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FINANCE

CRYPTOCURRENCIES: A BLESSING OR A THREAT?

December 4, 2021

*Disclaimer: This blog post is not a financial advice, nor connected with a recommendation to buy or sell shares, but an educational article for those who are interested to know about investing in the stock market, written by DisiCouture.com contributor and finance advisor.

In 2008, a programmer or a group under the pseudonym ‘Satoshi Nakamoto’ introduced a new electronic money system named Bitcoin. Bitcoin is a decentralized system that allows users to use the internet to perform transactions without relying on authorities or financial institutions. By doing so, Bitcoin challenges the most sacred of government monopolies. The notion of sovereignty is being pulled away from governments in ‘favor’ of individuals.

Cryptocurrency backers hope to create a world where money is completely disconnected from politics and not constrained by borders. After Bitcoin was introduced slowly other cryptocurrencies were introduced. Bitcoin is mainly used as a form of payment and has ‘limitations’ when it comes to upscaling. Therefore an alternative to Bitcoin was created, namely altcoins which are mostly funded by investors and have an unlimited potential. Besides bitcoin and altcoins there are also stable coins. The name itself suggests that it’s a stable asset whose price is pegged to fiat currency such as the Euro and dollar or to exchange-traded commodities such as silver and gold. Because they are tied to a legal asset they are not volatile.

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