In recent years, cryptocurrencies have become one of the most talked about technological innovations. Forget AI and electric cars, everyone wants to know what’s the latest news on Bitcoin price and how to buy it. Due to all this hype, the crypto market has exploded, with millions of users all over the world.
Since Bitcoin first launched in 2009, many new and exciting crypto assets have been created. While they have some differences, they all share the fact that they’re created on a technology known as blockchain. But what exactly are these digital assets, and what advantages does cryptocurrency offer over traditional investing?
What is Cryptocurrency?
Cryptocurrencies are digital assets created on the blockchain, which is a way of storing data. When financial transactions occur, they’re recorded on blocks on the chain, which are verified by all computers using the network. The nature of this technology means that financial transactions can be recorded and verified without needing a bank, financial institution or third party.
The fact that cryptocurrency can operate without needing a bank means it can be completely decentralised, with ownership shared between those that use the network. Users have full control over their coins and can also avoid high fees and long transfer times.
Since Bitcoin was first launched, it’s inspired a huge wave of alternative coins, many of which provide different features and uses. In addition, the increased interest in these coins has caused prices to soar, making them an interesting prospect for investors.
Why People Invest in Cryptocurrency
There are lots of reasons why people invest in cryptocurrency, including:
Decentralisation
The decentralised nature of crypto makes it very appealing to a lot of investors. It means that when you purchase Bitcoin or other coins, only you have full control of them. They’re not held in a bank but are instead present on the blockchain. You can make use of your coins through a wallet, which holds your private keys. Provided you never reveal these keys, you’re the only person that can ever access your coins. This is useful if you live in a region that has an unstable government or if you’re worried about asset seizure.
Big Investment Returns
Bitcoin has become one of the best-performing assets of the past few decades, significantly increasing in value with each cycle. Other cryptocurrencies have performed similarly, with big gains occurring in a short space of time. Many investors have gotten rich off of crypto bull markets simply by purchasing coins and holding them before selling at the top. However, you should note that returns are not guaranteed, and the market has experienced many crashes and downturns too.
Accessibility
While stock trading apps have become more popular over the past few years, crypto is still one of the easiest ways to invest. You don’t need to sign up with a broker and fund your account. Instead, you simply join an exchange and purchase some crypto with your card. This makes it appealing to people who don’t necessarily trust traditional investing, and it’s a viable alternative to people who don’t mind a bit more risk. There are lots of crypto exchanges available, many of which can be accessed through an app.
Fast Speeds
Cryptocurrency was originally designed as a way of transferring money without borders rather than an investment. While the volatile prices make it less suited to transfers, stablecoins are a good solution. Crypto is still a very fast way of moving money, and the fees you pay are minimal compared to similar services for fiat currency. You can instantly send funds to anyone in the world, and you’ll pay a flat fee no matter how much you send.