Everyone’s heard of cryptocurrency by now, and most of you will have even invested in it too. What used to be a strange, unfamiliar, and hard to understand term is actually now something that’s taken very seriously, and has enabled so many people to invest in a more modern way.
I’m not an expert on investing, or in cryptocurrencies, but I thought I would give you a little rundown, from one layman to another!
(This is not financial or legal advice and is purely for information).
Ok so, what is it?
Cryptocurrency is a digital currency. It holds value, and this can go up and down, just like any other currency.
You can use crypto in the same way you can with other money, but the main difference is it’s not physical, so you can’t withdraw crypto and use it like cash.
Crypto is decentralised which means that it’s free from third parties and isn’t issued by a government or other authority. The data is split between many different computer networks and doesn’t rely on one system and one bank.
Because it uses decentralised systems, crypto can’t collapse in the same way other, more traditional currencies can, and they aren’t as prone to attack. It’s like looking after your own money and not involving the bank, while also keeping it as secure as physically (or virtually haha) possible!
There’s loads of benefits to crypto, including cheaper and faster money transfers, which is amazing, especially for those who have family and friends abroad, or who have their own bank accounts in other countries as these fees can be incredibly high.
It’s reliable, there’s nothing to cause payments to fail, no transfer limits, 24/7 access to your money and anyone can use it.
So why is it called crypto? Well, because that’s what it is! The currency is encrypted and decrypted using a method called cryptography, and it is this that makes it so secure.
Now I know what it is, should I invest?
As with everything you should invest in something that you believe will make you a return on your investment. For some people that’s property, others that’s stocks and shares and for some people it’s designer handbags! But now we can also invest in crypto, and it’s worth trying because the investment can be small.
The reason I invested some money into crypto is because I didn’t want to invest a lot, but I wanted to dip my toe, and you can invest as little as a few pounds. For me, it’s a great way to begin investing, without having to spend a huge amount of money and take massive risks, but also having fun and ‘risking’ making money in the process.
Of course, there have been crazy things happen in the crypto world, with lots of people making a serious amount of money for very little investment, and it’s these successes that I think make people skeptical. I know so many people who refuse to invest because ‘those situations can’t possibly happen again’, but we don’t know that they won’t!
It’s also no different to other investments where your return could go up or down, or you could lose everything in the process, it’s just a new platform.
What have you invested in?
I used to have some money in shares, but last year I decided to put this money into Bitcoin instead. I also bought Stella Lumens and have a very small amount of money in a couple of other coins too.
I wanted to move from a more traditional way of investing to something more fun, and I feel like the crypto market is a really fun space. Of course, still with its risks, but with the rise of NFTs and with crypto inevitably becoming the future of finance, it makes a lot of sense to me to get to know the system and equip myself with knowledge before I find myself left behind.
If you are considering investing in cryptocurrency, it is really important to seek financial advice, only invest what you can afford and make decisions based on your circumstances and what works best for you.