Last Updated on: 22nd November 2023, 03:51 am
Over the last couple of decades, the world has changed considerably compared to how it was before. Nowadays, we can enjoy a wide variety of amenities that once upon a time were pretty much impossible. We can watch movies in the comfort of our houses and talk with family and friends through our smartphones in the blink of an eye. In some industries, thanks to how technology has evolved, people can even work from home, and this became very present during 2020 due to COVID-19.
But these changes did not only affect people and their daily lives. Companies now rely more on digital marketing than traditional marketing, and websites like YouTube and Facebook have become one of the best platforms for marketing, even more, efficient than regular T.V commercials. We can all agree to say that technology has come to stay and is only evolving from now on.
Along with these changes that technology brought, the way we handle money has also changed considerably. Now, more than ever, handling money is much easier than ever. With a single credit card, we can travel to several countries without worrying about exchanging currencies and rates, since a lot of stores and commercial premises allow the use of credit cards.
There’s also the fact that we can easily have access to our bank accounts through our smartphones using specific applications owned by the financial organization of our choice, making it easier to check our balance, perform bank transfers, save up money, and perform online purchases.
But a single thing that has shaken the commercial world has been gaining a lot of popularity over the last decade, something that is known as cryptocurrencies.
What Are Cryptocurrencies?
First of all, we can all agree to say that cryptocurrencies enter the category of digital currencies, meaning that they don’t have a physical representation and can only be used under specific circumstances. That being said, digital currencies are now have broadened their horizons, and it is possible to use them in a large variety of ways.
However, cryptocurrencies are a little bit more complicated than that. As showcased at https://en.wikipedia.org/wiki/Cryptocurrency, there’s a lot to understand about them. If were to explain them briefly, I would say that cryptocurrencies are created through the use of a technology known as blockchain and cryptography, in which data is analyzed carefully using various computers all around the world.
This analysis and process of data are what allows the creation of this specific type of digital currency, thus, making it a decentralized form of currency that cannot be managed by a single organization, since it is, through the combined effort of multiple computers located all around the world, that cryptocurrencies are capable of being created.
The Uses of Cryptocurrencies
Because of the blockchain and cryptography systems, these cryptocurrencies are known for being pretty much impossible to track, which grants their users a whole new level of privacy when it comes to their management and use.
This, of course, means that it can be used for malicious transactions, and this is actually one of the reasons this specific type of digital currency is frowned upon since it can be used illegally.
Still, there’s also the fact that it can also be used for good things, especially if privacy is absolutely necessary. Good examples include people trying to run away from abusive partners or family, people who want to undergo surgery, or people who want to be private about their savings and investments.
However, most of the time, it is mostly perceived as a form of investment, since it can be exchanged to multiple currencies pretty easily, and its value is rather volatile, so investments can end up generating a lot of profit.
Investing in a Cryptocurrency
Sadly, investing in a cryptocurrency can be more complicated than most people initially expect, and the reason for that is their volatility. Although there are way too many cryptocurrencies to pick from, such as this PKT website, Bitcoin, Ethereum, and many more, each one has its own personality, and its value fluctuates depending on multiple factors.
The problem is that some of these factors are pretty much indecipherable and cannot be predicted, so, although investing in a cryptocurrency can definitely generate a lot of profit, especially in the long-term, it can also make you lose a lot of money.
Ideally, the process of investing in a cryptocurrency should be perceived as something that requires a lot of research and understanding of the industry, and also, should be monitored constantly to ensure that the cryptocurrency of your choice remains stable. Acting based on the market’s flow is indispensable for good investing practices, so you should be constantly paying attention to it, and being aware of the market’s news.
Shot-Term vs Long-Term Investments
Investments usually enter two main categories: short-term and long-term investments. The greatest thing about cryptocurrencies is that you can engage in these two categories, depending on your goals and mindset.
Short-term investments are the ones that are done for a very short period of time, for the sake of generating profits that are considered small in comparison to the profits generated through long-term investments but can ultimately generate more if done properly, since these profits can then be used to invest, even more, creating a snowball effect.
The problem with short-term investments is that you will have to constantly engage in the process and learn a lot about them, and also, invest in various cryptocurrencies to create a constant flow of profit generation.
Long-term investments require less monitoring and attention and are much easier to handle. However, just like they can generate more profit over time without too much work, they can also end up causing loss if you don’t pay attention. Most of the time, a good long-term investment will require a lot of knowledge and experience, so they are not recommended for beginners. They are often recommended as options for retirement plans or long-term saving journeys.
Ideally, you should engage the experience depending on your circumstances, and how much are you willing to risk. That being said, you shouldn’t invest money that you consider necessary to pay your expenses, and also, be prepared to lose the money you decide to invest beforehand since the very first journeys are more of a learning experience.