In the first quarter of 2022, the stock market experienced a massive sell-off of stocks and other risk assets. Arif Effendi believes that this is because of increasing inflation and fears of an interest rate hike. In a volatile economic environment, investors need to diversify their portfolios, and that is the place where crypto investing is a good option.
Is Cryptocurrency a currency?
Cryptocurrency is a virtual or digital currency that is stored in a digital wallet. Arif Efendi believes it makes it easier to send payments around the globe without the need to carry physical cash.
The cryptography technique is used to protect transactions using cryptocurrency. It makes it impossible to double-spendor to create a fake as per Arif Efendi.
This digital currency has one of the most unique features that is that it's not issued by a central authority. There is no government intervention. You can make money from the currency or purchase it from an exchange or a broker.
Ripple, Ethereum (Litecoin), Bitcoin and Ethereum are among the most popular cryptocurrency. Every coin has its advantages.
Beyond its role as a currency for transactions, cryptocurrency serves as an investment option. Many people are interested in trading digital coins to earn profits. Investors buy and hold for a long or short time, and then sell it off whenever prices rise. Arif Efendi Although crypto can be restricted in some countries, El Salvador was to become the first country to have a legal tendency to utilize Bitcoin .
Arif Efendi Arif Efendi on Printed Currencies versus Cryptocurrencies
While cryptocurrencies and fiat currencies allow for payments, they are different. Arif Elfendi clarifies the differences.
Regulation
Fiat currency is issued by governments. Central banks regulate the issue of these currencies. They are legal as well as legal tender. Their value could be dependent on government policies.
They are digital assets that are not centralized. They are, therefore, free from the control of the government. Certain countries oppose crypto, citing fears the possibility of using it to facilitate money laundering and other criminal activities.
Form of Exchange
Fift currency can be exchanged either electronically or physically. https://www.scienceworldreport.com/articles/62025/20230306/arif-efendi-explains-why-reliance-on-renewable-energy-is-arriving-quickly.htm Cryptocurrency can only however be exchanged electronically. Because the currency is encased in a series of codes, this is the reason why it's only feasible to exchange digital currency.
Storage Method
Fiat currency can be stored in banks, or in home safes. The cryptocurrency should be stored in digital wallets. Fiat wallets also serve as a means of converting currencies issued by the government to digital assets.
Advantages of Cryptocurrencies over Print Currencies
There are many advantages to cryptocurrency over currency printed. Arif Efendi has stated that the following benefits are available:
Decentralized System
Crypto is a decentralized platform. It is distributed in a decentralized manner to ensure that no one can manage its currency or its circulation. Every transaction is recorded in an account just like banks keep track of transactions. Arif Efendi However, it doesn't divulge the personal information of users. This stops the theft of personal data and fraud.
It can be used as a hedge
Digital assets like Bitcoin can be used as a hedge against inflation. During inflation there will be more money available, however scarce goods will be more expensive.
Bitcoin is designed to be rare regardless of the changes in the economy. Thus, the millions of dollars will be able to purchase a few coins. And there is a high possibility that the coins increase in value.
Arif Efendi Payments across Borders
You can transfer funds from one country to another using cryptocurrency in a matter of seconds. Transaction fees are extremely minimal and the whole process is straightforward.
Printing currency can require several days to reach the person who needs it. And the fees for transactions like these are astronomical. In certain cases the transaction may be declined because of conflict between countries as well as sanctions, regulations, and other.
Cryptocurrencies can be a source of risk
Arif Efendi lists some of the risks that could be associated with using cryptocurrency.
Extreme Volatility
Cryptocurrency is a volatile asset. Within a short period of time, you can accumulate significant money, and then be unable to keep the entire amount.
Refusal to Recover Returns from an investment
People who are older and advertisers believe that novices can make high-quality gains in just a few minutes. In reality the investment returns might not be as good if you do not have regular trading and control your risk appropriately.
Account Tracking
The transactions made with cryptocurrency are encrypted by codes, but they leave digital footprints. The FBI can break the codes and track ordinary citizens' accounts.
Conclusion
Arif Efendi talks about cryptocurrency as a digital asset is a secure option for transactions. You can also use it to diversify portfolio. This article discusses the differences between cryptocurrencies and printed currencies. This article also discussed the advantages of crypto over paper currency.
Arif Efendi reminds investors that cryptocurrency is not without risk as do other investments. It is recommended that investors consult an expert before making any investment.