Nov 03, 2017  | Tags: Cryptocurrency, financial advice

Our Insights

If you’ve heard of Bitcoin, then you already know about at least one kind of cryptocurrency.

We live in a fast-changing society in terms of finances and technology and cryptocurrency appears to be the next big thing. Or is it?

What Is Cryptocurrency?

Also known as digital currency, cryptocurrency uses encryption, or code, to represent units of value that can be exchanged in online transactions. 

Several kinds of cryptocurrency include:

• Bitcoin
• Ethereum
• Litecoin
• Ripple

Blockchain technology allows for digital currency transactions to be recorded in a public ledger. Unlike mainstream forms of finance, the currency is not regulated by any central institution, government or individual.

A cryptocurrency bank account is not owned by any banking institution. It’s your property with a public address. The digital money can be sent to your virtual wallet much in the way someone can send an email to your email address.

Why Cryptocurrency Is on the Rise 

The public was introduced to Bitcoin, the first digital currency, when it was released in 2009. Fast-forward to 2015, and there were some 500 other options for cryptocurrency. By last count in September 2017, more than 1,100 cryptocurrency names had found their way onto the scene, totalling more than $60 billion in total market capital (at the time of writing).

Our world is becoming increasingly more digital and the facts show that currency is not to be left behind. 

Some of the key reasons why people are investing in cryptocurrency: 

• It is universally accepted
• Accessible by anyone
• Protected against identity theft
• Avoid transaction fees
• Can’t be counterfeited
• Reduces settlement time

The Potential of Cryptocurrency

Cryptocurrency certainly has a lot of potential, but the first obstacle is raising awareness. Until more people are familiar and comfortable with cryptocurrencies like Bitcoin, and digital currencies gain more crediibility, they will keep on using banking and credit cards for online purchases.

Some believe that eventually digital currency could possibly phase out the currency system we know today. This may be years or decades down the line, but you can stay ahead of the curve by educating yourself now about the benefits and potential investment possibilities of cryptocurrency.

Understanding cryptocurrency is not just about you getting more control over your funds. If you run a business, you may start encountering more clients, customers and suppliers who prefer to work with digital money. By staying informed about our digital reality, you’ll keep your business competitive.

Read Part 2: Should I Be Investing in Cryptocurrency?

Get personalised advice about your investment and financial goals. Contact Calder Wealth Management for a no obligations initial discussion.

- Ben Calder, Private Client Adviser

 

*This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.