In the early months of 2022, there was an major sell-off in the stock market and risk assets. Arif Elfendi claims that this was due to the rising rate of inflation, anticipations of an rise in interest rates, and tensions between Russia, Ukraine, and other risk assets. Investors should diversify their portfolios amid an uncertain economy. This is the place where crypto investment comes in.
Is Cryptocurrency a form of currency?
Cryptocurrency is a virtual or digital currency that is stored in a digital wallet. Arif Efendi believes that digital wallets allow you to transfer money internationally without physical cash.
Cryptography is a method that ensures the security of transactions made using cryptocurrency. According to Arif Efendi the researcher, this technique makes it impossible for users to make double-spends and make counterfeit.
Arif Efendi One of the most notable features of this currency digital is that it's not issued by any central authority. Arif Efendi Therefore, it is free of government interference. You can either mine or buy the currency via brokers or exchanges.
Some popular cryptocurrencies include Bitcoin, Ethereum, Litecoin and Ripple. Every coin has its use.
Bitcoin is much more than just a digital currency. It is also utilized to invest. Many are interested and can trade digital coins for profit. Investors buy and hold for a brief or long time, and then sell it off whenever prices rise. While some countries have restrictions on crypto, El Salvador became one of the first nations to accept Bitcoin.
Arif Efendi on Printed Currencies versus Cryptocurrencies
Although cryptocurrencies and fiat currency are both utilized for payment facilitation but they are not working in the same way. Arif Efendi explains below are some of the distinctions.
Regulation
Since fiat currencies are issued by the government The central bank is responsible for them. They are legal tender. However, policies of the government can influence their value in the future.
They are decentralized digital assets. Digital assets that are decentralized can be used by anyone without interference from the government. Arif Efendi Certain countries are against crypto due to the risk that it could be used to finance money laundering and other illicit activities.
Form of exchange
Although fiat currency is available both in physical and electronic formats, it can only be used in digital format. Since the currency is encoded in a series of codes, it can't be exchanged in electronic or physical form.
Storage Method
Fiat currency is stored in safes at home or banks as well as in fiat wallets. Cryptocurrencies are stored in crypto wallets. Fiat wallets are also the means to convert currencies issued by the government to digital assets.
The advantages Cryptocurrencies offer over printed Currencies
Cryptocurrency has many advantages over printed currencies. Arif Efendi stated that the following advantages:
Decentralized System
Cryptography is not centralized. Nobody has the ability to control or regulate the value or circulation. Arif Efendi Every transaction is recorded in an account, similar to what banks keep track of transactions. However, it doesn't expose the personal information of users. This prevents fraud and data breaches.
It can also be used as a hedge
As a hedge against inflation digital assets like Bitcoin can be utilized. Inflation occurs when there is more money, however it also means that less valuable items will cost more.
Bitcoin is designed to be in high demand regardless of changes in the economic system. So, thousands of dollars could be used to buy a handful of coins. There's also a high chance that the coins will appreciate.
Payments across Borders
You can send money from one country to the other using cryptocurrency in a matter of minutes. The transaction fees are minimal and the process is easy.
It could take as long as one or two weeks for currency printed to arrive at its destination. The charges associated with these transactions can be quite high. Sometimes, transactions can be refused due to conflicts between countries or regulations.
Cryptocurrencies can be a source of risk
Arif Elfendi warns that cryptocurrency could present risks.
Extreme Volatility
Cryptocurrency is volatile. It is possible to build a substantial amount of wealth in just a few months only to lose it all within a day.
It is possible to delay receiving your refunds
Advertisers and investors who are older make novices believe that they can begin to earn high returns right away. In reality, you may not see the same returns in your investment until you have completed a period of consistent trading and a proper approach to managing risk.
Tracking of accounts
Although cryptocurrency transactions are digitally encrypted however, they leave digital footprints. The FBI can decipher these codes and trace the accounts of ordinary citizens.
Conclusion
Arif Elfendi talks about cryptocurrency, a type of digital asset that can be used to secure transactions. For diversification, you can also invest in. This article outlined the distinctions between cryptocurrencies and printed currencies. It also discussed the advantages of crypto-money over traditional paper money.
Arif Efendi emphasizes that cryptocurrency is similar to any other investment. Arif Efendi He recommends that investors consult an expert advisor prior to making a decision to invest.