If you are looking to acquire knowledge about cryptocurrency then you have hit the right place. In this article, we are going to discuss the various important facts about cryptocurrency before Investing. So read the article carefully till the end for facts to know about Cryptocurrency.
Most people are confused with the terms cryptocurrency and blockchain. Even though cryptocurrency and blockchain are relatable but both are a way different. However, our major objective in this article is to discuss cryptocurrency and what impact it could have.
Also Read: Differences Between Blockchain and Cryptocurrency
What is Cryptocurrency?
In simple words, you can think of cryptocurrency as a digital asset. Cryptocurrency is virtual money and has no physical counterpart. It serves just like ordinary money like euros, pounds, dollars, and all. As it has already been said that it is virtual money so you cannot think that cryptocurrency can be carried around with you. Cryptocurrency exists only in electric form.
How Do you Get Cryptocurrency?
In most countries, cryptocurrency is often overlooked and neglected. In other words, transactions of cryptocurrency are banned in some countries. However, there are different mediums and platforms from which you can buy a cryptocurrency and acquire your asset.
Cryptocurrency is a digital asset and you can transfer to someone online just like the way you transfer money to your bank. It can be used for quick payments where you want to have a transaction fee. But the question here is where can you get cryptocurrency?
Cryptocurrency can be bought with the help of a credit card. In some cases, cryptocurrency mining is the process of getting cryptocurrency. This form of currency is stored in a digital wallet that might be on your computer or any other storage device.
Facts to Know About Cryptocurrency Before Buying It
In the past few years, there have been a lot of stories where people invested in cryptocurrency. Most of them were benefited with the massive return. This has led many people to grow their interest in cryptocurrency and they have started investing there without knowing the pros and cons of it.
Well before you invest in cryptocurrency we will share some of the important facts about cryptocurrency that will help you to judge whether cryptocurrency investment is worth or not.
Government Do Not Back Cryptocurrency
You know that Bank deposits are backed by the government but cryptocurrency is not backed by the government. In other words, the money that you have in a bank account is protected but cryptocurrency online is not protected. This is because cryptocurrency is not backed by the government.
So there are many companies offering cryptocurrency and when will buy cryptocurrency it will be stored in a digital wallet. In other words, if the company is hacked or goes out of witness then you will lose all your cryptocurrency. The government will not take any responsibility and will neither help you to get back your money. So you can buy cryptocurrency but at your own risk, as you will not get any help from the government in case of any blunder.
Value of Cryptocurrency Changes Constantly
Cryptocurrency is just like the stock market the value of it changes constantly. The cryptocurrency market is very volatile and investment that is worth thousands of dollars may turn out to be just as low as 100 tomorrow.
Moreover, if the value of the cryptocurrency goes down then there is no assurance that it will again gain momentum.
Also Read: Top 5 Cryptocurrency Exchanges to Use
Is it Safe to Invest in Cryptocurrency?
Before you invest in any fund or any asset it is necessary for you to know the risk and figure out any scam. So we have come up with some of the important things to watch out for before you consider investing in cryptocurrency.
1. No One Will Guarantee that you can Make Money from Cryptocurrency
If anybody promises you that you will be a millionaire after investing in cryptocurrency then he or she is a scammer. This is because we have already discussed that the value of cryptocurrency changes constantly.
It can go up as well and go down. You might think that it is endorsed by several celebrities but this doesn’t mean safe at all. So if you are confident enough to lose your money then you can take the risk of investing in cryptocurrency.
2. Companies Promoting Cryptocurrency are Not the Same
Most people confuse themselves that the companies that promote cryptocurrency are the ones offering cryptocurrency to the clients. So you must look into the claims that are made by the companies while promoting cryptocurrency and research well by searching the name of the company online.
Also Read: Top 5 Useful Cryptocurrency Browser Extensions
3. There is No Refund with Cryptocurrency
Most of the market allows transactions through cryptocurrency but there is little chance that they will offer you a refund with cryptocurrency. Wondering why? This is because currency value changes rapidly. If you ask for a return after three days of the transaction made with crypto then the currency value might not be the same.
4. Some Information Might Go Out to the Public
You might know that you can see transactions in any number but there will be some information there will be posted to the public ledger. A public ledger means bitcoins Blockchain where transactions may be posted.
Blockchain is responsible for holding the list of records that showcase if anybody has a transaction with cryptocurrency. Information such as the wallet, the address of the sender and receiver, and the letters that are linked with the digital wallet can be found in the blockchain.
Conclusion
Dealing with cryptocurrency is not a matter of joke there are certain things that you must keep in mind before looking to invest in this virtual platform. I hope this article has given you a wider view of cryptocurrency.
We have discussed what a cryptocurrency is and what are the things you should keep in mind before you go ahead with it. Moreover, as more and more people are looking to invest in this virtual money there are also scammers growing in this field.
