Even a bird on the tree has heard of cryptocurrency. With Elon Musk using it as his payment method for his Tesla cars, the cryptocurrency field has skyrocketed! To be honest, it was already very popular before, but the hype Musk caused with his tweets made cryptocurrencies, such as Bitcoin, and even the meme currency Dogecoin popular, and therefore raised their value (even if it was only short-lived) You may think of cryptocurrency as the new best way to handle money, but is it really all that ideal? Here are some advantages and disadvantages to investing in cryptocurrencies:
Investing in cryptocurrencies early, while their price is at a relatively affordable level, allows you to obtain potential profit. Namely, many people who invested in Bitcoin when it was unknown, can now be considered millionaires. It is important to note that you need to understand the ways of cryptocurrencies, because some of them will flop while others will not, and you need to understand which one to invest in. Its value might increase if more people invest in certain crypto (as seen with Musk’s fairly recent tweets), but it isn’t a given.
Cryptocurrency was created with an idea that money should be decentralized, independent of banking systems that control the value of money. The reason cryptocurrencies are decentralized is because you don’t have an intermediary between you and the person you’re paying to. The payment goes directly to the person you’re sending it to, making usual banking fees obsolete. While transactions can be viewed, they are usually encrypted so they cannot be manipulated.
It is incredibly important to be eco-conscious in today’s day and age, and unfortunately, that’s where that coin doesn’t shine. In order to gain a cryptocurrency, you need to, as it’s been called, “mine” them. This problem with mining is that it uses incredible amounts of electrical energy, which as we all know, is powered by fossil fuels, which makes mining extremely eco-unfriendly.
However, there are some alternative cryptocurrencies that are more environmentally friendly, such as Bitgreen, Solarcoin, or Nano.
Cryptocurrencies are usually regarded as a “bubble” in order to better describe their unpredictability. You can’t be certain about crypto’s success or failure, which adds up to the trope of unpredictability. This is the reason why people usually recommend only invest in an amount that they are not afraid to lose. Another potential risk is this: unless you protect your information on the internet, your stored coins might be easy prey for hackers. Always make sure to shield your data and check the sites which use cryptocurrencies.
While there are some advantages and disadvantages to investing in cryptocurrencies, I must advise you that the choice is completely up to you.
Even if you don’t want to invest in any cryptocurrency yet, it is surely interesting to watch it all develop right in front of you. My take is that cryptocurrencies are on the right path and that with some control over certain parts, they may develop into something that hopefully everyone can use.