While cryptocurrency has shown tremendous potential, many still find it too technical for their liking. To simplify things, think of cryptocurrency as money on software platforms. In addition, it would help to also know that companies/teams behind cryptocurrencies are creating new software platforms aside from creating a new form of currency.
One of the goals of cryptocurrencies is to improve existing networks or software systems. For instance, when sending money via Western Union, Fedwire, or PayPal, it is synonymous to sending fiat money electronically, just like Bitcoin. However, that’s basically where the similarity ends.
For starters, platforms like PayPal have strict limitations in place in terms of what you can and cannot do. For instance, you can’t send nor receive money from certain countries like Nigeria. Cryptocurrencies like Bitcoin however makes financial transactions more accessible and open for everyone the world over.
To help you understand cryptocurrency and cryptocurrency trading more, let’s touch on a few fundamentals.
Is cryptocurrency real money?
Yes, it is. However, since it’s a new concept, it will take a bit of time before people will completely understand and accept it. Websites like Newegg and Stripe now accept Bitcoin payments and allow merchants to honor transactions involving Bitcoins.
What are the risks in cryptocurrency investing/trading?
While there are several, let’s examine 3 of the top ones:
There is a possibility that the technology will fail
Keep in mind that cryptocurrencies are software, so similar to pets.com or Webvan during the dot-com times, it can fail. Understandably, there are also a lot of hype and speculations about cryptocurrencies staying power.
Fortunately, cryptocurrency so far has shown to have robust staying power. However, to protect your investment, treat cryptocurrency trading like you would when trading software stock. While others can fizzle, there are others that can dramatically change how the world functions.
Moreover, if you want to invest in the cryptocurrency space, consider getting the help of an ICO consultancy a must. Kryptoia for instance has a team of cryptocurrency experts that can help ensure your investment is protected at all times and your business thrives.
Technical savvy is required
You don’t necessarily need to know how to code but if you’re highly tech challenged, it would be good to refrain from cryptocurrency trading for a bit until more user friendly interfaces are introduced.
The good thing is even if you are not tech savvy, you can still give cryptocurrency trading a go by investing in the able guidance of a seasoned ICO consultancy. Kryptoia for example has cryptocurrency experts that can help ensure your investment is taken care of and protected.
There’s still several technology and broker risks involved
Since the technology is still considered emerging, there’s still plenty of unknowns in terms of how software and technology will react to unforeseen events.
What are currency characteristics you need to look out for?
Cryptocurrencies have not been created equal even if they’ve all been based on blockchain technology. Below are some of the differences you need to keep in mind and understand to help you make wise trading decisions:
- What is the speed of the processing transaction?
- Will there be a limitation on the total number of currency that’s going to be available?
- Will the supply of the currency be unlimited?
- Are there any big investors in the project?
The aforementioned are just the basics you need to cover. Once you gain a better understanding of cryptocurrency, you’ll be able to trade wisely and effectively gauge its long-term viability.