According to revenue experts, the value of all cryptocurrencies across the globe has exceeded a whopping $3 trillion in 2022 – all thanks to its extraordinary significance and consumer demand in the international market. Today, cryptocurrency is viewed as one of the most profitable, and securest financial assets for investors all around the world.
Although most of us are well-aware of the significance of cryptocurrency in the foreign investment market, still have you ever wondered, “how does it work?” and, “what are the pros and cons associated with it?”
Well, let’s find out.
How Does Cryptocurrency Work?
A cryptocurrency can be defined as a type of digital currency that serves the same purpose as our physical money or cash, i.e. to serve as the medium of exchange between the buyer and supplier. However, unlike cash, cryptocurrency works via a high-end blockchain technology that enables it to record daily transactions in a ledger system. Although you can use cryptocurrency to pay for all types of services and goods, most people refer to it as a speculative investment asset, as it is intangible.
Interestingly, cryptocurrency cannot be controlled and changed in any way by the investors – they can only view it. This is the major reason why cryptocurrency is said to be the securest, and safest medium for online transactions in 2022.
Just like many other types of currencies in the world, cryptocurrency’s value is also determined by its demand in the market. However, as crypto is not backed up by any legal state authorities or central banks, its rate is never affected by any sort of monetary policies, inflation rates, or economic crisis.
Now, before we get into more details, let’s take a look at its major pros and cons for the current year.
Pros of Cryptocurrency
- Higher Rewards in Peak Seasons
Currently, there are over 10,000 types of cryptocurrencies in the market, and each one of them has a wide range of benefits to offer. From Ethereum and Bitcoin to Stellar and Cardano, the crypto market features an extraordinarily vast collection of currencies for global investors. But, no matter whichever type of cryptocurrency you opt for, one thing will always remain certain – the sudden lows, and spikes in crypto’s value.
Interestingly, cryptocurrency observes a gigantic amount of profit in its peak growing seasons. This allows the investors to enjoy a whopping amount of profit on their investments, especially if they have been in the business for a long. For example, most experienced investors have clear know-how of which seasons are ideal for crypto investments.
In most cases, the investors rely on their market rates that are driven by the coin supply and miners, along with their demand from the purchaser’s end. For example, Ethereum has observed a huge spike in rates from July 2021 to December 2021 – it has almost doubled within six months only. Well, that seems like a fancy payday for crypto investors that got boarded at the right time! Isn’t it?
- Increased Security
As we mentioned earlier, cryptocurrency uses high-end blockchain technology to record and keep a track of your overall financial transactions. Each block in the crypto chain is locked via a specific algorithm to add an extra layer of safety to your online crypto accounts. It helps to prevent unauthorized access to your crypto account, and protects your financial details from all sorts of phishing, hacking, and scamming attempts.
For maximum security, your cryptocurrency is locked via exclusive hash algorithms which ensure that your financial details are never altered or replaced in any way by third parties. Although crypto developers claim that hash algorithms provide high-end security to your crypto data around the clock, you still need to keep an eye on your account.
One of the best security measures is to connect to a secure, and safe internet connection like RCN Internet while using crypto – it will protect your account from all types of online scams and malware while browsing.
The best part is that RCN Internet offers extremely economical internet plans to all users. Its monthly subscription plans are starting from as low as $25.99 only. Isn’t that amazing?
- 24/7 Trading
Another significant advantage of crypto is that the international market is always open – it trades around the clock, 24/7. So, with crypto transactions being carried out all the time, you certainly don’t need to wait for other exchange companies like NYSE or NASDAQ to start your trading for the day. Instead, you can get your hands on it whenever you want.
Surprisingly, crypto’s 24/7 trading has made a significant impact on other stock exchange markets as well. For example, in 2022, tons of other trading agencies have also started finding ways to trade stocks outside regular work hours – it provides them with a noticeable increase in their overall profit rates.
- Increased Transparency
Let’s admit it, most of our financial agencies like commercial banks, brokerage firms, and insurance companies revolve around third-party intermediaries to process everyday transactions. This certainly indicates that whenever you make a financial transaction, your confidential information goes to at least ‘one’ of these intermediaries. As a result, you have no other choice but to trust them to maintain the overall transparency and confidentiality of your financial data.
But thankfully, that’s not the case with cryptocurrency – it offers a high-end alternative to provide a fair, and transparent transaction system to the investors. For example, the blockchain tech of crypto allows the users to view the financial market, total investment, and transaction history from any part of the world, with no intermediaries whatsoever.
So, although the crypto value can be viewed by any investor on the portal, they cannot alter or replace the data in any way – it remains just the same for all the investors around the world.
Cons of Cryptocurrency
Apart from all the pros, there is a wide range of cons associated with cryptocurrency as well. Below, we have come up with the most crucial ones for 2022 – let’s take a look!
- Long-Term Investment
The history of cryptocurrency stretches back to 2008. Although it enjoys a gigantic revenue of $3 trillion at the moment, still it’s worth remembering that crypto has been around for over a decade only. Whereas, on the contrary, tons of other investment options like the Stock Exchange have a strong history that can look up to decades/centuries.
For instance, the history of The London Stock Exchange dates back to 1801, which makes it one of the securest and most reliable options for long-term investments. However, if you compare cryptocurrency to it, you will notice how this time span of fourteen years is almost close to nothing. Therefore, nobody really knows what the future holds for crypto investors.
In other words, one needs to be strong enough to step into these uncharted waters as a crypto investor, especially if you are planning to invest a huge sum of money.
- Takes Time and Effort
Although we all have heard thousands of stories about the life-changing experiences and tons of money being made in the crypto space, still one thing is for sure – it isn’t as easy as it sounds. Crypto takes a lot of time, energy, and effort for beginners to understand how it works, especially if you are not much of a digital freak.
For instance, cryptocurrency features complicated blockchain tech and tons of online risks such as scams, malware, or even bugs, which can be a big problem for newbies specifically. Therefore, we recommend you conduct detailed research on the risks of cryptocurrency before investing your savings into the business.
- Scalability Issues
It wouldn’t be wrong to say that cryptocurrency operates at lightning speeds. Most of the time, it carries out the transactions blazingly fast, regardless of the time or location. But, sometimes, crypto also runs into some major issues which create hindrances in rolling the currency out on large scales.
Interestingly, the developers also acknowledge and admit the issue, along with a wide range of Ethereum investors who firmly believe that the crypto blockchain has reached “certain capacity limitations” for Ethereum rollouts.
So, it would be fair for us to say that cryptocurrency sometimes takes longer processing speeds than many other currencies on the market. It not only creates scalability issues but also brings uninvited stress to the investors’ lives.
In a Nutshell
At the same time when cryptocurrency is said to be one of the most profitable businesses ever, it has a wide range of risks associated with it too. It can either make you a millionaire within a blink of an eye or make you lose it all within seconds. Therefore, we recommend you search about all its pros and cons in detail before stepping into the crypto business.
Finally, please remember that you cannot access crypto without having stable internet connectivity at home. So, just make sure you connect to a fast and high-coverage internet connection like RCN to enjoy the ultimate, lag-free crypto experience around the clock.