The global cryptocurrency market is constantly growing. Over the last decade cryptocurrency has become a popular investment, so more and more people are curious to invest in it. Between 2023 and 2030, the global cryptocurrency market is expected to grow at a compound annual growth rate (CAGR) of 12.5 %.
What are the market's main trends? What are the main pros and cons of investing in crypto? Where to buy and sell cryptocurrency? You can find all the answers and much more in this guide. Let’s get started.
What is a cryptocurrency and how does it works
Cryptocurrency is one of today's hot topics, but many people do not have a smooth understanding of this market. Cryptocurrency considers any form of currency existing virtually. It's a peer-to-peer payment system that makes it possible for anyone and anywhere to send and receive money.Cryptocurrencies are based on blockchain, which keeps track of all transactions updated and held by currency holders.
We can cluster cryptocurrency into two distinct categories: coins and tokens. Crypto is intended for usage as a form of payment, whereas tokens are built on existing blockchains and can represent assets like digital artwork or something else.
Benefits of owning crypto
As we have already defined cryptocurrency and its categories, let’s focus on its benefits. If you want to benefit from that industry you should embrace rules and compliance. Although the cryptocurrency industry is not the easiest to navigate, maintaining compliance with laws is important if you run a crypto farm. You may enroll in a free crypto compliance training to keep your staff and business stay aware about changes and regulations. Some find crypto appealing because of its decentralized nature. This market is free of Central Bank of Governments control.Relatively secure
First benefit of cryptocurrency is its payment security. Compared with credit card transactions cryptocurrency does not need third party verification, which makes it more secure than cards. In this case your data is not stored making identity fraud virtually difficult.Today when we do most of our transactions online and live our lives online digital security is important. To protect your data and identity, check out the most recent Primer on Digital Security.
Privacy
Privacy is another benefit of cryptocurrency. There is no need to sign up for an account at a financial institution while using cryptocurrencies. Your wallet address serves as a unique identifier on the blockchain, it does not contain any personal data about you.Transactions speed and costs
Cryptocurrency is also appealing thanks to its transaction speed. It only takes a few minutes, whereas card transactions often take up to five days to complete. The cost of crypto payments is typically lower as well. Nonetheless, demand for blockchain transactions can occasionally rise.Inflation protection
Cryptocurrency along with gold is considered to be an “inflation-proof” investment. Some crypto enthusiasts insist that Bitcoin can be an effective hedge against inflation. They strongly believe that cryptocurrencies will become less volatile as they gain acceptance.Frankly speaking, crypto prices have fallen in 2022. For example a few months ago Bitcoin lost more than 50 % of its value, but it's difficult to say how much of that is due to inflation.
Possible risks for crypto investors
While investing in cryptocurrency may seem compelling to some, others are skeptical of its effectiveness. Let’s discuss some risks you can face:Volatility
You have to be patient if you aim to invest in crypto. It is not the best bit if you are looking to make a consistent return. Cryptocurrency can quickly plummet to terrifying lows. So, first of all consider cryptocurrency volatility before investing in it.No refund and cancellation
According to digital currency protocols, transactions cannot be canceled or altered once they are initiated. Generally, cryptocurrency transactions are irreversible.Consider the case where you sent a cryptocurrency to the wrong address. There is no way to cancel the transaction in this case. You should accept the fact that you lost your investment. The only way to return them is to contact the person to whom you sent the transaction and request to return them.
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