Digital Currencies Deserve a Better Reputation
By Space Coast Daily // April 10, 2022
During the past ten years, these currencies have been through good, bad, and ugly phases. Bitcoin was the first cryptocurrency to enter the global investment market in 2009. While many technology experts and other investment enthusiasts leveraged this opportunity, there have been backlashes and negative comments on how these currencies shall be put to use. Visit 1kdailyprofit.app for more information.
Many economists and trade specialists thought that cryptocurrencies could impact the overall economic situation. Since these coins work on blockchain technology and a decentralized finance model the probability of utilizing these funds for money laundering, and terrorist activities. However, these negative comments took a positive turn with Bitcoin starting the data mining activity as well. Data mining is a process undertaken by users to validate each transaction undertaken using cryptocurrencies. There are complex algorithms involved in validating these transactions. The same is undertaken from across the globe using their computers and high internet connection.
Another additional advantage these cryptocurrencies possess is their limited supply in the market. Bitcoin again is a classic example here. It is estimated that by end of 2040 the total supply of this cryptocurrency shall stop in the global market. There are other cryptocurrencies also that are focused on burning down their coins taking a periodic interval. Binance token is a classic example of this process. At the end of every quarter, the exchange uses one-fifth of its profits to buy back and burn down its existing currency in the global market or available in its treasury.
How is cryptocurrency handled today?
Much hype and craze are already around cryptocurrencies. This is evident from the overall crypto investments from across the globe. Other than Bitcoin, multiple other cryptos saw the daylight in the last decade. Ethereum, Polka dot, BNB, Dogecoin, and Shiba are a few popular names in the industry that has attracted investments from across the globe.
Yet another added advantage of cryptocurrencies is their ability to not get pegged down to a particular currency. This makes it different from fiat currencies yet utilizes the same for all activities as supported by fiat currencies.
How are global countries accepting cryptocurrencies?
Yes, indeed, cryptocurrencies were not welcomed as a traditional currency model by any country. The concept of decentralized finance makes cryptos unregulated and detaches intervention from central banks, regulatory agencies, etc. Despite this working model, many countries today are looking at the growth of cryptocurrency and its benefits to the economy. El Salvador became the first country to officially accept Bitcoin in exchange for goods and services. Few other countries are following suit. Though many countries have not given legal status to this currency model there has been tax imposed on this investment including capital gains. India is another addition to the list wherein the country has imposed its highest tax slab on capital gains from crypto investments.
Is there any advantage by owning cryptocurrency?
The primary advantage of cryptocurrency lies in its ability to not peg down to any fiat currency. Cryptocurrencies and digital wallets can be flexible and provide credit services. These types of currencies have also the ability to liquidate themselves to other assets including gold, fiat currency, and sometimes real estate as well. Cryptocurrencies also can protect their investors from economic turmoil including inflation. The greatest example of this situation is the methodology adopted by Venezuela. Citizens convert their salaries to cryptocurrencies. In turn, they utilize blockchain technology for the transfer of money and other payments.
For countries that are looking at legalizing and developing a governance model around cryptocurrencies, this is the right time to make changes. Every transaction undertaken using cryptocurrency is broken down into multiple chains of blocks and stored in an individual public ledger. This makes it easy to track all transactions including the user. Another option available to investors is its ability to create a long-term investment protocol. If you are not looking for a trading option then this is an ideal investment model.
Risks or disadvantages of investing in cryptocurrency
Unlike other investment models, cryptocurrencies are highly volatile and fluctuate in market prices often. Indeed, there have not been major market crashes in cryptocurrencies, however, it is also true that there have been major price plunges and surges in the past decade.