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Cryptocurrency is always a fun topic with friends, family, and officemates. Since the fruition of Bitcoin in 2009, new cryptos have popped up, like Dogecoin and Ethereum. And currently, there are 12,000 active cryptocurrencies.
Regardless of the trend, many future investors and consumers may be baffled by all the fuss. Should people invest in cryptocurrencies when their native money is adequate for most uses? Why would a person buy cryptocurrency? These are some questions you might have when planning to invest in crypto.
But it's not late to join the fun! As a matter of fact, using and investing in cryptocurrencies has many benefits.
Why You Should Invest in Crypto
It's normal to have reservations about investing your hard-earned money. To help you decide, here are the top seven advantages when investing in crypto:
1. Highly Accessible
The main reason why you should invest in cryptocurrency is that it’s highly accessible. Anyone can invest and use it because you only need an internet connection and a computer or smartphone. And that’s compared to the grueling process of creating an account at a conventional financial institution.
Setting up your Bitcoin wallet at websites like Bitcoineer is quick and easy. There is no ID checking, and there isn't a credit or background check. Plus, with cryptocurrency, people who lack bank accounts can access financial services directly.
2. Participate in a Decentralized Banking
Most people's love of cryptocurrency is deeply rooted in its decentralized, permissionless peer-to-peer banking nature. Such a decentralized world is made feasible, in particular, by smart contracts. Investors’ actions are carried out according to an open-source, encoded algorithm visible to all users on the blockchain.
3. Asset Protection Against Inflation
Over time, inflation reduces the value of fiat currencies (or government-issued currencies). But inflation has a different impact on cryptocurrencies. Why? Because the supply of cryptocurrency is limited and decentralized.
No bank or government can arbitrarily alter cryptocurrency. Additionally, cryptocurrencies can potentially earn more returns. But note that this does not imply that cryptocurrencies are immune to inflation. Theoretically, if more cryptocurrencies are mined, their value will decrease. Be that as it may, safeguards are in place to prevent crypto inflation.
4. Complete Control of Investments
As previously noted, governments and federal agencies do not influence cryptocurrencies and cannot alter their value. You can only purchase, send, and receive crypto with a unique and private key. But you might think that you’ll be more prone to hackers. Good thing there are certain special security precautions you can use to protect your investment.
5. Diversify Your Portfolio
If you have a higher-than-average appetite for risk, cryptocurrencies are a worthwhile addition to your portfolio. And normally, you should speak with a financial counselor at this stage. But for crypto, there is no such thing. All you need to know when investing in cryptocurrencies is to be cautious and make smart decisions.
Plus, you can provide more consistent returns by mixing assets with low price correlation. Investing in crypto will give you a safety net. For example, if your stock portfolio declines, your crypto asset can rise, and vice versa.
6. Full Transparency in Every Transaction
Transparency is highly regarded within the crypto world. You can check all your cryptocurrency transactions on the commonly used blockchain ledger. Tools are accessible for everyone to look up transaction details, including the timing, location, and amount of cryptocurrency sent from a wallet address. The number of cryptocurrencies held in a wallet is also open to everyone.
Transparency, to this extent, can lessen fraudulent transactions. A person can demonstrate that they sent money and that the recipient received it or that they have the necessary finances to complete a transaction.
7. Great Transaction Speed and Cost
There aren't many ways to transfer money or assets from one account to another more quickly than you can with cryptocurrency. The funds you send or receive will be usable after the network confirms the block containing your transaction.
And compared to other financial services, cryptocurrency transactions are comparatively inexpensive. But you should know that the blockchain's demand may increase transaction costs. Regardless, median transaction fees are still less than wire transfer expenses, even on the busiest blockchains.
Benefit from Innovation
Everyone has a reason for investing in crypto. And when compared to day traders who purchase and sell assets during stock market hours, investing in crypto may look simple. Crypto can even look inevitable for young social media-driven customers. That's why cryptocurrency only strengthens its position in the market as more companies adopt it and more people invest.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.