blockchain. The Bitcoin System trading platform has changed the entire scenario of socio-economic conditions globally.
What are the sectors where you can make crypto investments?
- Real estate investments
- Stock investments
- Application platform Cryptocurrency sector
- Sector for gaming rewards
- Sector that deals with social tipping
- Coin exchange sector
- Stable coin subsector
- Subsector of private digital currency
- Sector for financial transactions
Can You Explain Long-Term Crypto Investment?
Here it is expected that the Cryptocurrency would perform better over a certain period of time. Normally people make long-term crypto investments for 6 months to 1 year. Some also hold the time period for 5-10 years or even more. It would be better if you store your Bitcoin for a longer period of time because it is considered a long-term investment. Three benefits of making long-term crypto investment are:
- You do not need to keep track of the market all the time in long-term investment. This would make your life easier.
- Faith in crypto investment would be strengthened over the period of time.
- Hopefully cryptocurrencies will have an increased market value in future. In such a scenario, investors are at the winning end.
So, keeping in mind the above-mentioned points go for a crypto investment that best suits your pocket and plans.