Cryptocurrency and it’s future

Cryptocurrency and it’s future

This article is about “Cryptocurrency” and it’s future, we will understand what is trading, meaning of investing, difference between trading and investing, what is a cryptocurrency and how does it work, are cryptocurrencies the future of money, Is dealing in cryptocurrency safe, how to invest in cryptocurrency, top 3 cryptocurrencies to invest in 2022, According to the new budget, what policies are made to invest in cryptocurrency, Advantages and disadvantages of investing in cryptocurrency.

What is trading? 

Trading refers to the act or process of buying, selling, or exchanging commodities, either at wholesale or at retail, within a country or between countries.

When you trade, you make more frequent transactions. For example, you might buy and sell stocks, commodities, currency pairs, or other instruments. The goal is to generate returns that outperform those of buy-and-hold investing.

Meaning of investing 

The term investing refers to the long-term process of selling and purchasing securities. Retirement accounts are often used in investing.

The purpose of investing is to build wealth over time by purchasing stocks, baskets of stocks, mutual funds, bonds, and other investment instruments and holding them for a long period.

Investors typically hold onto their investments for years, or even decades, taking advantage of benefits such as interest, dividends, and stock splits along the way. Despite fluctuations in the markets, most think price drops will be corrected and any losses will eventually be recovered.

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Difference between trading and investing 

Trading and investing are two very different ways to position yourself in the financial markets to make profits. Generally, investors try to make a large profit over an extended period using buying and holding. 

Traders, on the other hand, enter and exit positions as markets rise and fall, taking smaller, more frequent profits.

What is a cryptocurrency and how does it work? 

The origin of cryptocurrency can be described as decentralized digital money based on blockchain technology and protected by cryptography. To understand cryptocurrency, one must first understand three terms – blockchain, decentralization, and cryptography.

The blockchain is a digital ledger, which records data related to a variety of assets, such as money, houses, or intellectual property.

The term decentralized money refers to the regular currency we use, which is controlled by authorities such as the Reserve Bank of India, as opposed to the term centralized money, which is managed by authorities such as the Reserve Bank of India. There are many reasons why decentralized money should be preferred over centralized currency.

As a concept, cryptocurrency operates outside the financial system and does not have any government regulation. One of the most widely used cryptocurrencies is Bitcoin.

Are cryptocurrencies the future of money? 

There is no denying that cryptocurrencies are the future of money, but it is important to do enough research before investing. Cryptocurrency investing is not a new thing, but it has been gaining popularity and value recently when bank deposits are seeing falling returns.

Is dealing in cryptocurrency safe? 

It is a risky endeavour to invest in cryptocurrency, and there is a high risk of losing your money. If you don’t want to take that risk, you should skip this venture. There are many ways to profit from cryptocurrency – buying coins, trading coins, mining coins, etc. The last one requires the most effort, but it also has the potential for higher returns.

How to invest in cryptocurrency?

1. You must decide which cryptocurrency exchange you will use; 
2. you must open a fiat money account at the exchange; 
3. you must decide which cryptocurrency you will buy;
4.  you must place your buy order; 
5. you must store your cryptocurrency in a digital wallet.

Top 3 cryptocurrencies to invest in 2022 for beginners

1. Bitcoin

           Over $846 billion in market capitalization, Bitcoin was the first widely accepted cryptocurrency. It’s so popular that at one time, its name was synonymous with cryptocurrency. However, bitcoins have become extremely expensive, but the good news is, you don’t have to buy the whole coin, you can buy smaller fractions of it.

2. Ethereum (ETH)

        Over $361 billion in market capitalization, In addition to being a cryptocurrency, Ethereum is also a blockchain platform that has developed into a favorite of programmers because of its impact on non-fungible tokens and smart contracts.

3. Tether (USDT)

The market cap of Tether is well over $79 billion. Unlike most cryptocurrencies, Tether is backed by fiat currency like the U.S. dollar or Euro, and it holds a value equal to one of those denominations, So, in theory, Tether’s value should be more consistent than other cryptocurrencies, and some favourtors may favour Tether over other cryptocurrencies due to its low volatility.

According to the new budget, what policies are made to invest in cryptocurrency? 

The fate of cryptocurrencies in India was uncertain before the announcement of the Union Budget of 2022. The announcement that a 30% tax would be levied on gains on the transfer of cryptocurrencies was initially seen as an endorsement.

The cryptocurrency tax raised debates on whether the government recognizes cryptocurrency as a legitimate form of currency.

 However, this is not true, and there has also been speculation about a ban on private cryptocurrencies following the launch of the RBI’s own official digital currency. Rabi Sankar, Deputy Governor of RBI, had openly made statements to this effect in February 2022, when he emphasized that India should have banned cryptocurrency. Whether this action is similar to the one taken by the government in 2018 (which was overturned by India’s Supreme Court in 2020) remains to be seen.

Advantages and disadvantages of investing in cryptocurrency

Some of the advantages are:- 

1. Since currency owners have access to the same information that cannot be altered, there is no need for them to “trust” one governing body.
2. Users of this network have access to data, and that data is heavily 

protected. Since the data is shared, all users have to sign off on the accuracy of the data, so there is very little scope for data misuse or miscommunication.

Some of the disadvantages are:- 

1. Cryptocurrencies carry as many risks as they bring in rewards. Because they are highly volatile and speculative, cryptocurrency investments can have dramatic downward spirals.
2. The sluggish nature of the blockchain causes delays in transactions, Thus crypto payments are inefficient when compared to modern electronic payment methods. This is a complex issue with more to do with technology than anything else.
3. Cryptocurrencies are an unpopular concept because they are a relatively new concept, and there is no guarantee of their long-term sustainability.