Food, banking, clothing; a glance around and everything are in digitalized form. Digitalization of everything has become a talk of town for quite a while now. Cryptocurrency is such buzzing topic as well.
What is it?
Imagine you’re on making a trip to the store, you find a product you need take out your wallet and make payments. Now, this payment being made electronically or as in digital money that is what in basic is cryptocurrency.
Availability and where to buy them?
The cryptocurrencies are available in a long listed manner but the ones that have been seen with high liquidity values and capital in market are: Bitcoin, Ethereum, Lite coin.
The places that have been regarded as the best to buy cryptocurrency are: Coinbase, eToro, Robinhood, Coin Mama, BlockFi and Bisq as they are the best in terms of overall, beginners, no cost, instant, interest & browsing and privacy respectively.
What makes it so popular?
When people find value in something, they change the wind it flows towards. As cryptocurrency has a future, people are trying their best to pocket it in time. With banks being the current in charge of money supply management, the issues like reduction in money supply due to inflation and various financing issues due to global crisis. Money invites risks, the lower the risk path, the more people wish to run towards it. This is why cryptocurrency is popular. Also, as it uses blockchain technology, they are considered to be more secure than traditional methods of payment.
What is blockchain technology?
Blockchain technology refers to a special database or distributed ledger technology (DLR). As the term, data are collected in and stored in block. Each block has a data that are over timely built over the existing block and this continuation gives rise to a chain which is Blockchain.
How does one buy it?
As cryptocurrency uses blockchain technology, the once used data cannot be modified of deleted. When it comes to the buying of cryptocurrency,
- In case of Bitcoin, purchase can be made by using U.S dollars
- While there are requirements such as buying cryptocurrency through bitcoins or another cryptocurrency
- To buy cryptocurrency one needs wallet (an online app that holds your currency; there are two kind of wallet hot and cold: with and without use of internet respectively; hot wallet is preferred more)
- Creating an account on an exchange
- Then transferring real money to buy cryptocurrencies like Bitcoin or Etherum
Coin base is one of the popular cryptocurrency trading exchanges for creating wallet and buying or selling of other cryptocurrencies.
Is it legal?
Cryptocurrency being legal depends on the country. As it is on ban in China and also cryptocurrency like Bitcoin as of 2017 was banned in Nepal.
Cryptocurrency in Nepal
Despite Bitcoin being banned in Nepal as of 2017 by Nepal Rastra Bank on regulations of acts on foreign exchange and other acts, the debates about the country being held back and not being progressive enough has still been an ongoing issues. However, it is still illegal to own cryptocurrency in Nepal.
Security in buying
ICO as in initial coin offering is another form of cryptocurrency that most business uses for capital raising purpose. Its uniqueness is in its token function system, where an investor is given access to certain features of the project.
This is why while buying in ICO, the prospectus of the company is thoroughly studied as it offers information about:
- Ownership of the company
- Major investors
- Possibility of owning a stake
- If one would just receive currency tokens
- Is the currency developed or are you the one taking risk to develop it with them
These features help steer clear of investment pitfalls.
So, is making an investment worth it?
Traditional or digital there risk pardons none. Though, they are up in value and many investors view them as nothing more than profit by fluke, high volatility and as for one to profit, someone has to pay more for the currency than you did. As reasoning of volatility and various issues of money laundering and tax invasion whereas other threats are seen as a possibility. Still, based on investor’s reviews cryptocurrency in terms of decentralization has great potentiality as a digital asset for investment.