About cryptocurrencies

This is my point of view to the emerging cryptocurrencies. Maybe everyone might ever heard about cryptocurrencies or talked about those. When people speak about cryptocurrencies, they usually talk about Bitcoin.

Information and news are very superficial, only a few people have profound knowledge about it. And there isn’t only Bitcoin – there are thousands of other cryptocurrencies out there. Some people also name cryptocurrencies Altcoins (Alternative Coins), usually these are the alternative Coins to Bitcoin.

The most important AltCoins are:

  • Ethereum
  • Dash
  • NEM
  • Monero
  • Ripple

Well, I must be honest – I’ve heard about Bitcoin for the first time in 2008. As I already wrote on my About me-page – unfortunately, I did not recognise the potential of Bitcoin at that time, so I stoppend my mining experiments and didn’t thought of investing in Bitcoin.

About cryptocurrencies

ADVANTAGES AND DISADVANTAGES OF CRYPTOCURRENCIES

Each medal has two sides – there are a lot of advantages and disadvantages in the crypto community:

Advantages

  1. Many cryptocurrencies are limited from the beginning and can’t be reproduced/mined easily.
  2. Market trend of cryptocurrencies will be affected by supply and demand, or by the costs of mining.
  3. At the moment transfers of cryptocurrencies are anonymous.
  4. The transfer of cryptocurrencies can be done directly from the sender to the recipient without a middleman (national banks, clearing houses, banks) – also transnational.
  5. Transfers from every place in the world to another can be done within some minutes up to a few hours, depending on the blockchain.
  6. Transactions costs are very low.
  7. The blockchain is public and absolutely transparent.
  8. Influences which will cause fluctuations of the market price are lower for cryptocurrencies than for conventional currencies.
  9. The value enhancement could be enormous.

Disadvantages

  1. High fluctuations are possible every day.
  2. The market has not been regulated so far.
  3. Everyone can create and offer his own cryptocurrency.
  4. Everyone is responsible for the security of his wallet. You can’t withdraw wrongly  transferred coins.
  5. Some cryptocurrencies disappeared after the operators had collected enough money by spreading the coins at the beginning – lots of people lost their “money”.

 

MY OPINION

After some facts above, I also want to add further ideas/reasons for investing in cryptocurrencies:

  1. Capital flight to cryptocurrencies: Political and economic challenges in more and more countries (e.g. China) influence the Bitcoin market price. Trust into US dollar our euro decreases also by wealthy families. Some people also disagree with the control of the national banks. Now the invested parts of their asset into cryptocurrencies.
  2. Zero interest rate: Globally, investors are looking for investment opportunities, because all common forms of saving do not leave any profits. The other way round, the market price of Bitcoin, Ripple, Litecoin and Etherium increased tremendously.
  3. Gold and other bullions are not the only crisis currencies: Prophets of the apocalypse have a preference to invest in gold or silver – the value always rises whenever economic turbulences coming up. Bitcoin now also offers them a great alternative save their lives from a zombie apocalypse or collapse of the banking system.
  4. Long-term value enhancement attracts the attention of more and more investors: Bitcoin in short-time view is a very volatile cryptocurrency. But in long-term view it seems that Bitcoin is moving forward to a very stable cryptocurrency. Gold, US dollar or euro will be more stable, but they will grow much slower.
  5. Knowledge about cryptocurrencies and blockchain is spreading slowly: Some investors recognised, that they only hat to learn some technical facts to understand cryptocurrencies. Numerous investors are working on the topic and a large number of developers are pushing forward technologies around blockchain.
  6. Number of crypto-millionairs rises: With the rising market prices of cryptocurrencies, also the number of people rises, which get rich with those. They also invest their profits into companies which deal with blockchain technologies to diversify their wealth. This will also drive the development and the ecosystem of cryptocurrencies.
  7. Bitcoin got official currency in some countries
  8. Political crises around the world push the value of Bitcoin

 

Thank you for reading this article – I’d like to suggest not to discuss the pros and cons about cryptocurrencies with me – please form your own opinion and decide about your future investments.