A cryptocurrency, crypto-currency or crypto is a collection of binary data which is designed to work as a medium of exchange. An individual coin’s ownership records are stored in a ledger (a computerized database using strong cryptography to secure transaction data and to protect the coin). Sometimes the owner of the coin may keep it as a deposit with the coin issuer and in return, they get some interest on it. This is called staking which is similar to that of earning interest for the money we keep in the bank. But one should start investing in crypto for a variety of reasons. Given below are the top ten reasons why one should invest in crypto-currencies:
- It gives you control over your asset:
The greatest advantage of crypto is that it is one of the most decentralized assets out there and one can control and store them without the involvement or need of a third party. The value of this asset is not determined by some exchange or middleman but rather the demand and supply for the coin. This gives traders maximum liberty to avail of maximum profits.
- Good protection against inflation:
Cryptocurrencies like Bitcoin and Ethereum, as well as any other fundamentally sound coin, have a global market value. Such coins tend to have a limited supply and are extremely valuable. Their value will never drop too much and they provide good protection against inflation. This proves that the coins’ purchasing power increases over time and buying them will give you amazing returns!
- The easy ability to hold it on a long term basis:
One of the most compelling arguments to invest in cryptocurrencies is that it is simple to hold for the long term. Cryptocurrency became insanely famous is because governments do not have much influence on it and have been giving huge returns over the period. For example, in 2011 the price of Bitcoin was hovering around $10-$11. However, when you now look at it, it is hovering at $40,000. This is one of the greatest advantages of crypto.
- It is transparent and secure:
Cryptocurrencies are popular due to their thorough transparency, owing to open-source software and publicly-verifiable technology. Since they are on a publically-verifiable technology, all the digital currency payments are recorded and monitored in a public ledger. This makes them extremely transparent. Moreover, these ledgers cannot be hacked or manipulated easily, making them free from corruption. In 2009, Bitcoin was the first open-sourced cryptocurrency that was released. Since the inception of Bitcoin, many other cryptocurrencies were released and created.
- A good choice for long term investment:
Who does not want a nice and hefty bank account once they retire? Everyone does! Sure stocks, mutual funds or index funds give you nice returns but crypto gives you much higher returns (since cryptocurrencies carry a much higher risk their value might go to zero, so please do rigorous research before choosing a coin). As stated in point number 3, Bitcoin gave more than 10,000% returns in the time frame of 7 years! Even the traditional do not give such high returns in such a short amount of time!
- 24 hours trading:
One of the biggest advantages to invest in a cryptocurrency is that it is traded continuously throughout the day! A person can buy any crypto at any point in time without fear of missing out! Moreover, those who wish to trade are lucky! Due to the 24 hours accessibility to crypto trading, traders can diversify their portfolio in other coins such as Ethereum, Dogecoin, Ripple and so on! This gives maximum profit with reasonable protection against huge losses.
- Lower transaction costs:
We all have been there! A hefty bank transaction charge deters us from using online payment methods and pushes us to use cash instead. However, cryptocurrency has much lower transactions fees encouraging far more transactions.
- More security:
Cryptocurrencies have the reputation of being robust in security. Although hacks and DDoS (disturbed denial-of-service) attacks are increasing, it is much lower than what a bank faces every day. This encourages individuals to use cryptocurrencies since they are safer and more reliable. Moreover, a few exchanges are willing to reimburse the affected customers if the said exchanges are hacked or compromised.
- Easily available information:
Let’s all face it; we have been discouraged to invest in crypto because there is no or less information available or the typical “log haasnge tumpe” when you make losses since you could not gather enough information. However, this was years ago when crypto was not popular and the internet was not widespread. With both of them being widespread, information related to various cryptocurrencies is widely available and they are available for free! One such website, Reddit has mammoth information related to crypto!
- Super easy to buy crypto:
We all have been there, how do we buy crypto? It has to be quite difficult! The answer is a resounding NO! Buying cryptocurrency has never been easier than it has been in the last two to three years! Compared to 10 years ago, you can buy cryptocurrencies with a click of a button. Exchanges have made it super easy to buy and sell cryptocurrencies. One just has to set up an account with an exchange and verify their KYC (know your customer). After the process is complete, one just has to deposit money and buy crypto!
While this is the rosy picture of crypto, there are thorns attached with it! One has to always choose the coins that have a solid project. Moreover, one should always keep emotions in check and should DYOR (do your own research) before investing in any coin(s). This will help you in the long run and give you massive profits.
Disclaimer:
*Please understand this is not a piece of investment advice and this article has been written for general purposes. News Hamster and any of its associates are not responsible for any loss you bear. The cryptocurrency names which are given in this article are not an endorsement but just an example. Please do your own thorough research and analysis before investing in any coin.*
References: The Times of India, Analytics Insight and Vocal Media.
