Professional Documents
Culture Documents
Vaibhav SinghDolor
, EKfuc-19 , 20180045
Cryptocurrencies appeal to their supporters for a variety of reasons. Here are some of the most popular:
• Supporters see cryptocurrencies such as Bitcoin as the currency of the future and are racing to buy them now,
presumably before they become more valuable
• Some supporters like the fact that cryptocurrency removes central banks from managing the money supply, since over
time these banks tend to reduce the value of money via inflation
• Other supporters like the technology behind cryptocurrencies, the blockchain, because it’s a decentralised processing
and recording system and can be more secure than traditional payment systems
• Some speculators like cryptocurrencies because they’re going up in value and have no interest in the currencies’ long-
term acceptance as a way to move money
Cryptocurrencies as investment.!
Cryptocurrencies may go up in value, but many investors see them as mere speculations, not real
investments. The reason? Just like real currencies, cryptocurrencies generate no cash flow, so for you to
profit, someone has to pay more for the currency than you did.
That’s what’s called “the greater fool” theory of investment. Contrast that to a well-managed business, which
increases its value over time by growing the profitability and cash flow of the operation.
Buying cryptocurrency
While some cryptocurrencies, including Bitcoin, are available for purchase with U.S.
dollars, others require that you pay with bitcoins or another cryptocurrency.
To buy cryptocurrencies, you’ll need a “wallet,” an online app that can hold your
currency. Generally, you create an account on an exchange, and then you can transfer
real money to buy cryptocurrencies such as Bitcoin or Ethereum.
Legality of crypto.
There’s no question that they’re legal in the United States, though China
has essentially banned their use, and ultimately whether they’re legal
depends on each individual country. Also be sure to consider how to
protect yourself from fraudsters who see cryptocurrencies as an
opportunity to bilk investors. As always, buyer beware.
Should you buy cryptocurrency?
Cryptocurrency is an incredibly speculative and volatile buy.
Stock trading of established companies is generally less risky than
investing in cryptocurrencies such as Bitcoin.
Summary & Takeaways
Thank You.!