WHAT YOU SHOULD KNOW ABOUT CRYPTOCURRENCIES

Cryptocurrency is more than a hobby since they’ve been introduced since the 90s, but cryptocurrency has started catching the eye of financial institutions and professional traders.

As Bitcoin starts growing in popularity, financial advisors are facing hard questions and also decisions from their clients.

They may talk about the risk associated with investing in Cryptocurrencies and educate them against it, but the final decision is still up to the clients. Advisors should be able to educate their clients on tax issues and other legal things related to cryptocurrencies that they need to know.

BLOCK CHAIN TECHNOLOGY

A ledger kept by all participants in the market is known as the Blockchain Technology. It can also be an incorruptible digital ledger of transactions that can be programmed to record digitally everything of value. Central banks print out physical currencies but cryptocurrencies rely on Blockchain technology to decentralize the process.

In 2009 bitcoin became the major cryptocurrency to gain recognition in the market, and since then it has faced numbers of growing setbacks. The most popular Bitcoin exchange by 2013 that is Mt.Gox, it was handling 70% of all the transactions- but it collapsed after 850,000 Bitcoins worth $450 million went missing.

In the underground bazaar Silk Road the currency became infamous there also before its shutdown.

As of August 2016 each bitcoin was selling for at least $546.10.  The popularity of the cryptocurrency all through the internet has made it an alternative currency in countries where their currency may be unstable or facing devaluation.

Also since its existence it has become more reliable than many newer currencies that are just gaining attraction.

THE ADVANTAGES AND DISADVANTAGES OF BITCOIN

Cryptocurrencies having a place in the society doesn’t make them safe to invest.

Some of their Advantages are:

·       SETTLEMENT: Cryptocurrency transactions are settled immediately without approvals from anybody or a third party or even contracts.

·       FRAUD: They are also impossible to imitate and cannot be reversed.

·       LITTLE OR NO FEES: Cryptocurrencies needs little or no extra charge or fee for its transaction because the miners are compensated by the network.

·       EASY ACCESS: They are always available to the public. Anyone can make use of it.

·       IT IS PRIVATE: Sharing your personal details to the beneficiary is not necessary. Even the government has no say in it, it is really decentralized.

·       IT IS HIGHLY SECURED: Your transactions are secured because it is using NSA CREATED CRYPTOGRAPHY. It is impossible for anybody to make payment other than the person who owns the wallet, except they were hacked and there are other ways to protect you from it.

·       YOU OWN YOUR MONEY: There is no third party with cryptocurrencies, you own your money and you can keep it in your wallet and use it as you like.

WHAT ARE THE DISADVANTAGES OF CRYPTOCURRENCY

·       DIFFICULT TO UNDERSTAND: Cryptocurrencies are not easy to understand that’s why people invest without the right knowledge and end up losing money unnecessarily.

·       IT IS NOT WIDELY ACCEPTED: Few countries have legally enacted the use of cryptocurrency, which makes it unrealizable for daily use.

Before you thinking of investing you need to certify that it is accepted in the country where you want to use it.

·       YOU CAN LOSE YOUR WALLET: You have a slight chance of losing your wallet.

If you stored your money in terms of cryptocurrency on your wallet, you better use a password you can remember and also make sure you don’t lose you devices.

When you lost your coins you won’t be able to retrieve it even with legal assistance.

·       NO REVERSE PAYMENT: If you pay someone mistakenly by using a cryptocurrency, you won’t be able to get a refund of that money you paid. Except you ask the person for the money back, but if otherwise then your money is gone.

·       NO SECURITY: It can be stolen electronically as the security is limited

·       SCALABILITY: The scalability of cryptocurrencies is still questionable and cannot replace credit cards yet.

·       IT IS UNCERTAIN: Cryptocurrencies are new and volatile. Investors and corporations don’t want to invest in this kind of currency with so much volatility.

These are the few points you should know about cryptocurrencies and the poten