5 Reasons Why You Should Go for Cryptocurrency

• By Ritam Chattopadhyay
• 12-07-2022
• Cryptocurrency

Bitcoin and Ethereum have become a buzzword in recent times. Both of these are famous cryptocurrencies and have gained a lot of popularity. With the movement of the global economy towards the digital route, there is one question that haunts everyone.

What is the future of cryptocurrency?
Cryptocurrency is a very commonly heard term, and many have a fair idea about the same. Let's make it clear once more.

Cryptocurrency happens to be a digital or virtual currency that works on a decentralized blockchain. Therefore, it can be considered a new way of making transactions. Cryptocurrency is similar to normal currency except that they are majorly used in the exchange of digital information.

Cryptocurrency has become a very commonly used term in recent times. In addition to this, we have seen a huge inflow of investment into the crypto market. The popularity of cryptocurrency can be very well understood from the increasing number of investors every day. So, the question here is whether to go for cryptocurrency or not. The simple answer is yes, you should certainly go for cryptocurrency and here are the five major reasons to do so.

1. Fraud Proof, Tamper Proof, and Transparent
One of the major reasons to opt for cryptocurrency is because it is completely fraud-proof. They operate on a blockchain, and all confirmed transactions are stored in a public distributed ledger. Therefore, the identities of every crypto owner are also protected, ensuring the legitimacy of keeping the records. Therefore, the security of crypto is very high, and its decentralized nature makes it a fraud-proof investment option.

Moreover, each block in the blockchain possesses a unique code referred to as a hash, which happens to be the point of differentiation from other blocks. In addition to this, each of the blocks of information is chronologically added to a blockchain, thereby ensuring complete transparency at every step, which is highly advantageous.

2. Complete Control Over Assets
Now we know that cryptocurrency is decentralized in nature. This, in turn, helps users gain complete control over their assets by owning and storing them without any kind of involvement of third parties. It is another major reason why you should go for cryptocurrency. In this regard, the assets' value is not determined by any central authority, exchange, or middlemen, thereby giving the investors the freedom to avail maximum profits from the existing exchange rates.

Any of the crypto exchanges determine the assets and their values. Moreover, the users are permitted to buy, sell, and trade their assets at any given point of time without the involvement of any centralized authority, third parties, or middlemen. Recently, we have seen a huge demand for cryptocurrency exchange development services to build crypto exchanges that facilitate crypto trading.

3. Deflationary Assets
Cryptocurrencies happen to be deflationary assets since their supply is limited, meaning their purchasing power rises over a span of time. Inflation plays a significant role in diluting fiat currencies' value over time. However, the effect is not the same in the case of cryptocurrencies. It is because of their decentralized nature that every crypto has an algorithm that limits its total supply.

A government, bank, or any central authority is not able to manipulate cryptocurrencies at their own will. This, in turn, means that cryptocurrencies have the ability to gain more returns as compared to the rate at which fiat currencies lose their value over time.

However, it does not mean that crypto is completely free from inflation. It would be more appropriate to say that they are in a better position to tackle inflation as compared to fiat currencies. If the volume of cryptocurrencies mined rises, their value would theoretically go down, but there are certain measures in place to deal with the same.

For instance, we can consider the example of Bitcoin in this regard. The rate of mining Bitcoin is decreased by half every four years, which has two broad implications listed below.

a) The security of Bitcoin remains intact
b) The rate of inflation becomes negligible

4. Independent and Flexible Trading
The decentralized market of crypto provides the users with immense independence as well as flexibility while trading. The major point of focus in the world of cryptocurrency is peer-to-peer connections which offer a lot more flexibility to crypto transactions. In addition to this, round the clock accessibility of cryptocurrencies adds to the flexibility in trading where the traders are able to organize their trading at any point in time during the day without needing to worry about the time. The crypto exchanges created by the cryptocurrency exchange development services operate 24*7, thereby permitting users to trade whenever they feel like it.

5. Innumerable Options to Diversify One's Portfolio
Going for cryptocurrencies plays a vital role in bringing about diversification to the portfolio of users. It is still not confirmed whether crypto is an asset class on its own. However, the fact is that crypto is resistant to inflation and has the ability to generate great returns. Crypto is uncorrelated with assets such as bonds and stocks, while the USD is negatively correlated with Bitcoin.

These factors might contribute to the worthiness of crypto when added to the portfolio of any investors. At the time when it comes to investing in crypto, there is a wide array of options available, thereby making it a popular choice. The choices are simply endless, ranging from Bitcoin, Ether, Dogecoin, and Ripple to Solana, which in turn helps enhance the chances of increasing returns. At the same time, it helps investors to diversify their investment portfolios to a great extent.

Conclusion
Cryptocurrency is all set to be the future, but nothing can be confirmed or confidently stated about the same. As crypto is a relatively new concept, many are not aware of it. Thus, it is quite natural for them to be skeptical regarding investment in cryptocurrency. However, the reasons mentioned above will enable people to understand the concept deeply and possibly change their minds within a short span of time. With the evolution of new trends like non-fungible tokens, decentralized finance, and cryptocurrency exchange platform, the future looks pretty bright for cryptocurrencies.