To better understand cryptocurrencies, see how they are explained in each of the following characteristics:
Digital: Cryptocurrency is digital or virtual money, so it does not have a tangible form like coins or paper money.
Peer-to-peer: Cryptocurrency is passed from sender to receiver online.
Global: Cryptocurrencies are global and valid in all countries as long as the country recognizes cryptocurrency.
Encrypted: Unlike bank accounts that use real names, real identities are not used in cryptocurrency accounts especially on Blockster.com. The user is hidden but everyone can see all the transactions happening on the blockchain. Apart from that, there are no restrictions or rules for what cryptocurrency transactions are used for.
Decentralized: Banks do not act as central stores of money. Cryptocurrencies are not managed by a central server, that’s why they are called decentralized.
However, all transactions are recorded in the blockchain. The listing is done by cryptocurrency miners. Miners are people who run servers and play a role in verifying transactions. The trick is to solve complex cryptographic puzzles to validate transactions. If successful, the miner will get a commission in the form of digital money that can be used.
Mining this digital money requires a series of software and solving computer algorithms. The device used must be a computer with special and sophisticated specifications, as well as large data storage.
Blockchain is like a ledger that contains data for every transaction. Anyone can access this platform even if they don’t make virtual transactions. You can visit here to know more about Cryptocurrency
Truthless: Users can send money to each other online without having to entrust money or information to a third party (in this case the bank).
Rich Sudden from Cryptocurrency?
You can use crypto currency to make purchases. However, in Indonesia crypto money is not yet a generally accepted payment.
In addition, many people use cryptocurrency as an investment. Maybe you’ve heard of many people who became rich suddenly from Bitcoin.
Since it was first released, the price of bitcoin has experienced a very rapid increase. However, the volatility is also high, that is, it suddenly increases or decreases in value drastically and in a short time.
Quoting from Investopedia (21/3/2021), the price of 1 Bitcoin (1BTC) was $1 in April 2011. This price rose 3200% in 3 months to $32 in the same year. However, the price fell to just $2 in November 2011.
In December 2014, the price of 1 BTC reached $1156, but in early January 2015, the price dropped sharply to $315 in just a matter of days!
This makes cryptocurrency a high risk investment. Can be very profitable, but the potential loss is also very large. In fact, as quoted from Forbes (26/2/2021), Bill Gates himself warned anyone to be careful in investing in cryptocurrencies. Unless you have as much money as Elon Musk. In fact, Bill Gates made it clear that he would not ‘go along’ in investing in Bitcoin.
In addition, the Financial Services Authority warns that currently there is an increasing number of fraudulent cryptocurrency investments that offer high-interest investments.
Therefore, before deciding to invest in any instrument, wisdom is needed. First, identify the risk profile and adjust it to your goals and financial condition.