The Basic Principles Of Cryptocurrency Hardware Wallet

5 Reasons Why Cryptocurrency Is Still Worth Investing In

Also known as cryptocurrency, are digital currencies which are created and used by digital ledger systems. They are peer to peer networks made by computers that are connected to Internet. The term "cryptocurrency" is often used to refer to coins, hashing algorithms, virtual money, digital assets, crypto-assets or other slang terms. They first became a cryptocurrency introduced in 2009, and since then numerous types of cryptocurrency have been invented. It can be appealing to those who are just starting out and want to make money quickly, but it's not always the best option for investors who plan to invest over the long haul. Even though prices have been increasing over the past year and are expected to continue to rise over the next few years but investing in cryptocurrencies is still considered to be risky for most people and shouldn't be taken lightly. Here are five reasons you should stay away from investing in cryptocurrencies now. Get more information about Best Time To Buy Cryptocurrency

High volatility

They are highly volatile investments which can be volatile according to a variety of variables. For instance, the cost of a currency can rise dramatically one day, and then drop by exactly the same amount the next day. Another factor affecting the price of cryptocurrency is its reputation. If more people are aware of an aforementioned cryptocurrency and start buying it, the price will increase. This is due to the fact that when more individuals invest in an asset, it will become more desirable. Also, if lots of people decide to sell their cryptocurrency once, its price will decrease. That's why it's important to do some research and make sure you've invested in several various cryptocurrencies prior to putting your money into them.

Lack of transparency

Investing in cryptocurrencies is very different from investing in traditional assets like stocks. When you purchase a share you understand exactly what it does and how it's manufactured. You may even visit the factory to see the way it's made! When you buy a cryptocurrency, however it's not clear what you know about the product. This could be a huge issue for investors , as it is a sign that they don't know whether they're buying a high-quality product. They don't know what the seller of the cryptocurrency is reliable, or if the company they're dealing. A lot of cryptocurrencies are transparent, which means they give details about the individuals who are behind the project, such as their names and the contact information of those involved. However, the majority of well-known cryptocurrencies aren't which makes it difficult for investors to access quality information about them. This is among the major reasons that cryptocurrencies aren't a good long term investment choice.

Very very little liquidity

Another big issue that comes with investing in cryptocurrency is that there's not enough liquidity. The result is that investors aren't being able to quickly sell their cryptocurrency in exchange to cash. If you're holding an asset for a prolonged time, the liquidity of your investment is important because you don't want to keep holding an asset you're unable to sell. The more liquidity you have the more easy it will be to dispose of your asset. An excellent example of a low-liquidity investment is a house. It's not very liquid because , even if it is your intention to move out of your home, it is difficult to find an agent in real estate who can sell the house to you without a long term contract. The same goes for a cryptocurrency. Even if you wish to withdraw from the investment, you won't be able to find a cryptocurrency broker who will offer to sell your investment without a contract. Low liquidity is one of the biggest issues holding cryptocurrencies back from becoming a popular method of payment.

There is no governing body, or oversight

It is not regulated, and there's no oversight or governing body. There is no assurance of any kind of return for your money. The currency is completely decentralized, which means there's an absence of a central government or body that ensures the safety that your money is. When a cryptocurrency trading platform gets damaged or shut down and you're left with the money you invested in the investment. There's no agency in the government to help you recover refunds on your investment. This is among the biggest disadvantages of investing in cryptocurrency.

There is no guarantee of return

Every asset you invest in has the potential to earn you a return. Stocks are also expected to earn anywhere between 10 to 200% over a prolonged amount of time. However, cryptocurrency on the other hand, don't have an assurance of a return. Although it's true certain cryptos have increased in value dramatically, this is not guaranteed for every investor. Some cryptocurrency have experienced significant price increases and then fallen back down yet. It's not a secret that cryptocurrencies will continue to grow and grow in value over the long run. Even though the prices of most cryptocurrency is moving upwards but it's important to understand that this increase is nothing more than a trend. It's not a guarantee that it will last for a long time.

Conclusion

Cryptocurrencies can be a high-risk investment because they are highly unpredictable and lack transparency. There's no regulatory body or oversight and no guarantee of return. All of this suggests that investing in cryptocurrencies is not a great decision for long-term planning. There are a few cryptocurrency with a long history some time and are worthwhile to invest in, but the majority of them are frauds. Be aware that investing in cryptos is a high-risk investment and not a wise long term choice.