Cryptocurrency is a very unique financial field. And many, first of all, do not understand what special properties it hides in itself and what makes it so popular and investment attractive. In this article, Margarita Cailleau, a specialist at the VK Web digital marketing agency, told what are the main distinguishing features of cryptocurrencies that attract new investors to them.
Cryptocurrency, like any other type of financial asset, is an investment tool. However, due to its specific features, it can be difficult for many novice investors to understand the very essence of the financial attractiveness of digital assets. Let’s see if a cryptocurrency is a profitable investment by looking at four unique features of all digital assets.
The first and probably the most critical distinguishing feature of all classical cryptocurrencies such as bitcoin or ethereum is decentralization. In simple terms, this means separation.
Such cryptocurrencies do not have any single center from which they are controlled by a limited circle of people. That is why cryptocurrency does not depend on anyone.
The efficiency of the blockchain in which this or that cryptocurrency functions is supported by miners. These are computers that support the operation of the blockchain and receive the network’s cryptocurrency as a reward for this. All miners are scattered around the world. Millions of individual computers manage the blockchain at once, and, accordingly, the cryptocurrency from various parts of the world. All of them are independent of each other and make decisions together – collegially.
This is not the same as, for instance, classic banks that are managed by a specific board of directors. It is they who control all deposits and, if desired, are able to take them away. This will never happen with cryptocurrencies. It is decentralized and uncontrolled – and this is its main plus for any investor. After all, its safety depends on you, and the course of development will always go only up.
Anonymity and transparency
Without exception, all cryptocurrencies have two opposite and extremely important properties: anonymity and transparency.
Transparency means that any user can go to a special site – a blockchain explorer and check any transaction (transfer of funds) within the network. It is enough to have the required wallet ID or transaction number with you. As a result, you will be able to see which address to whom and how much cryptocurrency was transferred. So, for example, you have an opportunity to monitor any wallets.
Moreover, all these wallets are anonymous. This is, first of all, a set of numbers and letters, and no one will just find out which person or organization is hiding behind a particular address. That is why this property is convenient for many investors. In an age of openness, many are eager to have more anonymity for themselves and their funds. Therefore, first of all, pay attention to cryptocurrency.
The transparency of the blockchain is good as you are able to check and make sure that the transfer of funds is correct. Or, for example, to seek out scammers.
These important properties, first of all, give confidence that the cryptocurrency will be relevant in the coming years. This means that you can start investing in it, the main thing is to be very careful, since this is an extremely dangerous type of income. However, these properties are not all the positive features of cryptocurrencies. Including, several important points will be discussed in the following article.
One of the most important distinguishing features of cryptocurrency is cross-border. This literally means that digital assets have no boundaries. At its core, the cryptocurrency is somewhat reminiscent of, for instance, the dollar (but not another fiat currency). People use the dollar in many countries of the world. In many but not all.
If you needed, for example, to send funds from Germany to Canada, the UK, or the USA, then this process will take a lot of time, effort, nerves, as well as money. After all, the conversion, for example, from euros to rubles will take place through several banks in different countries. Including exchange for dollars.
This will not happen with cryptocurrencies. You just need to choose any cryptocurrency and network and send it to the recipient’s wallet. In a couple of minutes, the addressee will receive funds even at the North Pole. And, above all, it is very convenient. It is believed that the absence of borders when working with cryptocurrency is the most important factor, due to which many people switch to digital assets.
The main property of all cryptocurrencies is security.
This means that the blockchain network itself, on which all cryptocurrencies work, is designed very securely.
All cryptocurrencies are protected by special multiple data encryption. Fraudsters cannot bypass such protection and, for example, replace a transaction or break (turn off) the entire blockchain.
So far, not a single person has managed to hack and somehow seriously harm the blockchain of bitcoin, ethereum, or other major cryptocurrencies. Therefore, the very phenomenon of cryptocurrencies is associated with reliability and security for many.