In 2009, the phenomenon of Bitcoin hit the scene, and the future potential of cryptocurrency was born. In the early days, cryptocurrency wasn’t seen as much of an investment, partially because many people didn’t know how to invest and many more had no idea what the true potential for accumulating wealth could be.
Fast forward to today, Bitcoin is the standard-bearer of cryptocurrency, and hundreds more cryptocurrencies have been developed, and some have even flourished while others disappeared.
As investors and speculators utilise and trade in cryptocurrency more and more, they see it as an alternative global currency that may replace fiat currencies like the Dollar and the Euro in the future. However, the cryptocurrency industry is still in its infancy, but as crypto-assets increase in price, more people flock to the industry looking to make money. So, what’s the secret to making money with cryptocurrency?
Cryptocurrency is based on a chain of information, registration, and distribution called a blockchain. The information is not controlled by any financial institutions. Instead, it serves as a record of digital transactions, independent of central banks. Simply stated, this means that many people hold a decentralized and inimitable record of every transaction that takes place in the blockchain system.
The blockchain tracks assets, asset ownership, and enables secure and nearly instant transactions. There are many more technical details, but unless you’re ready to dive deep into the technology rabbit hole, you really only need the basics to get started.
Cryptocurrency and blockchain technology merely eliminate the middleman, such as a bank or treasury, and allows buyers and sellers to make financial transactions directly between each other. It also lowers or even eliminates transaction fees, making cryptocurrency highly attractive to investors.
The Future Of Finance
There are thousands of cryptocurrencies in the market today. With so many options, it’s hard to know what investment is suitable for you. Currently, the highest valued and most well-known cryptocurrency is Bitcoin. It has been the most prominent and well-known cryptocurrency since its creation in 2009.
Coming in second is Ethereum. Both Bitcoin and Ethereum are two of the most traded and reliably valuable cryptocurrencies in the market today. There are other popular cryptocurrencies that have made waves in the past few years, like Dogecoin, Litecoin, and Stellar, and most can be purchased at considerably lower prices than Bitcoin and Ethereum.
However, given the volatility of the crypto market, many smaller cryptocurrencies fail, and their investments disappear along with them. Today, we will discuss three elements of the crypto world that are less well-known than standard crypto currencies themselves, but are shaping up to be major profit-generators for investors in the years to come.
If you’re looking to invest in cryptocurrency but aren’t ready to take on the full volatility of the market, you may want to look into Stablecoins. These digital currencies are linked to an existing asset like a national currency or precious metal like gold or silver. There are three types of stablecoin, fiat-backed, cryptocurrency-backed, and commodity-backed.
Fiat-backed are cryptocurrencies tied to a national currency like the Dollar. Cryptocurrency-backed is a decentralised stablecoin, meaning that a network like Ethereum backs and stabilises the currency’s value. Lastly, commodity-backed cryptocurrency is backed by precious metals like gold or silver. While each carries some market volatility, being backed by a market helps decrease the risk and exposure to the ups and downs of the crypto market.
Decentralised finance or DeFi is not a cryptocurrency, but is an umbrella term for a variety of financial applications in cryptocurrency or blockchain geared toward disrupting financial intermediaries made possible by Ethereum’s blockchain network. The primary function for DeFi is in lending and trading, but DeFi extends beyond those functions.
DeFi provides long-term platforms with high potential, and it’s essential to know that if a token provides high returns for doing nothing, also called frictionless yield farming, it’s likely a poor investment with little long-term potential. Ideally, you want to purchase DeFi tokens that have high liquidity and large amounts of cryptocurrency on the platform.
Non-fungible tokens, or NFTs, are one-of-a-kind digital assets. Non-fungible means that the asset is unique and exclusive, not found elsewhere on any digital market. However, where cryptocurrencies like Bitcoin are fungible (meaning they are replaceable with other cryptocurrencies), NFTs are not. Think of a fine art collector purchasing a Van Gogh but rather than a physical painting, they own the rights to the piece in digital form.
Aus Merchant Helps You Navigate The Future Of Finance
Deciding to invest in the world of cryptocurrency can be a daunting endeavor, but it isn’t impossible. Investing in cryptocurrency is a way to keep your money your own without governmental regulation.
As a digital currency merchant, Aus Merchant specialises in connecting a network of liquidity providers and high volume exchanges with a sophisticated wallet security system. Trade and access investment opportunities directly from your secure wallet.
Contact us today and speak with one of our brokers to customise a trading system just for you.