Many have heard about it, but no one knows what the elusive term covers. Worldwide web experts claim that cryptocurrency is the next best thing the planet has yet to embrace. However, we must be extremely cautious. Take everything with a pinch of salt that these self-appointed specialists claim. Doubt is more than valid once you consider investing your hard-earned & earnest money in something so unstable.
Since cryptocurrency is indirectly involved and can influence the real estate business, realtors at RealEstateAgent.com decided to uncover the truth! Join us in our quest to investigate this trendy topic and find out what lies beneath this worldwide phenomenon!
Untangling the definition
To put it in layman’s terms, cryptocurrency or digital currency is an online payment method Internet users can exchange for items, goods, and services. You exchange real money for cryptocurrency, for which, at its turn, you can purchase stuff online. Often referred to as Gold 2.0, cryptocurrencies are based on the so-called blockchain technology. Blockchain is not centralized to a large financial institution; it exists purely on the Internet. The technology embraces many PCs in charge of managing and recording payment transactions.
Bitcoin dropped as open-source software in 2009 and is considered the initial decentralized cryptocurrency. Since its release, several other cryptocurrencies have appeared on the digital market. Suffice to say, since 2018, many financial institutions, banks, accounting firms, or even governments have explored possibilities in digital currency or started a blockchain project. Nonetheless, these institutions are not involved in this technology.
Blockchain is based on a worldwide peer-system
Professionals needed a payment network with accounts, balances, and transactions managed digitally to monitor digital cash. One of the essential things the inventors of cryptocurrencies had to consider is double-spending. In other words, the same person must not spend the same amount of money twice.
They came up with a central server that keeps a record of all the balances. In a decentralized network, you don’t have this server. Consequently, every single computer connected to the network must be capable of checking the balances. If just one digital entity disagrees with a minor detail, such as spending even the least money, the whole system might break. Satoshi Nakamoto, the founding father of cryptocurrency, came up with the solution for this pickle.
Imagine a transaction as an online file digitally signed. The file is broadcasted to the network, specifically to every peer present in the network. Then come miners, who verify transactions and complete blocks, a certification, if you will, based on this. The blocks are added later to the blockchain. Miners receive payment in bitcoin for their work.
Digital currencies are fashionable and getting momentum as we speak due to the following reasons:
- Tech gurus stand by the principle that blockchain technology is secure, nearly impossible to circulate bad money. The blockchain network ‘employs’ a financially independent workforce to maintain the legitimacy of the transaction history. Cryptocurrencies are essentially the monetary incentives they offer to anyone willing to keep the network secure.
- When you make a transaction in your standard checking account, a big financial company logs your activity in a secret ledger; that is your banking transaction history. They monitor and save your online transactions. When your bank’s official webpage shuts down suddenly due to maintenance or unforeseen error, you can no longer do any online transaction. At cryptocurrencies, everything is decentralized as opposed to central bank digital currency.
- Transactions are faster because they are not going through the traditional routes before getting into your pocket.
- Business dealings are more cost-effective because you are not paying fees at all the intermediary stages, such as banks.
- You can become a miner and receive your earnings in cryptocurrency. The sole condition is to have a powerful computer.
- You don’t need a fortune to invest in cryptocurrency and can purchase small amounts in the beginning.
The market value of Bitcoin, the most substantial digital currency there is, is extremely fluctuant. Many believe that the actual value will jump even higher based on its steady rise. There are exceptions, though. For example, in December 2017, one Bitcoin’s value was approximately $20,000, which in 2018 dropped to $3,300. That’s an impressive plunge! Then again, around one year later, the price went up again to $13,750.
- They are an erratic and changeable investment.
- As a Bitcoin buyer, you have to have a high tolerance for unstable transactions. Many online users would want to profit from this instability and buy Bitcoins when the price is low, and when it goes up again, they will sell it. Which makes it a risky business to invest in.
- Unfortunately, hackers can interfere with digital currency exchanges.
Consider investing in other lucrative options!
Before you give in to purchasing cryptocurrency, let's have a look at 99% foolproof alternatives. And perhaps, they aren't as shaky as Mr. Bitcoin! There is an excess of money-making investment opportunities waiting for you to explore.
- Investing in real estate has always been the best marketable idea. Why? Because a house will not lose much of its original price, only in extreme cases. You can purchase a home in the US with cash, by applying for a mortgage or start investing in properties abroad! We are here to assist you in decisions on the real estate market!
- You don't want to be confined to a particular need that is experiencing difficulties. Consider investing in multi-family properties, office space, or a small apartment building for significant revenues. In short, diversify your investment portfolio with real estate!
- Upgrading your house to be smart or investing in smart home devices became trendy in the 21st century. A place becomes more valuable if it displays smart and green features. Invest intelligently to raise your private property’s value and save the planet at the same time!
- Specialists consider investing in gold the safest bet there is. On the other hand, investing in bonds on the stock market will protect your money from inflation. Now, it is up to you to decide whether to invest in real estate, gold, or the stock market.
One thing is for sure, intermissions occur, but cryptocurrencies have shown an exponentially growing tendency in value over the years. Most of all, Bitcoin is the most popular one. Litecoin, Ethereum, and Ripple come close to first place. Digital currency is just another type of investment. Sink your teeth deep into the evolution of cryptocurrencies on the market, and decide whether it is worth assuming the risk. It is pretty similar to asking yourself: should I share or not share my bank account with someone.
As you noticed, there are no definitive answers on the future potentials of cryptocurrency. Experts still believe that cryptocurrencies can put an end to traditional money’s dominion. Based on speculation, you can take a chance and assume risks.
We still recommend you to council with genuine finance specialists and your spouse. Above all comes managing finances at home successfully, then you can invest in other alternatives.