A Cryptocurrency, as opposed to a traditional currency, is any digital money that is managed without a government monopoly. Cryptocurrencies are issued through a process of “minting” by a central authority, usually a government. In order for Cryptocurts to be used, there must be a ledger in existence that details all transactions and exchanges of the Cryptocurrency. A new Cryptocurrency can be started by anyone with sufficient mining capabilities, and it cannot be used as legal tender until a regulated and authorized Cryptocurrency Authority is in charge of its release.
A major benefit of Cryptocurrencies over traditional forms of money is the absence of a central government regulating its release. Unlike conventional paper money, which can be counterfeited by anyone with enough knowledge, cryptocurts are issued from a “bank” or ledger system that must be traced and maintained by its users. This means that there is no centralized entity controlling the supply, circulation, and spending of the cryptocurts, thus eliminating the ability for any government to influence the value of the currencies being issued. This also makes the distribution of cryptosystems more efficient, as well as less prone to outside influences.
Another major benefit of investing in cryptocurts is the lack of taxation required on the assets being purchased. In previous years, many people invest their money into stocks and bonds, which require the payment of taxes to the government in order to gain access to the benefits of the investment. With the ability to secure a diverse portfolio by using numerous diverse Cryptocurrencies, there is no longer any need to pay taxes on these assets.
There is also a lack of capital gains taxes that apply when people transfer money from one account to another. With Cryptocurrency, any transfers of funds are free from taxation because no government regulates the transfer of Cryptocurrencies. This allows individuals to freely invest in whatever they choose, with no restrictions or limitations placed upon them by the government. This gives individuals more leeway to choose which Cryptocurrency they wish to invest in according to their needs, and the amount they are willing to risk.
One other benefit of investing in this wide array of diverse Cryptocurrencies is the fact that there is no capital accounting required. With the conventional system of accounting and taxation, it is necessary to account for the value of each asset that is exchanged. The problem with this is that it makes the transfer of Cryptocurrencies a twice lengthier process, since you have to wait for the government to issue its tax for the value of your previous asset before you can spend it on the new one. With a decentralized ledger such as the bitcoin ledger, however, it is impossible to incur fees for services rendered, and your holdings are protected from double-entry syndrome. You see, when you use a traditional currency ledger such as the USD bill, you run the risk of banking assets twice, and as a result the value of those assets could be diminished.
Investing in the aforementioned array of Cryptocurrencies is an excellent way to secure your wealth. However, you should make sure that you are investing in ones that are highly stable and will not lose their worth as the market changes. The best ones are Dash and Zcash, which are both guaranteed to gain value over time, but are the safest due to their resistance to hacking. The best approach to investing in the different cryptosporters out there is to follow the money. If you see that an asset is gaining in value, then grab it while you can. As long as you diversify your portfolio, you can be sure that no matter what form your investment takes, you are protecting yourself and your family’s financial health.