Bitcoin and cryptocurrency, in general, have generated a lot of interest in the last couple of years. Even if you live under a rock, you’ve at least heard of bitcoin. It is the most valuable cryptocurrency and currently has a market capitalization of $100 billion. Which begs the question, why is cryptocurrency so important? In order to answer this question, there are a couple of factors to have in mind.
No Governing Body
Unlike other forms of currencies, crypto is not centralized. This presents numerous opportunities for individuals. The decentralization of crypto is perhaps one of the main reasons why governments and financial institutions are yet to embrace it. This means that cryptocurrency doesn’t have to follow the rules that are set by the Central Bank of a country.
Why Have Cryptocurrencies Become Popular
It’s easy to transfer funds between two parties. No more wait times which are associated with traditional ways of transacting. The transaction costs are only a fraction of what you’d pay when using a bank or financial institution.
The proponents of cryptocurrency investing have compared it to gold. Gold is always trading high all the time. This is because of the relentless printing of currency by Central Banks of countries. Money easily loses value when there is a lot of it going around in the economy. You can check https://apnews.com/press-release/kisspr/technology-business-cryptocurrency-financial-technology-communication-technology-35834201af228e8f15d44c3dbbd21efe if you’d like to learn how to trade bitcoin. Such platforms have made it easy for people with no trading experience to start investing in cryptocurrency.
There are other central bank strategies such as negative interest rates that affect the value of money. Cryptocurrency can’t be subjected to such austerity measures since it’s beyond the control of a single individual or entity.
Privacy is becoming more important now than ever as tech giants and governments want to know every little detail about your life including the transactions that you make. Even if blockchain keeps a public record of all the transactions that are done, it might not make sense for anyone to try and trace each and every one of them. There is no denying that cryptocurrency is disruptive and that is why banks and investment institutions have started collaborative efforts so that they’re not missing out. One of the biggest critics of Crypto is billionaire Warren Buffet who has been termed it as “rat poison squared”
Not Going Away
Cryptocurrency is here to stay for the long run. If you’ve been observant, there are new currencies being launched regularly. It’s one of the fastest-growing industries in the last decade or so. Big tech companies like Facebook are even toying with the idea of coming up with their own cryptocurrency. Given how crypto has revolutionized how transactions are being done, it’s hard to imagine living without such convenience even as we go into the future.
Should You Care?
You should definitely care given the direction the industry is going. For a bank as big as the Bank of America to develop their own cryptocurrency, it means they’ve already seen into the future. If you have any spare money, investing in crypto will not be such a bad idea. As much as the market is volatile, you can still gain significant traction even if you start small as you build your portfolio.
One thing that you should note is that there are valuable coins outside Bitcoin and Etherum.
There are people that will associate blockchain technology with bitcoin but it’s just the underlying infrastructure. The application can transform nearly all industries. Any transaction that needs recording can benefit from blockchain technology.
What’s The Future of Cryptocurrency?
There are well-known economic analysts that have predicted that crypto will play a defining role as institutional money also enters the market. There are people that are of the opinion that crypto needs a verified exchange-traded fund. This should make it easy for anyone to start investing in Bitcoin and other cryptocurrencies.
Governments obviously feel threatened and there are no proper regulations in place for cryptocurrency. There are some governments that have chosen to ban crypto altogether. This might be due to the fact that they’ve not taken their time to understand how it works taking into account that it has been around for over a decade now.
To sum it up, those looking to invest in crypto need to do their homework. There is a lot that meets the eye and you don’t want to depend on unverified sources to make important financial decisions.