Chinarainbow.org – Cryptocurrency or crypto asset is an investment instrument that is now popular among investors. Basically, cryptocurrency is a digital asset that utilizes block-chain technology or blockchain.
The security of these assets is protected by cryptography. Cryptography or cryptography is a secure and confidential communication process.
That is, the content of the message can only be known by the sender and recipient. Cryptography plays a role in ensuring that a digital asset cannot be faked. This process also ensures that a transaction does not occur repeatedly (double-spend).
Most crypto assets, such as Bitcoin, are a set of decentralized networks based on blockchain technology. Thus, crypto assets are not created by one central authority, for example a central bank.
Therefore, crypto assets are considered safer and less affected by government intervention or political conditions when compared to other investment assets.
Why are investors interested in investing in crypto assets? As the foundation of crypto assets, blockchain can be utilized to develop more advanced technologies in a number of industrial sectors, such as finance, health, telecommunications, and transportation. Blockchain allows a financial transaction or business process to occur without an intermediary.
To execute a business, the transaction relies solely on a network of several secure computers. Because there are not many parties involved, the process becomes more efficient and safe.
As an illustration, you need an intermediary when sending money to others. This is not the case with blockchain technology. The reason is, this technology allows you to send digital assets to friends without going through the middleman. This is seen as an attractive investment opportunity.
A number of investors believe that blockchain and digital assets have a wide space of exploration. For them, investing funds in crypto assets is one way to get high profits, while supporting the development of these technologies in the future. Unlimited potential in limited quantities Some crypto assets, such as Bitcoin, have limited availability.
To note, the total available Bitcoin reaches 21 million. As of January 2022, 18.92 million of them have been traded. See Photo Illustration of bitcoin, crypto assets, cryptocurrencies. (PEXELS/WORLDSPECTRUM) By knowing the amount of Bitcoin left, investors will find it easier to calculate the time Bitcoin will run out.
In addition, investors can also see the prospects or changes in the price of Bitcoin in the future. For example, if the number of Bitcoins becomes scarcer, but the number of enthusiasts increases, the value of Bitcoin will increase. This is seen in the price graph of cryptocurrencies, such as Bitcoin and Ethereum, which have increased in recent years. Because of this condition, investors also assess that crypto assets are profitable, especially in the long run.
However, like other investment instruments, crypto assets also have a number of risks. Before starting to invest, potential investors must study the opportunities and risks of this investment in detail so that they can be wiser in investing. One of the risks in investing in crypto assets, such as Bitcoin, is that it is more volatile than other types of investments. That is, the price of Bitcoin and other crypto assets can decline rapidly.
Therefore, potential investors need to be vigilant and not easily panic when these conditions occur. There are two ways to get crypto assets, namely mining and exchange platforms.
In mining, potential investors need technical knowledge and computer devices with certain specifications.
Potential investors also need to use these computer devices continuously to mine crypto assets. This requires a large amount of electricity consumption. Therefore, a number of environmental activists are calling on crypto developers to change the method to be more energy efficient.
Meanwhile, exchange platforms are a method that tends to be easier because it can be accessed through a mobile application or website. Potential investors can buy digital assets denominated in rupiah or US dollars.