Unless you haven’t paid attention to any of the news, you already know how widespread the use of cryptocurrency is. The total market value reached over $1 trillion, which means tech enthusiasts aren’t the only people investing anymore.
But cryptocurrency is still a risky investment. You can’t predict the price from one day to the next, so it’s intimidating for a new investor to take the risk.
Are you considering investing in cryptocurrency and not sure if it’s worth the money? Read the guide below to learn the benefits of cryptocurrency.
No, you won’t need to wait long to send money if you have cash or credit. Hand over your payment method, and you’ll pay the money and walk out with a product.
But things are different when you need to spend larger amounts and can’t use cash or credit to make payments. You’ll probably use bank and wire transfers to make the payment in those cases.
Depending on the bank and location of the recipient, you may wait days or weeks for your transaction to go through. This is a big problem if you need to send money quickly.
Those wait times don’t exist when you use cryptocurrency. In many cases, your funds make it through within a few minutes. If there is a lot of congestion on the network, it may take a little longer.
It doesn’t matter what bank account the other person has, either. All they need is a cryptocurrency wallet address with the type of coins you’re sending, and you can send them money.
From there, you can withdraw the money to an exchange and deposit it to your bank account or withdraw it with another method. Some locations even accept cryptocurrency for payments, which means using the money is even easier.
Another big problem with sending money with banks is the paperwork. You have several forms to fill out, need to work with bank employees, and more. That’s a lot of work to send money, especially if you don’t have much to send.
Those hurdles don’t exist when you send money with cryptocurrency. There is no third party you must go through to send your funds.
For most people, this means getting someone’s wallet address. If you have a private wallet, you’ll need to go to the send screen, enter the wallet address, and click send.
The process is very similar if you have your funds on a cryptocurrency exchange. Most platforms have a place in the account section that shows your holdings and allow you to send to another cryptocurrency wallet address.
One of the great things about cryptocurrency is its security. You don’t rely on a bank account or another service to hold onto your money. You have a private wallet with keys to access everything.
This means it’s on you to keep things safe. Nobody can access what you own if you don’t give away your private keys.
Private wallets also make transactions between two people secure. Everything has encryption on the blockchain network, and as long as the transaction is validated, it will go through without a problem. When using traditional financial institutions, you never know who is looking at your transactions.
You have less security if you don’t have private wallets and hold your funds on cryptocurrency exchanges. However, if you play by their rules and don’t use insecure trading platforms, you’ll probably remain safe with your funds there.
Just be sure not to store everything you own on one platform. Only keep funds accessible there that you plan to use.
Many people are becoming discontent with the current financial system. A few companies control how the financial world works, and there isn’t much that individuals can do about it.
Those companies control all the infrastructure, so they make all the rules.
The same isn’t true with cryptocurrency. There isn’t one owner of a cryptocurrency’s infrastructure. The work gets spread to staking and mining servers validating crypto transactions.
This means that if one part of the system fails, it doesn’t take everything down. On top of that, changes to the system are voted on by members who have a stake in its future.
These features make crypto a decentralized system that gives more power to people who take part in it. You don’t have to submit to whatever rules the governing body imposes on you.
Outside of using cryptocurrency to make transactions, you can also hold onto your crypto assets for extended periods. The asset price isn’t tied to normal currency, which means prices can fluctuate up and down.
This makes crypto an asset you can buy as an investment to make money. Many people purchase several forms of crypto to diversify their asset portfolios and take advantage of price increases.
The most common form of asset investment people do is the buy-and-hold strategy. Historically, prices have gone up over time in the crypto space. Even if there are bigger crashes every few years, prices typically rebound after some time.
On top of established cryptocurrencies like Bitcoin and Ethereum, countless new cryptocurrency projects are launched yearly. Many projects won’t go anywhere, but some will have great use cases.
These are the assets to look for. If you find the right cryptocurrency when it starts, you can make a lot of profit when people discover it, and the price goes up.
Swap Between Currencies
It’s not easy for people to swap between normal currencies. They have to go to an exchange, deposit their money, and wait to get the requested currency.
The same isn’t true when you buy cryptocurrency. Yes, you’ll still need to use an exchange. But there are large markets that allow you to swap for another cryptocurrency coin quickly and just as quickly move it to a private wallet.
This flexibility allows you to take advantage of new opportunities in the market. You can send your coins to a new exchange and buy into a new cryptocurrency market.
If you decide to work with a decentralized exchange, you can also participate in liquidity pools. These pools use other cryptocurrency users to help make swaps for people. Since the liquidity pool gets a transaction fee for making the swap, the cryptocurrency holders get a portion of the fee.
This can act as passive earnings for people who leave their holdings in reputable liquidity pools long term.
Earn Extra Currency
As mentioned above, you can earn cryptocurrency if you use it for certain things. In the above example, you can provide liquidity for two cryptocurrency coins. You’ll get a portion of the transaction fees.
But that isn’t your only option for earning.
One of the most popular ways to earn is to participate in staking pools. Many newer cryptocurrencies don’t use hardware mining for validating transactions. They use staking pools.
A staking pool allows currency holders to stake their coins on a server. The more holders a server has, the greater the chance a server has of getting a transaction to validate. Once your pool is chosen to validate a transaction, the fee gets split between the people staking their cryptocurrency.
There are a few companies that act as crypto banks. You deposit your cryptocurrency, and depending on which currency you deposit, you get interest payments on your earnings.
The amount you earn depends on the type of currency you hold and the company you use to hold your assets.
It’s no secret that inflation is a problem in the world today. In regular times, the currency gets devalued by a few percentage points every year. But over the past several years, the problem has gotten worse.
One of the crypto benefits you’ll see is that the value isn’t tied to inflation. Like other assets, such as gold, the value of cryptocurrency will rise and fall based on demand. Even if inflation plays a small part in the value, it doesn’t control it like other things.
On top of that, a limited amount of cryptocurrency will get put into circulation with many of the top cryptocurrencies.
Bitcoin, for instance, will continue getting mined until it reaches the last block. Once it gets to that point, individuals and companies won’t be able to mine Bitcoin anymore, and the amount of Bitcoin in circulation will never increase again.
This stops people from manipulating the currency by creating more whenever they run out. Doing this will help control inflation for cryptocurrency and help the price stabilize in the future.
One of the biggest problems with today’s market is that they close. If you want to make a trade after closing every day, you’re out of luck and need to wait until the next day. You can put in your order, but it won’t get filled until the market opens.
Markets don’t close in the cryptocurrency world. They operate every hour of the day and don’t close for holidays.
That means that you will never have problems making transactions or trades with cryptocurrency. As long as you have an internet connection, you can send currency to another person or log onto a trading website and put an order on the book.
This also adds flexibility to people who want to start trading more. If you have a day job and can’t trade at work, you can do it in your free time to level up your skills.
Sell to Your Local Currency
It wasn’t always easy to cash out of your cryptocurrency holdings. The current financial institutions didn’t know what to do about it, so many banks turned off access to their customers.
On top of that, spending whatever holdings you had was hard. That meant if you made a profit by holding a currency or trading, there was no way to use it.
The same isn’t true today.
There are now countless ways to cash out of your earnings. You can easily cash out to your bank account if you’re on a big cryptocurrency exchange. Some exchanges also offer debit cards that allow you to spend your holdings directly at stores.
Some cards even offer points and other rewards, so you’ll benefit more from spending.
If you want cash for your holdings, you can use a Bitcoin ATM. Send your holdings to an ATM account, and you’re ready to go. Find a local Bitcoin ATM like the one at this location, insert your card, and you’ll be able to withdraw your Bitcoin holdings for cash.
Invest in Technology
Many cryptocurrencies are mainly used for financial purposes. They’re used to store value and transfer funds.
However, not all cryptocurrencies are the same.
Many options offer unique use cases. You can find products offering everything from inventory tracking on blockchains to immutable election votes.
These are unique technologies that take advantage of the financial incentives offered by cryptocurrency. You have the chance to get in on the ground floor of these new tools and contribute to their success in the future.
The Benefits of Cryptocurrency Are Worth It
The risks of crypto put many people off from investing. It’s a speculative asset and doesn’t have a certain future. However, that doesn’t mean there aren’t many benefits of cryptocurrency that make it worth taking the chance.
Now that you understand the crypto advantages above, you’re better positioned to make an informed decision about investing in it. If you’re considering buying Bitcoin or another currency, start looking for a cryptocurrency guide to help you find and deposit money into a trading platform.
Of course, cryptocurrency isn’t the only thing you should invest in if you want to put your money to work. Find more great financial guides by reading more posts on the blog.