Cryptocurrency: The Asset You Need in Your Portfolio

If you watched CNBC over the years, I am sure you’ve noticed their Bitcoin tickers or Jim Cramer saying how you need to own Ethereum and then saying stay away from the entire space? Cryptocurrency is an interesting asset class we will try to dissect for you.

Protection Against Inflation

As governments around the world continue to print more money, inflation is becoming a growing concern for investors. Traditional assets such as stocks and bonds may lose value as inflation rises, but cryptocurrency is not subject to the same inflationary pressures. In fact, some cryptocurrencies such as Bitcoin have a limited supply, meaning that their value may actually increase as demand grows.

For example, there can never be more than 21 million Bitcoin. I am sure there are far less than 21 million because you read stories of people who tossed their wallets or computers out when Bitcoin was a few cents. 

Technology of the Future

Blockchain technology is the underlying technology that powers cryptocurrency. It is a distributed ledger that allows for secure, transparent, and tamper-proof transactions. Blockchain is made up of blocks of data that are linked together in a chain. Each block contains a timestamp, a link to the previous block, and a transaction record. This structure makes it very difficult to tamper with or hack the blockchain.

Cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature. It is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

Blockchain technology has the potential to be used for a variety of applications beyond cryptocurrency. Some of these applications include:

• Supply chain management: Blockchain can be used to track the movement of goods and products through the supply chain. This can help to ensure the authenticity of products and to prevent fraud.

• Financial services: Blockchain can be used to streamline financial transactions and to reduce costs. It can also be used to create new financial products and services.

• Government: Blockchain can be used to improve government services and to make them more transparent. It can also be used to create new forms of government.

The potential applications of blockchain technology are vast. As the technology continues to develop, we are likely to see even more innovative and groundbreaking uses for it.

New Use Cases

The notion of use cases has been mentioned a few times. As the world evolves, the way we interact with each other evolves, our needs evolve; generally wanting things quicker. While still early in the journey, Cryptocurrency helps solve many of those evolving needs.

Have you ever wired money to a friend or attempted to purchase a home, but it takes several days to process that transfer with your bank? Why does it take so long when it’s your money?

Short answer, banks have added many layers of verification and unnecessary processes in my opinion. I’m sure you’ve asked yourself, I wish I could just venmo or zelle instead, it's so much quicker. This is where Cryptocurrency comes in to address that specific use case. Using Blockchain/Smart Contracts, you can instantly transact.

If you find this content interesting, please let us know. We’d love to hear your feedback and thoughts.