Before 2009, the concept of cryptocurrency was unknown and no one would have thought that such an innovation would make different governments and banks be concerned. However, since the invention of Bitcoin in 2009 and several other cryptocurrencies, the world has awoken to the possibilities of these digital assets and I am not different so here are 10 reasons why I believe you must own cryptocurrency!
Reason #1: You’ll begin to learn how its technology works
Cryptocurrency is a digital currency secured by cryptography and many of them are decentralized using blockchain technology. For many of you, these terms such as cryptography, blockchain, and decentralization may be new however, these are just a few of the terms as there are many more to learn. Cryptocurrency is an innovation that will eventually change the way we use money and you cannot afford to be left out.
Therefore, the best way to understand cryptocurrency and its technology is by owning cryptocurrency. Just imagine how difficult it would be if someone was teaching you how to operate a computer when you have never seen one before. That is the same way it feels when people are trying to understand how cryptocurrency and its technology works without owning any.
However, when you invest in cryptocurrency, you’ll begin to find out how it works and learn more. You’ll learn about the technology behind it and how to use it to your advantage. With time, you’ll understand more and maybe become an expert just by owning cryptocurrency.
Reason #2: It’s free from government regulations (for now)
Perhaps, one of the greatest advantages of cryptocurrency is that it is free (for the time being) from government regulations. Since most governments control money through a central authority such as central banks, they have greater control of the government-issued currency also known as fiat money. The government controls how much money is printed and how much is available in circulation. Sometimes, this can lead to inflation because of too much money in circulation as seen in the case of Zimbabwe.
However, cryptocurrencies are created through a process known as “mining.” That is a group of computers perform complex mathematical calculations to produce new units of a cryptocurrency. A group of people known as “miners” process these transactions on a secured network using specialized hardware. No individual or central authority has the power to control or manipulate this process as every transaction is recorded on what is known as blocks. Hence, a group of blocks is linked together in what is known as a blockchain.
Moving on, cryptocurrencies are valuable because they have the characteristics of money. Cryptocurrencies are durable, scarce, portable, divisible, and recognized as an asset by many people. These qualities make it accepted as a form of payment and its value is simply based on demand and supply.
Reason #3: Potential for lucrative returns
If you’ve been following the news lately then you’ll understand the reason why so many people are interested in cryptocurrencies. Because it is still in its early stage, investors who take advantage of it now are likely going to make a lot of profit from it. As more institutions are now accepting cryptocurrencies as a form of payment, the demand for them has increased as well as the price.
Again, there are several ways to make money from cryptocurrencies. For instance, you can simply buy and hold a particular digital currency for the long term and make a profit from it. This is similar to investing in stocks or another physical asset whose value increases over time. A good example of this is buying Bitcoin in January 2020 when the value was just around $10,000. As at the time of this write up, the value of one Bitcoin is around $50,000 and it still has the potential to increase in value. So you see, it is good that you own cryptocurrency now that it’s still very young in its existence.
Another way people make money from cryptocurrency is by trading different currency pairs. This is similar to the foreign exchange where people trade different currency pairs. You can take advantage of fluctuating price of different cryptocurrencies and make a huge profit. Other ways that people make money from cryptocurrency include mining, investing in cryptocurrency-related assets, referrals, and bonuses.
Reason #4: It’s highly liquid
Another reason why you must own cryptocurrency is that it’s highly liquid. This is simply the measure of how easily you can convert an asset into cash or another asset. When an asset has low liquidity, the price becomes easy to manipulate thereby making it unreliable. However, this is not the case with most cryptocurrencies as you can buy them almost instantly on major exchanges without it affecting the price.
Let’s compare cryptocurrency with other assets such as real estate or cars. If you needed money urgently, you may not be able to rely on your real estate asset to bring you cash immediately because it’s not very easy to find an instant buyer. You have to go through a rigorous process of listing the property, showing it and then finally finding a buyer. Not to mention, sometimes it’s difficult to find buyers who are willing to buy at your price and you’ll be forced to reduce the price to make a sale. However, this is not the case with cryptocurrency. You can easily convert fiat money to cryptocurrency instantly without waiting for days to get a buyer.
Therefore, this is a good reason why you should own cryptocurrency. You can create an account with any exchange right now and own your first crypto asset in less than 5 minutes!
Reason #5: Inexpensive online processing
Another reason why you must own cryptocurrency is due to it’s inexpensive online processing. Since cryptocurrencies are not issued by banks, users can send money directly to anyone, anywhere in the world. For instance, you can send money to someone in another country without worrying about the charges from the bank and currency conversion rates. Also, because they do not need banks to operate, you can eliminate the numerous fees associated with regular bank accounts. That is, you don’t have to worry about maintenance fees, minimum balance fees, overdraft charges, and deposit fees among many others. Cryptocurrency focuses on peer-to-peer transactions. That is, I can send money to anyone without the bank being an intermediary. This also means that payments are processed instantly and there is no need to pay transaction fees, especially for most international payments.
Reason #6: Transactions are secure
Cryptocurrencies are built on blockchain technology, and one of the benefits of this is security. This means that cryptocurrency transactions are more secured than existing banks and financial institutions. Each transaction is recorded in a public distributed ledger, which makes it difficult to tamper with. No single individual has access to edit transaction records and the blockchain. When an individual sends a cryptocurrency to another user, it goes through a series of confirmations before it is recorded on the blockchain.
Although this is similar to what happens in the bank, cryptocurrency transactions are more transparent. Banks record all transaction details carried out on their massive database but it is not available to the public. Also, a particular bank has all the access to the data and they can manipulate it. However, cryptocurrencies are decentralized and it is hard for anyone to manipulate them.
Reason #7: It’s protected from inflation
Another reason why you must own cryptocurrency is that it is protected from inflation. Inflation is the increase in the price of goods and services over time. For example, you might be able to purchase more items with $1 years ago than you would today. Before now, gold was the only asset that was considered a hedge against inflation because of its limited supply and perceived value. That means that when other currencies are being devalued, the value of gold remains the same.
However, cryptocurrency has also proven to be able to compete with gold as a hedge against inflation. For instance, the maximum number of Bitcoin that will ever be mined is 21 million units. This makes it a scarce commodity and the value would be less subjected to inflation just like gold. During the recent pandemic, governments all over the world were printing more money and as a result, the price of goods and services started increasing. However, the value of cryptocurrencies started surging because they are protected against inflation. Therefore, if you’re looking for an excellent way to protect your asset from inflation, you should consider investing in cryptocurrency today.
Reason #8: Independent to changes in other markets
Cryptocurrencies act independently to changes in other markets, which make them an option for diversification. Generally, there is a correlation between most markets, and a change in one could affect the other. For instance, if the stock market is performing well, there might be a corresponding effect on the real estate market. This also means that if the market is not performing well, it might also affect other markets.
However, since the cryptocurrency market is still new and different from these other markets, a change in one might not affect it. Instead, when there is a downturn in other markets, investors would look for a safe place to move their money into and that is where cryptocurrencies come in. Since their value is protected from inflation, a change in other markets like the stock market and real estate might not affect cryptocurrencies.
Reason #9: Many big businesses are now accepting it
The only reason why any currency has value is that people are willing to accept it as a form of payment. In the early days of cryptocurrencies, many people were skeptical because they did not understand them. However, more people are beginning to understand the technology behind them and are willing to accept them as a form of payment. As a result, the value of cryptocurrencies keeps increasing, as more people are willing to take it as a form of payment.
Today, not only are individuals willing to accept cryptocurrencies as a means of payment but big businesses are also accepting them. Some of the common names that have started accepting cryptocurrencies include Wikipedia, Microsoft, AT&T, Twitch, the Miami Dolphins, the Dallas Mavericks, among many others.
Although most countries are still looking for ways to regulate cryptocurrencies, some of them are now considering using blockchain technology to improve their banking sector. In fact, some countries have issued their cryptocurrency and they include Ecuador, China, Senegal, Tunisia, and many others that are planning to launch theirs soon. Again, some banks have also shown support for cryptocurrencies in recent years. For instance, USAA bank allows its customers to check their Coinbase account balance directly from the bank app and website. Now may just be the best time for you to own cryptocurrency.
Reason #10: Fiat currency is deflating
Lastly, you must own cryptocurrency because fiat currency is deflating. Fiat currencies have an unlimited supply and a government can decide to print more money anytime and as a result, it keeps losing its value. However, cryptocurrency gives you a hedge against inflation because its value is not dependent on fiat currency. No central authority can control or influence its price and that is why it is safe.
The sad reality is that saving money in banks these days is synonymous to losing money because of deflation. The prices of goods and services are on the rise but the interest rates offered by most banks is lower than the rate of inflation. During the recent global pandemic, governments pumped more money into circulation in form of stimulus packages. This resulted in an increased demand for goods and services and according to the law of demand and supply, the prices of goods soared.
Alright so now you’ve seen several reasons why you must own cryptocurrency. It’s very easy to get started and the benefits are numerous!