In this day and age, cryptocurrency is not a new concept. By now, chances are that every single person in the world had the opportunity to at least hear this name being mentioned. That being said, however, not everyone is still entirely familiar with the concept of cryptocurrency.
To some people, this currency is still shrouded in the veil of mystery. What is it? How does it work? Do I and why do I need it?
These are just some of the most commonly asked questions when cryptocurrency is concerned.
Now, it’s important to recognize why learning more about cryptos is important. That’s why we’ve decided to share some insight into what cryptos actually are and why everyone should own at least some cryptocurrencies in 2021.
What is cryptocurrency?
Simply put, cryptocurrency is a decentralized, digital currency that operates on blockchain-based platforms. To be a bit more precise, what this means is that cryptocurrency is not governed by any financial institution. Instead, it’s regulated by peer-to-peer community that’s based on a computer network made up of so-called “nodes”. What these nodes actually are, are user’s machines
As such, cryptocurrency is considered to be the currency of tomorrow. Since it relies on the blockchain technology, this type of currency is extremely stabile and safe to use, but more on that later.
How does it work?
So, in order to understand all the perks of using cryptocurrency, we must first take a look at how the entire system actually works. Blockchain is a decentralized and distributed public ledger. As such, it’s run via cryptography – hence the name. So, every cryptocurrency that gets used needs to come form somewhere.
As mentioned earlier, we have crypto nodes. The process of “mining” those nodes is actually where information enters a crypto’s blockchain. Later on, that information is mathematically checked and any changes made to the ledger are confirmed and verified by the blockchain network.
It’s also worth mentioning that, even though the entire process enables users to remain completely anonymous, transactions can still be traced with the use of cryptography.
Why do I need it?
Knowing everything you do now, it becomes quite clear why cryptocurrencies are so popular. However, you may still be wondering why you need to get your hands on some. We’ll try to explain the reasons through different examples below.
To some, this argument may sound quite weak. However, simply saying that you need to secure some cryptocurrencies for yourself just because everyone else is doing so isn’t exactly where we’re aiming at with this point. Instead, think of it this way;
More and more companies and institutions are not only accepting but also gathering cryptocurrency for themselves. Even the entertainment industry, which is currently one of the biggest industries has recognized this trend. That why more and more online casinos offer bitcoin gambling as an option.
So, in short, cryptocurrency is already in focus of some of the greatest industries in the world. That’s why it would be borderline reckless to miss out on an opportunity to at least have a bite of this cake.
Ease of use
Another easy-to-understand appeal of cryptocurrency is just how easy it is to use. Since this currency isn’t governed or regulated by any financial institution, it means that it’s available for use wherever and whenever.
So, by using cryptocurrency, you’ll no longer have to pay attention to things, such as work hours, holidays and similar factors. Instead, you can simply finish your transactions right then and there. Moreover, since everything relies on secure and fast blockchain, there really is no need for third-party involvement. Instead, the parties that are doing business can safely and easily complete transactions without any down time.
As frequently mentioned earlier, using cryptocurrencies is considered to be extremely safe. Since online safety is the priority these days, this only further supports the argument in favor of cryptocurrencies. Since blockchain is consistent of numerous nodes, as mentioned above, being able to infiltrate it is almost impossible.
Anyone who would attempt to do so would need to hack into every single node successfully in order to gain access to the information of that particular blockchain. Needless to say, even though modern technology is highly advanced, there really are no current solutions that would make this possible.
A secure hedge
Finally, since cryptocurrencies are considered to be the currency of tomorrow, it’s understandable why they’ve become one of the most desirable hedge options. Up until recently, gold and bonds were considered to be some of the safest hedge options, particularly in times of uncertainty. However, as we had an opportunity to see recently, gold experienced a significant decrease in value. What this goes to show is that no asset is entirely secure and can be considered a “safe bet” in the long run.
But by simply taking everything into account and by observing the market closely, we can see that cryptocurrency quickly reached this status. Yes, the cryptocurrency market is quite volatile but it doesn’t really stand out when compared to other markets.
With all of this said, we hope that it became at least a bit clearer why you should try and secure some cryptocurrencies for yourself in 2021. With modern technology constantly evolving and increasingly becoming an integral part of our day-to-day lives, ignoring or missing out on an opportunity to invest in your future is simply not prudent.