What Is Cryptocurrency?

February 02, 2019

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Cryptocurrency is an encrypted, decentralized digital asset designed to work as a medium of exchange. It is not backed by any government or central bank. Simply put, it’s money created by the people, for the people and controlled by the people. Whether you are a complete beginner into the crypto ecosystem or slightly experienced, you will find this article useful. So let’s dive in and explore.

So, Is Cryptocurrency Safe?

First of all, it is an encrypted digital currency that only you have access to once it’s in your wallet. Second, it’s hosted on a decentralized, cryptographically fortified network where hacking is next to impossible. Also, all transactions are trustless, so no intermediaries are required.

So to answer your question, yes cryptocurrency is safe. Just do your research before investing in any of the available coins.

Cryptocurrency Adoption

Statistics show that by the end of 2017, there were 18 million users actively engaged in the crypto world. By 2018 the valuation of users had gone up to 35 million, representing a substantial rise of 94% more users than the previous year.

The study also revealed an increase in the number of accounts at cryptocurrency exchanges. In 2017 there were close to 80 million user accounts. In 2018 the number increased to almost 150 million accounts. The number of users verifying their identity also increased. In 2017 there were 20 million verified user accounts. In 2018 the number of verified user accounts was up to 40 million.

The number of cryptocurrency users is expected to increase even more as more and new cryptocurrency products and services are developed and introduced in the crypto ecosystem.

Pros and Cons of Cryptocurrency

Pros

  • Transparency

Despite anonymity features, crypto transactions are recorded and monitored. Each transaction is available for verification by everyone on a blockchain network, and therefore hard to fake. This greatly reduces fraud issues which conventional banks have to deal with.

  • Personal control

Crypto is a decentralized currency. Decentralized means that there is no central authority that regulates your money as well as its value. Everyone controls their cash.

  • Accessible to everyone

Any person with access to the internet can own a cryptocurrency. There are no rules about who can or can’t access cryptocurrency. This provides financial options for people who live in countries that have limited financial services.

  • Fast and low transaction costs

Transactions are automatically executed and take a couple of seconds to complete. Also, when compared to other electronic payment systems, cryptocurrencies generally tend to have low transaction costs.

Perhaps these benefits are a clear indication of why the crypto sphere continues to experience massive growth. Now let’s have a look at the cons.

Cons

These are simply risks associated with the use cryptocurrencies.

  • It can be unstable

Cryptocurrencies are known to have high liquidity. Prices change frequently and sometimes by crazy margins. That said, you can make huge profits when the price of a particular cryptocurrency skyrockets, or lose just as much if the prices crash.

  • Once you lose it, it’s gone for good

If someone steals your coins or if you lose your coins through a wrong transaction, there is no way to recover them.

  • Criminals like it

Its anonymity factor makes it a haven for criminals to transact without being identified. For instance, there have been lots of concerns that Bitcoin may be used by criminals to execute illegal activities, such as terrorist funding and money laundering.

Cryptocurrency Use Cases

There are many ways you can practically use cryptocurrencies besides just as an investment channel. 

  • Low-cost money transfers: With cryptocurrencies, you can send and receive payments at low cost and high speed.

  • Travel the world: Travel agents like Destinia and CheapAir accept Bitcoin as a payment method for booking flights, car rentals and hotels.

  • Purchase products: For instance, De Louvois accepts the purchase of Lamborghini with Bitcoin.

Is Cryptocurrency Legal?

The legality of cryptocurrencies varies from country to country. Since it’s still undefined, definitions keep changing in many countries. There are countries like Australia, Bahamas, Belarus, Bulgaria, Canada, the US and UK that have embraced cryptocurrencies.

There are also countries like Egypt, Algeria, Nepal, Iraq, Bolivia, Morocco, and Pakistan that have completely banned the trading and usage of cryptocurrencies. So before jumping on the cryptocurrency bandwagon, check regulations in your country.

Final Word

Cryptocurrencies are believed to be here to stay. As more people adopt their usage and clear regulations are put in place, the future looks brighter for digital coins. So take your time to do your research.

Kepler Technologies Team

Kepler Technologies is founded with a bold objective: to create customer-centric trading, portfolio management, and business intelligence solutions that mainstream investments into DLT markets and digital assets and drive long-lasting adoption.

There are a few products already released: Lukrum (portfolio management service for blockchain assets) and EOS portfolio (portfolio tracker for EOS tokens holders). Find out more details below.

Emailinfo (at) kepler.finance

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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