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In the digital era, cryptocurrency is increasingly popular in society. Not a few investors are starting to be interested in this digital investment opportunity. In general, cryptocurrency is a virtual currency that is specifically designed as a means of exchange. As the name implies, cryptocurrency uses a cryptographic system for transactions. The function of this cryptography is to secure and verify every transaction that occurs.
Although it has only been popular for the past 10 years, cryptocurrency has apparently been around since the 1990s. Currently, the most frequently used cryptocurrencies include Litecoin, Ripple, Ethereum, Monero, and GICT (GIC Token) which is a crypto from GICTrade, a forex trading investment application that offers ease of investment with great profit potential.
If you are currently looking for a new alternative to invest, you can see the explanation, how it works, and the advantages and disadvantages of cryptocurrency. Understand it first before investing.
Understanding Cryptocurrency
As explained, cryptocurrency is an intangible digital currency. Now, cryptocurrency is one of the most talked about investment products. In fact, there has been an increase in the value of cryptocurrency investments by 2,700% since 2016. Keep in mind that cryptocurrency falls into the high risk high return investment category.
Investors interested in investing in cryptocurrency need to be aware of the risks and dangers that lurk. It is undeniable that the market value of cryptocurrency often experiences significant inflation. You can buy any cryptocurrency according to your wishes and needs. There are many offline and online services in the world that trade cryptocurrencies.
Cryptocurrency: Functions, How it Works, Types and Advantages
One of the most famous is Bitcoin, but you can also choose other cryptocurrencies. After purchasing, it's time to decide on the storage media. Unlike other assets that have no form, you have to be smart in choosing the storage media so that cryptocurrency is safe from hackers. The best way to store cryptocurrency is to store it offline via a hard drive. That way, you have full control over the cryptocurrency you own.
Security
In terms of security, cryptocurrency is unquestionable. The protector of cryptocurrency transactions is quite complicated passwords. Plus a decentralized system that makes every transaction take place peer-to-peer between sender and recipient.
In Bitcoin, cryptocurrency is kept secure by the Blockchain and Ledger platform that is decentralized to all network nodes. It can be said that the cryptocurrency security system is very complicated, like an adventure full of puzzles.
Every cryptocurrency transaction is immediately recorded in the cryptocurrency network system, without being able to be engineered by anyone. By using the code, investment remains safe and can only be done by people who have access to the private key.
Unfortunately, cryptocurrencies are vulnerable to hackers. In some cases, cryptocurrency investments protected by a series of codes and encryption can be hacked in an instant by criminals. Not to mention the lack of regulations that protect cryptocurrency trading activities.
Ways of working
Interestingly, the way cryptocurrency works can be done anytime and anywhere. As long as the smartphone or PC you have is connected to the internet, transactions can be made without worrying about downtime. Later, both parties will receive information regarding the amount of the transaction made. After that, the transaction will be stored permanently without anyone being able to cancel, change, or falsify the record.
For example, if someone wants to transact Bitcoin cryptocurrency, they must undergo a verification process on a Blockchain platform. Blockchain is a ledger that stores all transactions and is available to everyone in the network.
Everyone in the network can see the balance of each account. After the verification process and virtual coin transfer are done, the sender and recipient are also required to add a virtual signature via a private key. When all processes have been completed, the transaction will be broadcast on the network. However, it must be confirmed first to then be recorded by the network.
Mining or Mining
In cryptocurrency, there is a term that is often encountered, namely mine. In Indonesian, mine means mining. This activity is very useful and has an important role in confirming all transactions and making books to the Blockchain platform.
The way to do this is by solving complex algorithmic puzzles. The more miners try to solve the algorithm, the harder the puzzle becomes. Usually, popular cryptocurrencies will attract more miners.
By mining, you can get quite a lot of profit. However, you need to have good computer skills and special hardware to do mining. In one day, you can earn around USD 10 just by using standard hardware. Imagine how much profit per day you can get if you use special hardware.
So how does this transaction work? Miners who successfully solve the algorithm puzzle will be awarded with rewards and transaction fees. which can be saved as an investment or used for shopping. In connection with the increasing popularity of cryptocurrencies, more and more miners are trying to make a profit.
Advantages and Disadvantages
It can be said that cryptocurrency is the answer for investors who want high security. However, there are some things you might want to consider before investing in cryptocurrency. As a digital currency, cryptocurrency has the potential for high price increases in the future. The existence of Blockchain technology also makes the cryptocurrency payment process easy, fast and safe.
In addition, each account can make transactions without having to show their real identity. So that the security of personal data will be maintained. The capital needed to invest in cryptocurrency is also relatively more affordable when compared to other investment products.
However, behind the series of advantages, there are also disadvantages that you need to consider. One of them is the Indonesian government regulation that prohibits the existence of cryptocurrencies. The lack of legal protection can lead to the risk of violations in the cryptocurrency community. The money you invest is also not legally protected.
In addition, cryptocurrencies are also prone to high volatility. Volatility is a condition of a currency that experiences a drastic increase or decrease in a short time. Then, the existence of a wallet key can also be a double-edged sword for cryptocurrency owners. The reason is, if you forget the password or password that is one of the security systems, then the money in the account will be deposited forever.
Moreover, now there are more and more miners who want to reap as much profit as possible. If you do not have the same level of computer skills as them, you certainly cannot do mining activities with great profits.
In conclusion, cryptocurrency is a form of digital investment that can be one of the options for investors. Regardless of its advantages and disadvantages, cryptocurrency can be one of the investment products that you should try. Of course, the greater the profit that can be obtained, the higher the risk that you will have to face in the future.
Visit GIC Indonesia to get information about the world of trading. You can also join us in the Telegram Community GIC Trade and Telegram Channel GIC Trade. Don't forget to check the Youtube account GIC Indonesia which is full of lots of information, and follow our Instagram account to get information about various interesting webinars that you can follow.
