When it comes down to cryptocurrencies, Dennis Loos emphasises why it’s crucial to understand the concept of a “distributed ledger.” They can function without the interference of governments and central authorities because of their decentralised nature.
According to Dennis Loos, a successful and experienced crypto trader, many industries, including finance and law, are expected to be disrupted by blockchain and similar technologies.
Because they are decentralised and not dependent on a single point of failure, cryptocurrencies are more cost-effective and speedier than traditional methods of transferring money.
The price volatility, excessive energy consumption, and illegal use of cryptocurrencies are all drawbacks of digital currency.
The Importance of Cryptocurrencies
Blockchain-based cryptocurrencies enable people to conduct peer-to-peer financial transactions or sign contracts because they are decentralised platforms. No trustworthy third-party mediator, such as a bank, monetary authority, court, or judge, is required in any scenario. This might upend the current financial system and democratise finance. The size of the cryptocurrency market has increased dramatically over the past ten years, thanks to new developments and a market valuation of more than $948 billion.
What Is the Process of Cryptocurrency Transaction?
There are no third parties involved when a transaction is made using bitcoins. Peer-to-peer transactions are the term for this type of digital currency exchange. It’s crucial to note that every transaction is recorded on a massive database known as a blockchain. The name “blockchain” refers to the fact that each transaction is represented by a block added to the bigger chain, and all transactions are preserved in the blockchain for eternity.
While the blockchain is not housed in a single location, the computer network that makes it up is constantly safeguarded by intricate systems. This eliminates the possibility of tampering with a blockchain and ensures the security of all transactions and users.
The usage of cryptocurrencies, rather than a third-party institution like a bank or credit card company, has the potential to simplify the transfer of money between two parties. Instead, these transactions are protected by public and private keys and other reward systems like Proof of Work or Stake.
While a user’s “wallet” or account address has a public key, the owner’s private key is used to sign transactions in current cryptocurrency systems. Customers can avoid paying for wire transfers by completing fund transfers with minimum administrative expenditures.
Cryptocurrencies: How Do You Acquire Them?
Mining is a word used to describe the act of acquiring cryptocurrency like Bitcoin and storing them on a computer. They are also able to buy and sell. Individuals or groups can set up computers with powerful processors to solve complex equations. Adding transactions to the blockchain and verifying their accuracy can also be done by machines.
To buy cryptocurrency, you’ll need a “wallet,” an internet software that keeps your money safe and secure. For the most part, you use fiat money to fund your cryptocurrency exchange account and then buy Bitcoin or Ethereum with that money.
However, when more Bitcoins enter circulation – a fancy way of stating there are more coins up for grabs – to ensure that there are not too many minted, the calculations become more and more complicated. For example, it could take years to get your first Bitcoin if you started mining today.
With Coinbase you can store your digital assets, buy and trade Bitcoin and other cryptocurrencies, and open a wallet.
Investing in Cryptocurrency
Although the value of cryptocurrencies may rise in the future, many investors do not see them as long-term investments but rather as speculative ones. Why is this happening? In the same way that traditional currencies do not have any money flow, so do cryptocurrencies. Because of this, someone else must pay more than you paid for the coin before you may benefit. The “bigger fool” investment idea goes something like this. In contrast, a well-managed company’s improved profitability and cash flow increase its value over time.
The money of the future must be stable for merchants and buyers to know what a fair price for a product is, and cryptocurrencies like Bitcoin fall into this category. This price swing is a concern. If bitcoins become more valuable in the future, people may be less inclined to spend and circulate them now, making them less sustainable as a currency. However, due to its meteoric rise in popularity and ease of use, Bitcoin is now widely accepted as a viable alternative to fiat currency.
Requirements for Investing in Cryptocurrency
Beginner investors may find the concept of cryptocurrencies intimidating, but the criteria to get started are relatively low. Investing in cryptocurrency is as simple as following these three steps:
⦁ Documents proving one’s identity
⦁ Access to your bank account data
⦁ VPN (secure sockets layer)
Any proper exchange such as Coinbase or Binance will have a proper KYC (know your customer) procedure for enrolment. Says Dennis Loos who is very experienced in buying and selling cryptocurrencies for his business and for his individual investments as well. Prices of cryptocurrencies fluctuate widely since they are based on the supply and demand of a particular cryptocurrency. This is especially relevant because several cryptocurrencies are intended to be limited in supply.
Some people are concerned that cryptocurrencies like Bitcoin would be unbacked by tangible assets. Some claim that the price of Bitcoin is directly proportionate to the cost of manufacturing it, which uses an increasing amount of energy.
Bitcoin blockchains are impenetrable, but the ecosystem as a whole, including exchanges and wallet services, is not. Throughout Bitcoin’s ten-year history, several online crypto exchanges have been breached and millions of dollars in “coins” stolen.
Although many analysts see benefits in cryptocurrencies, like the ability to preserve value against inflation and ease exchange while being easier to carry and split, unlike precious metals, which are under the government.
For various reasons, digital currencies have been criticized, from their potential use in criminal activities to the volatility of their exchange rates. They have been praised for their mobility, divisibility, inflation-resistant, and transparency.
Cryptocurrency Investing: Tips for Protecting Yourself
According to Dennis Loos, It would help if you took additional precautions to safeguard yourself and your money with any investment. Credibility, safety, and privacy are all frequent worries regarding cryptocurrencies. Investing in crypto platforms is risky for many investors who are wary of taking a position now.
It’s a good idea to properly examine the cryptocurrency you’re considering investing in and the platform that supports it. Do some research to find out who controls the marketplace you’re considering. Please find out how old the company is and where the platform is in its evolution.
In contrast to conventional investments, cryptocurrency is vulnerable to hacks and other technological concerns that aren’t as prevalent in the cryptocurrency market. So, you must be well-versed in the industry you intend to work in.
To begin, it is typical to select platforms that well-known investors like Dennis Loos have worked with. This and a well-established firm structure can aid as a symbol of stability.
Another safe option is to buy cryptocurrency via MoonPay and then deposit it to your secure offline wallet. As you learn more about investing in cryptocurrencies, read the fine print before opening a wallet. An overview of the benefits and risks is in its prospectus. This information will give you a sense of security and let you know how safe your investment is.
Conclusion
Digitalization has also led to a rapid shift in the form of money. Digital currencies have come a long way since the days of barter systems and old-fashioned coins and paper notes.
Cryptocurrencies have developed as a new medium of exchange for purchasing goods and services worldwide. Moreover, some people buy homes and cars and envision their futures through these purchases. However, Dennis Loos ascertains that cryptocurrency has gained a lot of attraction in the last few years.
Nina Smith