1. Crypto : Blockchain Technologies Advancements
Blockchain technology is the foundation of cryptocurrencies. Allow me to clarify what blockchain technology is. Blockchain is a distributed, decentralized ledger technology that records transactions across several computers while guaranteeing security and openness. The first cryptocurrency to be developed using blockchain technology is Bitcoin. We’re still in the early stages of this; when the internet was initially developed in the late 1960s, people had doubts. People didn’t embrace the internet for nearly thirty years. It is essentially going through the same stage. But eventually, everyone will come to terms with this. Therefore, investing in cryptocurrency early on could make you wealthy!
2. Limited Supply
The maximum total supply of bitcoin is 21 million. As of 18th december 2023 , there are only 1.4 million bitcoins left to be mined. This makes it inherently deflationary, potentially increasing its value over time as demand grows. Price of 1 bitcoin today is roughly around $40,000 usd right now. Imagine when there will be no bitcoin left to be mined, it might reach upto $200k as some crypto pundits says. Not only just bitcoin, there are other currencies too in which you can invest like , etherium, shibainu, dogecoin, ripple etc.
3. Growing recognition
Hedge funds, family offices, and even some conventional financial institutions are among the institutional investors that have demonstrated a growing interest in these currencies. They view them as a possible asset class, which has increased the crypto industry’s credibility and acceptability .A number of well-known businesses, including PayPal, Square, and Tesla, have begun to accept these payments for goods and services. The acceptance rate has gone up as a result of this integration into regular trade. With initiatives like Libra (now Diem), some of the biggest tech companies, like Facebook (now Meta), have revealed plans to get into the this market. Large IT corporations’ involvement in this degree has increased awareness of the industry.
4. Possibility of Large Profits
In the past, cryptocurrencies have demonstrated the ability to increase in value significantly in a short amount of time. Because this offers the potential for large returns on investment, some investors are drawn to it. Recently around autumn of 2023 one investor just invested $100 in pepe coin, after 1 week pepe coin sky rocketed and his $100 of investment became $4 million. Caution : I am not influencing anybody this is for the crypto believers.
Especially Bitcoin, are seen by some investors as an inflation hedge. These may hold onto or even appreciate in value during periods of economic instability or currency devaluation.
5. Decentralized
Because cryptocurrencies are decentralized, no single entity—such as a government or central bank—has power over them. People who value financial autonomy will find this appealing. Most of these currencies operate on a decentralized ledger, which is usually implemented as a blockchain. Multiple copies of the same data are kept on a dispersed network of computers in a decentralized ledger. All transactions are recorded in this ledger, which is available to all network users. It is extremely resistant to fraud and tampering because of its transparency and distribution.
6. Accessible across the globe
Most of these are always available for trading (24*7) , unlike banks which care closed on holidays, and can be access from any location with an internet connection. Those who are interested in investing in international markets find this accessibility particularly appealing. It provides a borderless payment option for companies that deal internationally, easing cross-border transactions and cutting costs related to foreign banking and currency conversion. Despite the fact that these are accessible everywhere, it’s crucial to remember that different nations have different regulations for such currencies.
7. User control
Users in decentralized systems have more authority over their resources and information. Their digital wallets’ private keys are in their possession, enabling them to maintain their assets and conduct transactions independently of other parties. compared to conventional banks, which retain and manage their clients’ money, digital wallets are usually managed by the user. Users are not exposed to the risk of bank failure or possible money loss as a result of bank policies.
8.Opportunities for Speculative Trading
The volatility of the this market can offer trading possibilities to individuals who possess the necessary ability and risk tolerance for short-term speculation. Although investing in digital currencies may seem enticing for these reasons, it’s important to proceed with care and do extensive study. This market is infamous for its risk and volatility, and investments can rise or fall quickly. Prior to making any investment decisions, think about speaking with a financial counselor and only investing money that you can afford to lose.
9. Decentralized Finance (DeFi)
Lending, borrowing, trading, yield farming, and other financial services and apps based on blockchain technology are all referred to as DeFi.
Consumers can access financial services without a bank account, get loans without the use of traditional middlemen, and earn interest on their cryptocurrency holdings. Well-known DeFi networks are Uniswap, Aave, and Compound.
10. NFTs and blockchain based games
NFTs ( Non Fungible Tokens )
NFTs are distinct digital assets that stand in for the ownership of a particular good, work of art, or collectible. They are frequently utilized for virtual real estate, music, digital art, and other things. For both digital and physical assets, NFTs offer ownership verification, provenance, and scarcity. There has been a lot of NFT activity on platforms like Ethereum and Binance Smart Chain.
Blockchain based games
Video games are incorporating blockchain technology to allow for real ownership of in-game items and characters. These assets are tradable in and out of the game by players. Due to their blockchain-based ecosystems, games like Axie Infinity and CryptoKitties have become more and more popular.
There are a number of reasons why investing in cryptocurrencies can be attractive. First off, given the enormous growth the cryptocurrency sector has demonstrated over the years, they provide the possibility for large returns on investment. Second, people looking for financial independence and privacy find cryptocurrencies appealing because they offer a degree of decentralization and security that traditional financial institutions frequently do not. Furthermore, the adoption of the blockchain technology that powers cryptocurrencies has the potential to completely transform a number of industries and open up new avenues for investment and innovation. It’s crucial to remember that investing in cryptocurrencies carries a number of dangers, including as volatility and unpredictability in the regulatory environment. As such, it is best to proceed cautiously and with a well-thought-out plan.
Editor : Naman Sharma
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