The most important thing to know about cryptocurrency before you invest

Is she making the right choice? (Credits: Getty Images/Westend61)

There’s one thing you should know if you’re planning to get into the world of cryptocurrencies in 2022.

And it’s that the world of Bitcoin, Ethereum, Dogecoin and others are far more than just digital investment repositories for your real-world money.

In fact, they’re a whole new technological system that has the potential to re-write how our financial transactions work.

Bitcoin has moved beyond simply being an inflation-resistant store of value and is now used to make payments to anyone in the world, instantly, without any kind of bank or payment processor in the middle.

Often, the ability to transfer Bitcoin or any other crypto is built right into the digital wallet.

And far from being just a get-rich-quick scheme, Bitcoin (and other cryptocurrencies) have gone through multiple price cycles over the last 12 years. All of which have happened without a central establishment pulling the strings.

The decentralised nature of crypto is also what makes it relatively secure. There is no single hub that can be attacked and compromised by cybercriminals. In fact, the Bitcoin network has never been successfully hacked.

Instead, many people fall prey to scams and tricks that seek to go after their individual wallet directly.

Criminal payments?

While it is the case that cryptocurrency’s anonymity makes it appealing for criminals to use for payments, this isn’t as widespread as you may think.

According to a 2019 study, only 2.1% of Bitcoin transaction volume in 2019 was related to criminal activity.

So, if you’re going to get involved with crypto this year, you’ll do well to think of it in terms of a technological decision rather than a financial one.

Sam Volkering says…

Sam Volkering

People should know that this is a bigger technology story than it is about investments and speculation.

What we’re talking about is a technology development that is making us rethink how people – how humanity – interacts and transacts in the online world.

Sam Volkering writes about cryptocurrencies and other tech-based investment trends at Exponential Investor.

You can follow him on Twitter here.

MORE : Crypto investors fooled into buying a copy of Dune for £2.2 million

MORE : Inside Castle Craig – the rehab centre helping cryptocurrency addicts

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