11 Things To Consider Before Investing In Cryptocurrency

Where cryptocurrencies were once the reserve of tech nerds, these days, they’ve become so mainstream that your parents might be considering investing.

This news might strike excitement into the hearts of diehard crypto fans, but it also means there’s a rise in people who want to get in on the “hype” and invest in cryptocurrency without truly understanding how they work.

Make sure you’re not one of them. I’ll outline 11 things that everyone should know before investing in Bitcoin and other cryptocurrencies.

1. They’re Based on Blockchain Technology

In a nutshell, blockchain is the infrastructure that supports cryptocurrencies. It’s also decentralized, therefore offering an alternative to the traditional, centralized financial institutions.

Instead of middlemen like banks ensuring our current and savings accounts remain secure, the blockchain forms an anonymous but public digital ledger of buys and sells — made up of blocks in a chain.

Fortunately, just like U.S dollars can be split into cents and British pounds can be divided into pennies, Bitcoin breaks down into units. The smallest of these is a Satoshi, worth 0.00000001 of one Bitcoin.

2. You can Break Them up into Smaller Pieces

Similar systems exist for other cryptocurrency options, too. So, despite the recent price gains in Bitcoin and others, ordinary folks are not ‘locked out’ and can still invest smaller amounts in the crypto market.

For an asset to be valuable, it must be scarce — or at least difficult to obtain. That’s why oil is worth more than dirt. It’s also (one of the reasons) why the government can’t just print as much money as it wants and hand it out to citizens.

3. There’s a Limited Supply

So, the makers of cryptocurrency had to recreate this feature in the digital world. If unlimited amounts of Bitcoin were available and ready for the taking, it would be hard to justify one single Bitcoin being worth thousands of U.S dollars.

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