Why Invest in Cryptocurrencies?
A Cryptocurrency, is a type of digital currency designed to operate as a medium of exchanges where individual private coin ownership data is kept in a public database. The major benefit of the Cryptocurrency model compared to the conventional model of private currency ownership is that unlike the private model, the owner’s privacy is preserved in the exchange process. Unlike stocks and bonds, which are intrinsically tied to the economic and social wellbeing of society, the private ownership of coins provides both economic benefit and societal benefit, as long as proper precautions are put into place to ensure the privacy of all participants.
However, the immense benefit of the Cryptocurrency model has prompted many people to wonder how an unregulated free market can function without regulating itself in some fashion. This problem is further exacerbated by the fact that many people view the Cryptocurrency industry as something that has evolved on its own, without any form of standardization or regulatory control. While this may be true in some respects, it is also true that this technology has been utilized as the basis for many governmental regulations and rules, such as those found in the United States Securities Exchange Commission and the Internal Revenue Service. In other words, while the Cryptocurrency industry may not have been formally regulated by any governing body, the impact that it has upon the economy is undeniable.
Therefore, many people are wondering how the infrastructure required for the governance of the Cryptocurrency network will work. One of the answers lies in the idea that the governance of the Cryptocurrency system will function through a self-governing nonprofit organization. This organization would be responsible for maintaining a set of guidelines for the use of the cryptography that underlies the Cryptocurrency network. The primary driving force behind this concept is the fact that the privacy and confidentiality of all users of the Cryptocurrency must be maintained at all times, and this responsibility is directly contrary to the self-governing intentions of many people involved with the Cryptocurrency industry. However, it must be noted that even if this concept were implemented, there would still be inherent risks inherent in such an arrangement.
Many people believe that there should be some type of standardization for the core protocol that is being used to underpin the Cryptocurrency system. This would include provisions that dictate how the ownership of the underlying assets will be protected from fraudulent users, and also the manner in which any disputes between users of the Cryptocurrency can be resolved. By developing a standard protocol for the handling of the Cryptocurrency trading marketplace, it may be possible to create a more uniform system by which users of the underlying Cryptocurrency can interact with one another, reducing the possibility for fraudulent transactions and ensuring that disputes between different users of the same Cryptocurrency are resolved in a timely fashion.
Another option that may be considered to regulate the Cryptocurrency market is the establishment of a “crypto-asset” management platform. This would essentially act as an intermediary between the buyer and the seller of the Cryptocurrencies. This would allow users to purchase Cryptocurrencies from outside sources but would also restrict the ability for the seller to alter the price of the Cryptocurrencies they are selling. The Asset management platform could also be controlled via a smart contract that would be run on the back-end of the marketplace. This would provide the means by which the value of Cryptocurrencies can be stored, verified and transferred, whilst providing the necessary security and flexibility to ensure that the pricing of Cryptocurrencies remains intact.
There are a number of different motivations that may motivate people to get involved with the trading of Cryptocurrencies. For instance, some people may be motivated by the opportunity to make a profit through the selling and buying of Cryptocurrencies. At the time of writing, the value of the Cryptocurrency that is being traded on the Forex market stands at a value of around US$2.6 trillion, with a further estimated value of US$3.5 trillion in the next two months. Therefore, the potential for a large profit is certainly present. Other motivations for getting involved may come from the desire to have control over the future direction of the value of currencies, as well as the need to keep up with the latest trends and developments in the field.