Understanding What is Cryptocurrency

Those who are in the investment world may already be familiar with, cryptocurrency investing which is a cryptocurrency for beginners. The existence of crypto / digital currency provides another option for everyone who wants to invest in a different way.

Like currencies in general, cryptocurrencies can be used as a means of payment. However, it can only be done in a virtual way. As the name suggests, this digital currency is not used as a physical payment instrument because it can only be used in the digital world.

will provide detailed information about cryptocurrencies including how to invest in cryptocurrency parables. will also discuss the various best and most trusted cryptocurrency investments from 2020 to 2021. So, if you are starting to be interested in the results provided by cryptocurrencies, but still lack information, you can read this article to the end. The most important thing in starting an investment is to have deep knowledge.

Also Read: Types of Cryptocurrencies

Understanding What is Cryptocurrency

Cryptocurrency is a term that is getting familiar to the ears of many people. Curious about what crypto is? Here’s the explanation.

a. Meaning of Cryptocurrency

Crypto/cryptocurrency is a (source: Wikipedia) digital/virtual currency asset designed to work as a place of exchange that utilizes strong cryptographic collateral to secure financial transactions somewhat highly unlikely to be counterfeited/duplicated, control the process of creating additional units, and verify transfers. asset.

b. Cryptocurrency Security

Are cryptocurrencies safe? As a virtual currency, crypto trading is an investment method that can be used as a means of payment on the internet network. In crypto, there are complicated cryptographically guaranteed passwords that will protect and maintain the security of this digital currency.

How to play Cryptocurrency trading, If you are interested in using crypto as a means of payment, you can’t just use it. Before making a payment, first, make sure the seller/merchant where you shop accepts digital currency payments. So, you can’t just choose crypto, even though this digital currency is designed for digital payments.

The term cryptocurrency investment is a combination of 2 words, namely cryptography which means secret code, and currency which means currency. Although it has only been popular in recent years, the concept of cryptography has indeed been known since the days of the second world war.

What is a cryptocurrency and why is it important Maybe not many know that for now, Germany uses cryptography to be able to send secret codes so that they cannot be easily read by the opposing party.

c. Stocks & Crypto Difference


What is the difference between stock & cryptocurrency investing? Here are 10 differences between the two.

1. Instrument

The type of instrument traded on the stock market is company shares. Meanwhile, the instrument used for the crypto market is a digital currency, like Bitcoin.

2. Asset Type

When you buy shares of a company through the stock exchange, the shares you own represent a percentage of your ownership of the company. Whether or not the company’s performance will determine the value of the shares. Meanwhile, crypto does not always represent partial ownership of the company/project that issued it.

3. Aspects of Fundamental Analysis

Stock fundamental analysis involves a variety of information that has an impact on the price/value of a stock, ranging from cash flow, return of assets/indicators that measure the company’s ability to use assets to create profits, to including gearing ratios to measure the extent to which the company finances its operations. with loan capital. Meanwhile, regarding crypto, the aspects considered are the basis for the use of the crypto asset, how many people use it, and the team behind the creation of the asset.

4. Volatility & Risk Level

Stocks against, Understanding cryptocurrency and blockchain, have a mechanism for limiting volatility while the market is out of control through up and down auto rejection until trading is a temporary stoppage of trading which causes this volatility to be maintained if there is a drastic decrease or increase. You could say, the stock market tends to be more stable and less risky. Meanwhile, crypto assets that do not have volatility control are quite able to move as with supply and demand which causes the risk of crypto assets to go up or down drastically. This high yield makes crypto very vulnerable to risk.

5. Transaction Unit

Stock traders against Indonesia must make a minimum transaction of 1 lot / 100 shares, for example, for a share price of IDR 1,000 per share, a minimum capital of IDR 100,000 per lot is required. Meanwhile, even though the price of Bitcoin can reach hundreds of millions of rupiah and Ethereum which reaches tens of millions of rupiah, small capital traders can still transact by buying the smallest fractions, such as Bitcoin with 8 decimal / 1 sats fractions.

6. Trading Platform Character

In stock investments, traders are able to make transactions together to become customers of securities. Meanwhile, transactions for crypto assets can be carried out by traders/holders via crypto exchanges to crypto storage in the wallet application.

7. Connection

Stock investment is usually limited in the stock exchange to one country, as in the rule, foreign traders who want to buy shares in Indonesia must adjust the rules for Indonesia by creating a domestic securities account. Meanwhile, crypto assets have unlimited connections between countries, although the number of traders who are able to make transactions is increasing.

8. Transaction Fee

The cost of buying and selling shares against the stock exchange tends to be high. Because, stockbrokers will charge fees/commissions, and banks will charge investors while making payments and capital gains are subject to tax. Meanwhile, the cost of crypto-asset exchanges is relatively low. For example, transactions on the blockchain are relatively small because you only have to pay a gas fee/payment for miners who validate crypto user transactions and incur exchange fees that are relatively lower than stock exchanges.

9. Trading Time

Stocks only work full time from Monday to Friday. Meanwhile, the crypto market operates 24 hours a day & 365 days a year rather traders are able to monitor cryptocurrency price changes even while the clock says midnight on the eve of the new year.

10. Regulatory Body

Shares, including financial instruments, are regulated by the Financial Services Authority. Meanwhile, for crypto, Indonesia has legalized cryptocurrency as a commodity, but not as a means of payment. Cryptocurrency regulations are in the hands of the Commodity Futures Trading Regulatory Agency (CoFTRA).

Then, what is the difference between digital currency and conventional currency that we usually use on a daily basis? If conventional currencies are centralized, it is different from crypto / digital currencies which are decentralized. In a transaction that uses crypto, no party acts as an intermediary. Thus, payments/transactions take place from sender to recipient / what we usually refer to as peer-to-peer.

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