Described by many economists as the ‘future of money’, cryptocurrencies are big news taking the world by storm.
Spearheaded by Bitcoin, which launched in 2008 as the first-ever cryptocurrency, there are now thousands of these digital assets growing day by day. However, that doesn’t make it any easier to grasp.
So, if you find yourself puzzled by crypto, know you’re not alone. We’ve put together a jargon-free breakdown of the basics to help you make sense of it all.
What is cryptocurrency?
At its core, cryptocurrency is virtual money that can be traded and used to pay for things over the internet. Unlike the pound, crypto is ‘decentralised’, meaning it is not managed or controlled by governments and banks. As such, transactions are conducted peer-to-peer, and the value is determined by supply and demand, making cryptocurrencies unpredictable and difficult to value accurately.
Why is crypto considered the future of finance?
As crypto continues to gain momentum, its longer-term implications are coming into focus. Cryptocurrencies have powerful advantages over previous payment methods and traditional banking. They expand people’s economic freedom from low transaction fees and speedier processing to greater security and privacy. Having recognised this, more businesses are now accepting crypto as a form of payment for their goods and services.
Is cryptocurrency a smart investment?
Online exchanges have made buying, selling, and trading cryptocurrencies secure and rewarding. Of course, cryptocurrency has made plenty of people very wealthy due to significant growth. For example, a mere $100 investment in 2011 would now be worth an eye-watering $5.7 million today.
That said, every investment carries a risk. Major fluctuations have led to huge losses, so you should only invest money you can afford to lose.
Which crypto should I invest in?
Choosing the right crypto for you involves several factors, and it’s not a decision that should be taken lightly. Start by reading some guides and user reviews and remember to check whether it has longevity. Consider: what will drive future price movements? And what is the price-performance to date? If in doubt, delay investing and research some more!
To discuss your requirements and find out more about protecting your wealth, speak to a member of Turner Little’s trusted team today.