What is Cryptocurrency and is it right for me?
With the rise of everything electronic, it was only a matter of time until money became completely virtual. Cryptocurrency is the encryption and trading of virtual money without the use of a central bank. The most popular and spoken about cryptocurrency is Bitcoin. There are many different forms of cryptocurrencies popping up every week. Be cautious before deciding to invest in this form of currency. There are some positives, but it also comes with some pitfalls.
- Decentralized: Inflation is when the currency value changes. The value of the dollar can decrease when the government prints more money from the mints. The Bitcoin is separate from any government and bank. No one can central agency can alter the currency value.
- Security: No one can steal your money. Once the money is yours, it’s yours. You can buy Bitcoin, or people can transfer Bitcoin to you as a form of payment.
- Privacy: Your money transactions are anonymous. When you pay someone, it is anonymous from the sender and the recipient. This is one reason why cryptocurrency has become very popular in the criminal world.
- Functionality: Forget about wallets. You don’t have to carry your money around. It exists in cyberspace protected with an encryption. It’s easy to transport and access because everything exists virtually.
- Not instant transfers: The encryption transfers must go through software and it passes several processes. The payment is transferred in placed in “blocks”, and you have to wait until there are enough to process the block. This means that there can be minutes, days, weeks, or longer until your money is transferred. You will get your payment, but there’s no telling when.
- Scams are rampant: Even though people can’t steal your physical money, there are scams out there who doupe you into transferring money to them. It’s very difficult to tell the difference between the scams and the legitimate ones. Do your research before transferring or using any new cryptocurrencies to make sure that you’re investing in good sources.
- Privacy: Yes, there is a layer of privacy, but it’s not 100% secret. They can’t see who did it and where it went, but people can see the size and other details of the transfer in the “blockchain”. Everything leaves somewhat of a trail. Everything done online lives forever.
- Not applicable in day to day transactions: If you’re looking to use your Bitcoin money out in the real world, you’re going to be waiting a while. It’s still not accepted as a legitimate form of currency in the modern market. You can pay folks in Bitcoin who value and have accounts, but not everyday retailers. Bitcoin Cash is trying to break into the economic market by allowing real world transactions. There are still hiccups with the speed of the transactions, but it’s a step in a revolutionary direction.
The number one thing you need to ask yourself is, “Why do I want to invest in cryptocurrency?” Are you simply curious? Are you looking to pay people anonymously? After you answer this and you want to move forward with it, then research every aspect to make sure it’s not a scam. Protect your money and be safe.