Bitcoin is changing financial markets faster than we think
Bitcoin is already familiar to investors at least as a name, although not everyone knows exactly what it is and what you can do with it.
Bitcoin is a very valuable investment. One Bitcoin is worth enough to buy a Tesla.
This king of cryptocurrencies, enjoying a highly aggressive boom, has been stealing column space, including news, for the past couple of years. In fact, its fame and popularity have increased precisely because, in a very short period of time, its price has increased so enormously.
Bitcoin was first launched as a successful cryptocurrency amid the financial crisis in 2009, the first pushback by blockchain technology against centralised, undemocratic and closed financial markets. Since then, thousands of different types of cryptocurrencies have been created, and they are already taking over the financial services that colour our daily lives.
Although many people know what cryptocurrencies are in theory, fewer people understand that each cryptocurrency is a unique project. They cannot therefore be compared at all with fiat currencies, which are all intended to be instruments of exchange and trade.
As for cryptocurrencies, each has its own purpose, and they cannot all be used as payment currency, as, for example, Bitcoin can already be. What all the major cryptocurrencies have in common, however, is their ability to provide the market with excellent investment opportunities.
Many consumers are buying Bitcoin and waiting for its next price jump. Read Sijoitusrahastot.org -from the site how easy it is to buy Bitcoin. Cryptocurrencies allow money to grow at a significantly faster rate than those funds offered by the bank, which provide an investor with a large slice of the proceeds for the bank anyway.
Many who find it difficult to understand cryptocurrencies in theory, always ask, what can they be used for? Unfortunately, even this cannot be answered directly, because every cryptocurrency is a unique project.
However, they can be roughly divided into three categories: payment currencies, platforms or operating systems, and tokens. Bitcoin is a payment currency, meaning it can already be used to pay for purchases, for example, in online shopping.
Ethereum, on the other hand, provides a development platform for a wide range of smart contracts and distributed applications, making it very popular for DeFi projects (eng. Decentralized Finance is the home of decentralized finance protocols.
Tokens, on the other hand, refer to a cryptocurrency that cannot be paid for purchases, but operates in its own blockchain to secure various transactions, or to pay for transactions on that network. Since cryptocurrencies are such a complex phenomenon, let us consider a few practical examples.
What Can I use Bitcoin for?
Since Bitcoin is it's best known, authentic and original, and also it's most valuable cryptocurrency, let's use it as an example. At the outset, it is worth accepting the fact that Bitcoin is already more widely used in our financial markets than we even know.
While governments and central banks around the world are still warning of the dangers of cryptocurrencies, they themselves have played a big role in aiding Bitcoin's rapid rise. For example, a large proportion of banks invest large sums in cryptocurrencies, while warning their customers to stay away from them.
Because Bitcoin has grown into such a valuable and influential cryptocurrency, its introduction to the market has long since begun. At the grassroots level, that is, in our everyday lives, Bitcoin functions as a traditional payment currency, but it has no physical form. However, this does not make it difficult to use it in any way.
In fact, Bitcoin can already be used to pay with a card in exactly the same way as when paying with a debit card. However, this requires the brick-and-mortar stores in question to have updated their payment terminals to the latest versions that accept cryptocurrencies. Visa, for example, already offers consumers Bitcoin credit cards. All it takes to implement them is for the consumer to have Bitcoin.
In Finland, it is still impossible to pay with Bitcoin in stores, but in many online shops, for example, you can already pay with cryptocurrency. In fact, Finland would have some catching up to do here, as in El Salvador, for example, Bitcoin has already been declared the country's official currency, and Sweden and Estonia are already well advanced in the development of their own cryptocurrencies.
In addition, in many developing countries, such as Africa, consumers prefer to use Bitcoin for day-to-day financial transactions rather than the local currency, which is often worth nothing. And then there's the chapter itself, which is countries that have outlawed all cryptocurrencies but are developing their own at the same time. China is one of these busybodies.
Bitcoin's progress in the financial markets is unlikely to be hindered by anything, so now would be a good time to get acquainted with these new era currencies, as they really become part of our daily lives.
Everything you need to know about cryptocurrencies
To get the investor ready for the day when cryptocurrencies become the new normal, let's quickly go over a few basic facts about them. When an investor understands these things, he is already very strong when someone asks about something related to crypts:
How do cryptocurrencies work?
How each cryptocurrency works, and which of them can be used for, largely depends on the type of blockchain that underpins them. Depending on the blockchain, cryptocurrencies can be used as payment currencies, to validate transactions in blockchains, or for staking, which is the blockchain version of interest accrual using cryptocurrencies.
How do you know which cryptocurrencies to invest in?
Since each cryptocurrency is a project of its own and cannot be compared to the next cryptocurrency as such, their values are made up of very different factors than the value of fiat currencies. The value of cryptocurrencies depends on market forces, i.e. the balance between supply and demand, the increase in their use and their popularity.
When investing in cryptocurrencies, you should get to know one cryptocurrency properly and consider whether there is a long-term demand and growth potential for the purpose it offers. For example, if an investor believes that a cryptocurrency could benefit companies in the future, it can be a good investment.
How is the economic situation affecting cryptocurrencies?
Cryptocurrencies are a completely separate factor from traditional financial markets, as they are decentralised systems. The traditional economy, on the other hand, is completely centralised and dependent on regulation for which a very small number of people are responsible. In fact, cryptocurrencies have already been proven several times to hold their value better than gold when the economy is doing badly. So as the economy falters, cryptocurrencies rise.
Are cryptocurrencies a good investment?
This can only be answered by the investor himself. However, many Bitcoin millionaires would surely answer the question in the affirmative. You should always get to know the cryptocurrency that the investor is about to invest in properly to understand if it is worth investing in. It's never worth investing just for hype.