Cryptocurrency - What's the fuss about? - 2/20/2022
Updated: Jul 29, 2022
Cryptocurrency (for example Bitcoin, Dogecoin, and many others) is a digital currency that has value fluctuation. I'm not sure if it would be more accurate to compare it to foreign currency (with variable exchange rate) or to investing in a stock (in a non-existent company).
Cryptocurrency was supposedly created to allow people to decentralize their money and not have to rely on banks or other financial institutions to hold onto their money. It was also intended to allow people to exchange money without all the third party participation and fees that come with government or financial institution involvement.
There are, to my mind, 2 ways to look at cryptocurrency - it is either to be used as a currency to buy or sell as you would any other money or it is an investment that you hope to buy low and eventually sell for more money than you originally paid for it.
Cryptocurrency has not reached currency status yet, which would require enough people and businesses to accept it as payment for transactions. This may be difficult to reach as the value keeps shifting.
As far as using cryptocurrency as an investment, it is a high risk investment. Cryptocurrency is an emerging area that is becoming popular however it is not regulated. Currently, there is no accountability or recourse action like there would be with mutual funds, stocks, or any other variable security. Nothing wrong with making a high risk investment, but understand what you are investing in before you give anyone your money.
Like any investment, do your research and only work with trusted professional financial advisors.
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