An Overview Of Cryptocurrency Investment

Certain forms of alternative investment have been around for years, and are therefore fairly well accepted or trusted (even if that doesn’t mean they’re sure things). For instance, people have long looked to real estate investment as a means to make money outside of traditional stocks and options, and sometimes with very fruitful results.

Every so often a new alternative emerges though, and we seem to be in the process of this happening with regard to cryptocurrencies. Originally designed to spar with ordinary currency, and potentially replace it, cryptocurrency has since become more of a commodity – which is to say it’s seen now largely as something to buy with the hopes of profiting.

It’s too early still to say whether or not this is a good idea, or even whether cryptos are viable in the long term. However, because this form of investment is gaining popularity fairly steadily, it’s worth covering with a general overview.

What Is Cryptocurrency?

For any readers who may not be familiar with cryptocurrency at all, don’t be concerned – many are still getting acquainted with the basic concept.

Cryptocurrency emerged first through bitcoin. It was designed as an encrypted, decentralized digital asset, with no financial backing or corresponding physical form. To put it bluntly, it was made up. However, it gained value through the fact that the process involved in digitally mining it is expensive and difficult, as well as because it was set up to be finite (and in the grand scheme of things, fairly limited). Once put out into the world, bitcoin can be stored, transferred, and used to buy goods and services – all by way of digital transfer on a universal public ledger known as the blockchain.

Some find it helpful to think of bitcoins and other cryptos as digital tokens, which can be bought, used for purchase wherever accepted, stored, and sold for a profit or loss. This simplifies things somewhat, but it’s not entirely inaccurate – and really, it’s essentially describing the nature of a commodity.

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Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are ...

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