What is Crypto Currency?

Is it safe to Invest in Bitcoins and other Digital Currencies?

(This is a mere guide based on my Opinion on Cyber Investing)

Wikipedia defines Bitcoin as a worldwide cyber currency and digital payment system. Bitcoin are decentralized in nature, its system works without a central repository or single administrator. Bitcoin was released as an open-source software in 2009. The Bitcoin system is peer-to-peer in nature, and transactions take place between users directly, without an intermediary. These transactions are verified by network nodes and recorded in public through a cyber ledger called a blockchain. Bitcoin can be exchanged for other currencies, products, and services. As of 2015, over 100,000 merchants and vendors accepted bitcoin as payment. Apart from being a transactional currency, Bitcoin can also be held as an Investment. According to research produced by Cambridge University in 2017, there are close to 5 million unique users using cryptocurrency wallet, most of them using bitcoin. Total cyber currency being circulated in the cyberspace today is estimated to be at $150 Billion.

Now that we know what It is, let us likewise dissect what it is not. Bitcoin are Unregulated and Ungoverned. Meaning there are no Central Banks around the world regulating any of its transactions; Second, Bitcoin does not have a country of origin, so No law governs it (Countries varies laws regarding Crypto currencies). Third, unlike the dollar, euros and other currencies, there is no underlying Gold or any other Currencies backing up the value of Bitcoin or any other Crypto currencies. Fourth, there is no Regulated and Open Market Legal Exchange for Bitcoin, unlike the stock or bond markets of every country, Bitcoin value are determined in cyber space. As there is no exchange nor law regarding Bitcoin, the value is either driven by market forces or by price manipulations. Fifth, the safety nets of Bitcoin and other crypto currencies are not yet proven. It is a fact that when you lose your password (i.e. when you accidentally erase your files or your computer/cellphone crashes), you lose your Cyber wallet too. Meaning your lifetime savings gone in 60 seconds. Sixth, Bitcoin is still prone to hacking or Cyber stealing. Seventh, once there is a problem with your Bitcoin, there is no company that can offer services to solve nor hear your complaints.

My Personal Conclusion

As the world moves to a cashless society, will bitcoin or other forms of crypto currencies be the answer? Or will the global financial world finally catch up and create their own regulated version of crypto or even digital currency? This is the question I have to wait and see in the future. But 10 or 15 years in the future, these digital currencies will be the new status quo and new order.

In china, 500 million people are already practicing cashless and script-less society today. It is a trend now that some Chinese are just bringing their cellphone and scanning its bar codes to pay everything that they physically buy. Although this cashless society is an example of digital currency and not cyber currency, as the bar codes are connected directly to their bank accounts and are debited in real time against their accounts.

As we measure Bitcoin and other cyber currencies, the usage of Bitcoin will be compressed into two objectives: 1) As a peer to peer transaction based cyber currency And/or; 2) As a tradeable investment instrument. But whatever your objective is, users of these cyber currencies must always be wary of the various risks versus the rewards it gives. High Risks is always equivalent to High Rewards and Low Risk to Low Rewards. In the end, it is your appetite and degree of risk versus reward you can take which should answer this and from there you decide on what investment to take.

As for me, I would just wait until these cyber currencies will be accepted and flow into our mainstream financial market of each and every country in the world. But rest assure that the world and its regulators will very soon catch up and create one or several solid cyber currency/ies, whether it would be bitcoin or the other cyber currencies available in the market now is what I have to wait and see for.

The world is changing by the day. Goodluck.