The world is becoming an increasingly digitized place. Online shopping and transactions are now the norm, along with online banking. Most people in the modern world do at least some shopping on the internet and to do that you must do transactions digitally. For online marketplaces, some people have thought about turning to cryptocurrency as a way to anonymously purchase items and also use it as an investment.
What exactly is cryptocurrency?
Cryptocurrency is a virtual form of currency that is encrypted-hence the name- so that it is almost impossible to create counterfeits or double spend. Since these currencies are not issued under any particular government, they are technically outside the rules and laws of any country.
The first and most famous cryptocurrency is Bitcoin. It was the first pioneer in its niche, and has continuously come in as the most valuable form of cryptocurrency. It was released into the world in 2009 by “Satoshi Nakamoto”; it is unclear if this refers to an individual or a group.
Things to keep in mind with cryptocurrencies
There are some crazy ups and downs when it comes to virtual money; it’s incredibly volatile! For example, in 2017, Bitcoin’s value tipped between $900 and $20,000! It’s very easy to invest heavily while the market is hot and then lose so much if the value swings the other way.
On the whole, not many people truly understand the way cryptocurrency works. It’s still fairly new and mysterious. If something is not well-known, it can be very difficult to ferret out people who do illegal or malicious things. And there are many fraudulent activities that run on virtual currencies. People use the anonymity of cryptocurrency to get away with doing things like conducting shady and suspicious deals on the black market. There’s no good way to keep track of where these currencies come from or where they are going.
Trading in cryptocurrency is pretty much a gamble. The market for it is volatile and unpredictable and can end up costing you far more than you stand to profit. However, if you are secure in your income, and have at least 3-6 months of savings lined up for emergency expenses, then there isn’t much harm in investing a little money in cryptocurrencies.
Invest smart; see how the value of whatever cryptocurrency changes over the course of a few months to a year and make the judgment for yourself if you think it is a smart investment.