This type of digital investment is still relatively new and confusing for investors who are used to investing in gold and mutual funds. Therefore, education is needed regarding digital investments such as Cryptocurrency.
Cryptocurrency Definition
Cryptocurrency is the term for digital or virtual money passed from sender to recipient online so that it is intangible, like coins and paper money.
Cryptocurrency is global because it applies in all countries as long as the government recognizes Cryptocurrency. Cryptocurrency users hide their data so that other people can only see all transactions on the blockchain but do not know the sender or recipient.
Blockchain is likened to a ledger containing data for every transaction. Mine digital money requires a series of computer software and algorithms. The computer specifications must be sophisticated and unique and have ample data storage.
With cryptocurrencies, users can send money to each other online without involving a bank as a third party. Cryptocurrency is also classified as a high-risk, high-return investment because bitcoin prices can soar and fall sharply in just a few days.
You also need to know the advantages and disadvantages of cryptocurrencies for consideration when you want to invest or make transactions.
Here are the advantages and disadvantages of cryptocurrencies.
Advantages of Cryptocurrency
1. Transactions are faster, more transparent, and more practical
2. Protected against identity theft because it does not use real personal data
3. Everyone can transact with cryptocurrency anytime and anywhere because there are no country restrictions and holidays like banks.
4. The limited number of bitcoins makes the cryptocurrency more resistant to monetary inflation.
Disadvantages of Cryptocurrencies
1. Cannot be used for buying and selling transactions in Indonesia
2. Currency values are difficult to predict
3. The value of bitcoin fluctuates a lot or can suddenly fluctuate drastically
4. Vulnerable to being used as a tool to carry out illegal activities such as money laundering because they do not use real identities.
Thus the discussion about cryptocurrencies. Cryptocurrency is a great innovation in the world of capital markets and finance. The presence of cryptocurrency increasingly opens the transparency of transactions between communities. However, this openness can also carry the risk of illegal activity occurring. Therefore, we must really understand the use of cryptocurrency.
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