5 Things You Should Know Before Investing In Cryptocurrency!
Cryptocurrency is making its presence felt in the world markets for sure. However, as is with all investments, you must know what you are getting into before you take your investment decision.
Cryptocurrency is what we thought the future would be two decades back. Anything virtual has always caught the attention of people across the world. In the field of finance, cryptocurrency is leading the way of virtual reality by being the first 'digital currency'. The fact that it is mined through solving complex mathematical equations on a software makes it even more intriguing.
Cryptocurrency has two unique features. Firstly, this is mined through a software. There is a specific combination of the 64 digits that creates the perfect code for one coin of cryptocurrency to be mined. This means that this is a complicated task. Also, the fact that it is a derivative of a mathematical equation makes it a novelty and there can only be 21 million in existence. This makes it a limited resource and hence, getting into it earlier than others would be profitable.
The second unique feature of cryptocurrency is its pseudo anonymity. If you have purchased cryptocurrencies, then the wallet provided to you is also encrypted and not on your name. Further, when you use the coins from your wallet, you will need to provide a 'password' which is essentially a mathematical code that will provide you access to these coins. This process happens every time you wish to make a transaction. Unlike other wallets, this is an encrypted wallet and online cryptocurrency providers like Indus Coin use this feature to keep your wallet secure from hackers and viruses.
While we discussed about the ease and flexibility of cryptocurrency, there are also some aspects that you should be aware of before you make your investment decision.
Here are 5 things that you should know before investing in cryptocurrency.
- It Is Decentralized
So far we have always been using currency that has been issued by a bank or a financial institution. Cryptocurrency, on the other hand is decentralized and can be procured only through specific online providers. One such company is Indus Coin that offers cryptocurrencies. Since the concept is relatively new, these online providers may also hand hold you for some time to assist in your trading and investments decisions.
Decentralization also means that some Governments may not approve of usage of cryptocurrency. This did happen in the past when there was a buzz around Bitcoin cash being introduced that would further speed up the transactions instead of Bitcoins (a type of cryptocurrency). However, soon it was business as usual as these rumors were unfounded. The point here is that cryptocurrency will never be owned by any Government, however, its usage and trading is not barred so far. In fact, CME Group, world renowned options and future exchanges owner announced recently that it would offer cryptocurrency by the end of this year. This means that cryptocurrency is here to stay!
- It Is A Limited Resource!
Cryptocurrency is mined and hence like all things mined for e. g. gold, coal etc, this is also a limited resource. There can only be 21 million coins that can be in circulation. As time will go by, the mathematical problems needed to derive these coins would become more complex in nature. This is because all the coins that have ever been mined belong to specific blocks. With each transaction of the specific Bitcoin, the block adds some mathematical data to it, thus making the block longer and difficult to decipher.
Whatever is limited and scarce will always have a premium attached to it. So, if you make the decision to invest in cryptocoins now, they may end up getting you exorbitant returns in the future as and when they will get sparse. The same happened with many cryptocurrency owners who bought their coins in the decade starting from 2010. The value is expected to increase by 20 times by 2040. Bitcoin price x2 double your btc moon bitcoin live
- It Is Not A Fool Proof Concept!
Cryptocurrency is essentially a software generated currency and therefore, the risk of your wallet getting hacked or infected by a virus always exist. Having said that, the cryptocurrency providers like Indus Coin have their mechanism in place to safeguard your investment, but the risk remains the same as it remains with your existing online bank accounts. This should not be a deterrent to your investment decision, however being aware is always wise.
- Beware Of Fake Sellers
Cryptocurrency is a sought after virtual commodity at this moment. Popularity will always attract malpractices as some miscreants will try to make money riding on this wave. If you are looking to invest in cryptocurrency, make sure you only go with reliable suppliers. Since there is no authority that certifies the providers, you have to use your own discretion and take feedback from other investors like you. Sources like Indus Coin exchange are reliable and trustworthy. You also need to ensure that you transact directly and not trust any other person who may claim to get you cryptocurrency from an 'authentic' source.
- It Is A High Risk, High Reward Product
Hardcore investors thrive on the concept of 'high risk, high reward'. This is a product for such people. You can use cryptocurrency for trading or investment purposes. You can also use it for your online transactions if it is legal in your country. While the short term risk is high, the rewards associated are also disproportionately high.
Cryptocurrency is based on a simple yet sound monitory policy. You can use cryptocurrency from anywhere in the world and transact to anywhere in the world. The transactions are fast as there are no middlemen involved. Also, as you explore the world of cryptocurrency, you will realize that it is extremely transparent and you can see when and how many cryptocoins are being generated and circulated. This money will always be censorship resistant and attract no transaction charges or taxes. This is the future of money, and if you are an investor, then better to invest now than later.