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In the early months of 2022, the stock market saw an massive drop in the value of stocks as well as other risk assets. Arif Efendi clarifies the reason for this as the rising rate of inflation, expectation of an rise in rates, as well as tensions between Russia and Ukraine. In a volatile economy, investors have to diversify their portfolios and this is where investing in crypto is a good option. Is Cryptocurrency an asset or a form of Investment? Cryptocurrency is a virtual or digital currency that is stored in a digital wallet. Arif Efendi believes that digital wallets allow you to transfer money internationally without physical cash. Cryptocurrency transactions are protected through a method known as cryptography. This makes it difficult for users to make double-spends or create a counterfeit as per Arif Efendi. One of the striking features of the digital currency is the fact that it does not have an issuer central to it. It is completely free of government interference. Arif Efendi You can either mine the currency or buy it at an exchange or a broker. Ripple, Ethereum and Litecoin are all popular cryptocurrencies. Each coin has its unique uses. Bitcoin is more than just a digital currency. It can also be employed to invest. Many people who are looking to invest in digital currencies are trading them to earn profits. An investor may buy digital coins and keep them for a longer or shorter period. Then, they sell at a time when prices increase. Although some countries restrict the use of cryptocurrency, El Salvador became the first country to adopt Bitcoin as a legal trend. Arif Efendi on Printed Currencies versus Cryptocurrencies While fiat currencies and cryptocurrencies enable payments, they're not the exact same. Arif Elfendi clarifies the differences. Regulation The central bank is responsible for regulating fiat currencies since they're issued by the government. They are also considered to be legal tender. But, they can be devalued as time passes because of the policies of governments. Arif Efendi Cryptocurrencies are digital assets that are not centralized. Arif Efendi Since they are digital assets, they can be used without the consent from the authorities. Some countries do not support the use of crypto because they believe that it's used to facilitate money laundering and other illegal activities. Arif Efendi Exchange type While fiat currencies can be traded electronically as well as physically, cryptocurrency can't be exchanged digitally. This is because cryptocurrency is encoded in a series code. Storage Method Fiat currencies can either be kept in banks or home safes. Cryptocurrencies are stored in crypto wallets. Fiat wallets also serve as an option to convert currencies issued by the government to digital assets. Advantages of Cryptocurrencies over Printed Currencies There are many benefits to cryptocurrency over printed currency. Arif Efendi has stated that they provide the following: Decentralized System Crypto is an open system. Arif Efendi Nobody has the ability to control or regulate its value or circulation. Every transaction is recorded in a ledger, just like banks do. However, the ledger is not a repository of personal details. This helps prevent fraud and theft of data. Serves as an Hedge To hedge against the effects of inflation, digital assets such as Bitcoin can be utilized. Inflation may lead to more money in circulation but less expensive prices for the items in short supply. Bitcoin is intended to be scarce regardless of the changes in the economy. Therefore, you will be able to purchase a few coins for hundreds of dollars. There's also a high chance that the coins will appreciate. Payments across Borders By using cryptocurrency, you are able to transfer money to people from other countries in a matter of seconds. Transaction fees are low and the process is simple. It can take a few weeks for the currency to reach its destination. The transaction can be costly because of the high fees. In certain situations, your transaction might be rejected because of tension between the countries, sanctions , and rules. Cryptocurrencies pose a risk Arif Efendi reviews the risks of using cryptocurrency. Extreme Volatility The cryptocurrency market can be volatile. In a matter of months, you can accumulate significant money, and then be unable to keep it all. You can delay getting your tax refund People who are older and advertisers believe that novices are able to earn high-quality returns in only a couple of hours. In reality the investment returns might not be as impressive in the absence of steady trading habits and are able to manage risk effectively. Account Monitoring Although cryptocurrency transactions are locked with codes, they leave digital tracks. The FBI can read the codes and track the accounts of common citizens. Conclusion Arif Efendi discusses cryptocurrency as a form of digital investment that you can use to make secure transactions. You can also make use of it to diversify your portfolio. This article clarified the differences between cryptocurrency and printed currencies. The article also discussed the advantages of cryptocurrencies over paper money. Arif Efendi emphasizes that cryptocurrency is like every other investment. Arif Efendi He suggests that people contact an experienced advisor prior to investing.