We all are familiar with the term ‘Trading’ that means to buy and sell assets such as goods and services. In exchange for goods and services, the buyer has to pay a price to the seller. However, in the case of financial markets, these assets are known as financial instruments and include anything like stocks, bonds, options, futures, cryptocurrency, and so on.
Introduction to Cryptocurrency
Cryptocurrency is a type of payment that you can do online for goods and services. There are many companies that issue their own currencies, known as tokens, that are often traded for the goods or services that the company offers. In simple words, you will need to exchange real currency for the cryptocurrency in order to get their goods and services.
Blockchain is the technology that is used to manage Cryptocurrencies; this technology involves computers that manage and record transactions.
According to CoinMarketCap.com, more than 6,700 different cryptocurrencies are traded publicly. There is a constant growth in cryptocurrencies that means raising money through initial coin offerings, or ICOs.
According to CoinMarketCap, on Feb. 18, 2021, the total value of all cryptocurrencies was estimated as more than $1.6 trillion, and the total value of all bitcoins was estimated at about $969.6billion.
Is Cryptocurrency a Good Investment?
Cryptocurrency may offer you more value but still, they are not real investments and mere speculations as observed by many investors. Cryptocurrencies generate no cash unlike real currencies, so in order to get more profit, you will need someone to pay more for the currency than you did.
Cryptocurrencies such as Bitcoin may not be safe as per some notable personalities in the investment community.
If you think cryptocurrencies such as Bitcoin as the currency of the future, remember that a currency needs stability so that a fair price can be determined for goods.
Also, this price unpredictability creates a problem because if bitcoins might be worth a lot more in the future, fewer people will spend or circulate them today. This will make cryptocurrency less practicable as a currency.
Some cryptocurrencies, including Bitcoin, can be purchased with U.S. dollars, while others need you to pay with bitcoins or another cryptocurrency. You will need a wallet i.e. an online app that can store your currency in order to invest in cryptocurrencies. You have to create an account on an exchange and then using your real money you can buy cryptocurrencies.
Legality of Cryptocurrency
Well, everyone knows that cryptocurrency is legal in the US, however, it is not considered a legal tender in China and has been banned. So, there is nothing that can be said with confidence in the case of the legality of cryptocurrency; it varies from country to country.
Whether it is legal or not, you need to be always aware of fraudsters that are ready to take advantage by fooling investors. You may get spammed for fake cryptocurrency, so make sure to get enough information before you finally step forward to invest in it. For more information, you can visit here.