What Attracts People to do so?
Cryptocurrencies are still quite new. But if you’re lucky, you might be able to make some money because nobody really fully understands how much cryptocurrency assets ought to be worth. It’s just like a farmer discovering a new kind of rice. It’s not that bad; it tastes good, smells good, and the texture is really nice after you cook it. Although no one really knows exactly how rare or difficult it is to grow, will it be a very expensive kind of rice? Will it be abandoned? Or perhaps a majority of rice farmers will start farming the crop, and a majority of rice consumers will consume the rice? No one really knows until it is put through multiple tests.
People often wonder if investing in cryptocurrencies is a wise decision because of these and other concerns. The fact that it’s innovative is another important factor in why some people might want to invest in the market. Cryptocurrencies is still relatively new, as I’ve mentioned a few times already. But as time passes, it’s being adopted by more people every day. Some people might merely enjoy being in the know and want to get involved in this technological advancement as soon as they can and/or they have the FOMO (fear of missing out).
An example would be 5G towers nowadays, some says it kills animals and people, some says it doesn’t. No one really knows until someone actually proves it with enough proof.
Now let’s finally take a look at the 5 pros and cons shall we?
Anonymity
Furthermore the fact that cryptocurrencies combine anonymity and transparency is the very first advantage of investing in them. You can choose to completely hide your identity when investing in cryptocurrencies.
It is getting harder and harder to do these days as regulations become more stringent. Crypto enthusiasts nevertheless continue to discover methods for obtaining at least some anonymity. How far you’re willing to go will determine everything.
Transparency
Cryptocurrencies are predicated on blockchain technology, which is by nature transparent, so they fit into that equation. Unless we’re discussing a specialized private blockchain. Everyone will be able to check the code underlying public ledgers and look for various possible bugs and problems. On such blockchains, all cryptocurrency transactions are public as well. They won’t be identified by your name, though.
The only information that will be displayed to the observer will be your wallet address, demonstrating once more how anonymous the experience is overall. The opportunity to generate significant returns on your investment will follow. Investing in cryptocurrencies has a number of advantages, although this one may seem a bit obvious.
Chances for Massive Profits
Simply put, no other well-known financial sector does not offer you the opportunity to generate returns of this magnitude. The fact that numerous people have been able to become millionaires overnight thanks to the cryptocurrency industry accounts for a significant portion of its appeal. It’s similar to playing the lottery, only your research-based preparation will determine whether you have better or worse odds.
There are significant drawbacks associated with this factor as well, because, of course, nothing is ever as simple as it seems. Keep in mind that many people would respond to the question of whether you should invest in cryptocurrencies by providing you with this very reason to do so; we’ll get to that later.
The Numerous Ways to Invest
Moving on, another significant issue with cryptocurrency investing is that, as I mentioned earlier in the article, there are what seems like an infinite number of ways to do so. And no, I’m not referring to using various exchange websites to purchase our cryptocurrency. Instead, I’m referring to the wide range of options for houses that are displayed. If you want to go the conventional route, go ahead and sign up for an exchange and buy cryptocurrency this way.
In contrast, there is also the DeFi, or decentralized finance, space to investigate with all of the various services it provides. Then there are NFCs, which are in a class by themselves. These few categories are further divided into a vast number of smaller subcategories, such as crypto borrowing and lending, sophisticated trading tools, earning royalties with NFPs, various investment strategies, Dows, and so on and so forth.
Influences from Cultures
Another huge benefit of investing in cryptocurrencies is the perception of this financial sector as being much more open and friendly than traditional finance, at least for the next generation.
That’s because cryptocurrency is frequently mentioned in different pop culture contexts, particularly when it comes to memes. Consider Elon Musk’s support for Dogecoin, the hunt for tokens and coins with animal themes, the Wall Street bets controversy, subreddit, and so on. When you consider that and the fact that you can begin investing in cryptocurrencies with as little as a few dollars, it is clear why so many members of the younger generation are asking themselves, “Should I buy cryptocurrency?”
Despite all of that, this article wouldn’t be complete without discussing the drawbacks of investing in the sector as well. Market volatility is at the very top of this list of drawbacks.
It’s like the law of supply and demand. Higher supply and/or lower demand means that the product has a low price, whilst lower supply and/or higher demand means that the product has a high price.
Conclusion
Although no one is entirely sure how much this technology is worth because it is relatively new and, to be honest, is still not very well regulated. And the speculative nature of the situation can really drain your bank account. Let’s say you decide to purchase Bitcoin when its value is $60,000, only to discover the following week that it has fallen all the way to $30,000 in value. That’s a bad feeling, especially if your only goal was to turn a quick profit and you weren’t in it for the long haul. The fact that this industry is still not properly regulated should be another BigCon you take into account before investing in cryptocurrencies.
But if you ask me, it’s actually quite a good innovation, you know having digital money,and digital wallets no more physical cash and such. But, we still can’t deny that it’s still young and still needs improvement such as security, ease of use, and so on. To sum this all up, cryptocurrency could be a good investment or a bad one, depending on what currency and how you invest.
