Why You Should Invest in Cryptocurrencies
A Cryptocurrency, as the name suggests, is a currency that combines different units of currency to make up a particular type of financial asset. In the modern world, there are several different types of cryptocurrences, with the most popular being Monero (XMR). Another popular and commonly used type of Cryptocurrency is Dash (DASH). Both of these assets have many similarities and also have some differences as well. However, despite the many similarities and differences, they have still become increasingly popular due to the many benefits they provide.
First, let’s understand what Cryptocurrency is. A Cryptocurrency, or commonly called a “crypto”, is an asset that combines different units of currency to create a new financial asset. This new asset is known as “Cryptocash”. A typical characteristic of all good Cryptocurrences is that they are stored on a “blockchain”, which is a public ledger that records the transfer and conversion of money from one Cryptocurrency to another.
The main characteristic of a Cryptocurrency is its supply. Like gold, the more there is of it, the higher the value. Unlike gold, however, there is no physical storage that allows us to keep track of how much is being spent on Cryptocash. Because of this, there are two different methods by which Cryptocash can be obtained, which we will now discuss. The first method is called Proof of Stake, which essentially requires a holder of the asset to “stake” his funds in order to make new blocks of Cryptocash.
One of the characteristics that make up the characteristics of a good Cryptocurrency is the process by which they are created. There are four different Cryptocurrencies, namely Dash, Vertcoin, Prypto Currency, and Litecoin. Among these, Vertcoin is the oldest of the bunch and the earliest of the four to use the Proof of Stake method. This method was employed in Litecoin and has since been implemented in all other Cryptocurries but not all of them.
The next characteristic is how the value of each type of Cryptocurrency is derived. Unlike traditional assets, like stocks or bonds, the value of Cryptocash is not tied directly to any central body. Instead, each type of Cryptocurrency has its own independent system of valuation that is determined by the amount of actual physical communication that is transferred. This includes the use of a debit card, which acts as a virtual keypad for all of the transactions that take place when you use a Cryptocurrency. Simply put, when you purchase LTC (Litecoin), you are actually using your own LTC wallet as sort of a virtual ATM.
One more attribute that makes up the characteristics of a good Cryptocurrency is how secure it is. A major problem with using a traditional form of investment is that the value of currency can be easily manipulated by forces outside of the control of the actual issuers of that currency. For instance, the government of Venezuela recently had to change the values of their national currencies because of the huge inflation rate that took place within their country. Many citizens of Venezuela actually bought dollars to back then just to have the same value in their home country when the value of their own currency crashed.
Since the issuance of Cryptocurrencies are entirely controlled by the users themselves, then it is completely immune from manipulation. While this may not seem like much of an issue at first, when you consider the tremendous growth that the peer-to-peer electronic cash system known as the Web has seen over the last few years, you will see just how important having a stable, honest, and trustworthy currency is. In fact, the U.S. government itself has looked into using a type of Cryptocurrency as a back-up plan in case things turn out to severely fail in our economy. This would allow us to use US dollars (and hopefully get a decent exchange rate for them) in an effort to keep our economy viable during these trying times.
Another major benefit to using Cryptocurrencies is that you have complete freedom over the supply of money. Unlike classical forms of taxation, there is no central bank that can print more money to pay everyone’s bills. You can only spend what you have, and this includes both your labor and your savings. Therefore, it is possible for the entire monetary system of any nation to be based upon the efforts of its citizens. This freedom from governmental influence is one of the major appeals to using Cryptocurrencies. If you want to invest in something that is based entirely on your individual decisions instead of those of some bureaucratic entity, then Cryptocurrencies are definitely the way to go.