In modern times, cryptocurrency has taken the world by surprise, mostly by its volatility as it tends to do very good some days and others, very bad. 2021 has been quite significant in terms of cryptocurrency and the sheer transparency of how it works. 2021 has also been surprising as quite a few cryptocurrencies got to their highest and the Chinese government banned the mining and trading of cryptocurrency.
Cryptocurrencies can be an extremely volatile investment
Cryptocurrency is becoming very popular among the people of the business and financial world. There are people that don’t want cryptocurrency to become such a big part of the financial world while others praise it and want it to continue. The opinions of the people are diverse and valid, and so are the risks and profits of investing in the world of cryptocurrency.
Cryptocurrency’s volatility can be measured by this. It is the cause of the worst economic breakdowns and the cause of the best and highest possible profit.
It is a fairer, more transparent financial system
Blockchain technologies allow transparent transactions. It is the key to the surging growth of cryptocurrencies. All transactions can be easily viewed and allow anyone to see them occurring live.
It has the potential for high rewards
This popular form of investment attracts traders and investors on a huge scale because of its potential high benefit from its volatility, not affected by the geopolitical price fluctuations and gives the user the anonymity they need. For example, anyone from anywhere can trade and sell cryptocurrency and no one would know.
Plus, digital currency recognises no border or country, which makes it free from tax and limitation. An investment that’s transparent and ready for you to start earning from it and spend it anywhere around the world with no restrictions is not only ideal, but the defines the future of the global financial system.
Cryptocurrencies are not backed by tangible assets
Gold, silver, and other precious metals have been around for millions of years, which means investors know how this works. Similarly, fiat currencies derive their value from the power of the government. However, there is no tangible asset or government decree which assures the value of cryptocurrencies.
Investors can be vulnerable to security risks
There are many ugly ways of investing in cryptocurrency like the exploitation of criminal activities, scams, money laundering, etc. These are all the results of cryptocurrency being an encrypted virtual currency and not being controlled by a central authority as no government or authority can intervene in trading in them.
There are elements that make investing in the crypto world look attractive and clean, but it also makes them highly susceptible to illegal activities and even link it to terrorism. As there is no protective layer whatsoever, the users are very much exposed to threats without any governance.
Cryptocurrencies are not predictable
Nobody really knows what will happen to cryptocurrencies in the future—and you need to be brave to enter in it as an investor. For property, precious metals and stones, and
Environmental Impact of Cryptocurrency
The most major drawback of cryptocurrency is the technology used to mine it. The crypto mining process requires computing energy and power, and with the world already being at a drastic war against climate change and failing it, crypto mining process makes the losing part of ours even more guaranteed. This is mainly because the CO2 emissions are on par even when compared to countries.
There are signs that crypto miners are working to find a cheap and clean source for this work but as the things stand, there is no confirmation of clean energy used by the miners of cryptocurrencies.