Is Cryptocurrency a Safe Bet?

cryptocurrenciesPeople have been investing in the stock market for generations. While it’s a mystery for some, there’s an entire sector of the financial field dedicated to analyzing the market trends in exchanges across the world.

Financial advisors are willing to offer investors advice and manage their money for commission fees. The more savvy investors who understand the market and have educated themselves on various commodities and corporations can often dictate their own strategy and the volatility of Wall Street. Despite the surplus of professionals, tools, and even pundits who scrutinize the rise and fall of share prices day in and day out, there’s still an element of risk to investing.

Over the last decade or so, cryptocurrency has been gaining ground and looking to join the respected ranks of the Nasdaq and New York Stock Exchange.
However, the ambiguity that accompanies cryptocurrencies has stymied its attempt at widespread growth to some degree. Adding to the challenge has been their history of instability, recording massive shifts in value over relatively short time frames. However, cryptocurrencies have still managed to function as a viable product in the marketplace, as universities are even beginning to introduce business courses dedicated to their study and analysis.

With cryptocurrency still in its infancy compared to the rival financial institutions at work across the globe, it’s still too early to tell whether the fears surrounding its creation and usage are unfounded. Just like the transactions in the stock market, dealing in cryptocurrency inevitably requires a more in-depth understanding before venturing into any significant investment. Sites like can provide additional explanation and trading information.

Cryptocurrency may be likened to the stock market in the sense that a transfer is taking place on some level. Trading on Wall Street involves shares which aren’t tangible objects, but rather a series of transactions. Cryptocurrency is also transaction-based, but this is where the similarities taper off.

What exactly is cryptocurrency? In the words of Satoshi Nakamoto who’s credited with inventing Bitcoin, this management of digital or virtual currency is, “a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It’s completely decentralized with no server or central authority.”
This unprecedented development sought to eliminate the concept of a centralized mechanism to track monetary transfers by pushing it out to all members of the payment network.

Cryptocurrency leverages blockchain technology to safeguard the integrity and security of the transactions and data. Each entry is essentially a block of digital information that’s added to a public database to continue the ‘chain’ of data. Cryptography is employed to link and label the blocks that are verified before being added to the chain. This system of adding blocks makes them virtually hacker-resistant.

As society grows more comfortable with apps that share rides and homes, there seems to be a growing appetite for data sharing as well. Even though encryption allows for anonymity when accessing cryptocurrency, the safeguards built into the system effectively prevent outside security breaches. However, it’s essential to be comfortable with the nature of the transaction before executing any exchange involving digital currency. Unlike traditional interactions involving third party facilitators with centralized databases where there tends to be some recourse, cryptocurrency transactions are final. Just be sure to research and perform due diligence before investing.

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