Cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency.
Cryptocurrency can be expressed as a decentralised digital asset based on blockchain technology. They are denominated in terms of tokens . The first Cryptocurrency was Bitcoin. It was lunched in 2009 by Satoshi Nakamoto . In few years , many cryptocurrencies evolved such as Litecoin , Ethereum etc.
While investing cryptocurrency, you should take into consideration certain factors which might affect your portfolio .
1 Ease in Transactions
One of the advantages of cryptocurrency transactions is that they are one-to-one affairs, taking place on a peer-to-peer networking structure . This leads to greater clarity in establishing audit trails, less confusion over who should pay what to whom and greater accountability .
2 Confidential Transactions
Each transaction you make is a unique exchange between two parties . You can transmit exactly what you wish to send to the recipient . Privacy of your financial history and protects you from the threat of account .
3 Minimal Transaction Fees
Transaction fees can take a significant bite out of your assets . Since the data miners receive their compensation from the cryptocurrency network involved, transaction fees usually don’t apply. There may be some external fees involved if you engage the services of a third-party management service to maintain your cryptocurrency wallet , they are still likely to be much less than the transaction charges incurred by traditional financial systems.
4 Fluctuation in Prices
The cryptocurrency market is quite volatile, so it is unpredictable. It can be risky to invest in cryptocurrency without understanding its risk factors. Due to the volatile market, a group of people is still not sure about this digital currency. Price volatility associated with a lack of inherent value is a serious problem.
5 Can be used for fraudulent activity
People who want to remain anonymous and avoid regulation from banks or the government will use cryptocurrencies to make shady deals on the black market. Money laundering is also a problem in the crypto world.
6 Study the Crypto Market
Do your own research before investing in a project. Never invest on the advice of people you do not know . Cryptocurrency is unstable in terms of its trading trend. It’s wise to investigate the tokens sold and purchased every day to stay updated. It’ll be better to wait until the trading trend stabilized before signing into cryptocurrency. Look at the advisor’s seriousness and his explanations about cryptocurrency.
7 Track your outcomes
Once you make your purchases, don’t sit back and wait for a long time without checking out the progress. Ensure you track the results from time to time and see if there is any change since the last time you checked.
8 Diversify your investments
Before investing, remember the saying that you should not keep all your eggs in one place. It’s painful to lose your money, but it hurts ten times more when you lose all of your cash at once . To avoid losing everything at once, divide your finances into different cryptocurrencies.
9 Invest what you are ready to loose
Cryptocurrency is an unsure investment. Although you can predict your profits, you can’t tell when you’ll incur losses. The money you put in shouldn’t be what you’ll need in your necessities. Investing a large amount doesn’t guarantee more profits.
Do you want to know more about cryptocurrency ? Visit XPERT to interact with industry experts and learn from their experience .