As digital currencies become more and more popular, people have shown a strong interest in such value-added assets. Therefore, many people will consider digital currency as their first choice of financial products. I believe that everyone must have their own unique insights in the selection of digital assets. So what I want to talk about is not how to choose digital currency as a financial product, but a description Three understanding points about digital currency.
First, is digital currency a legal asset?
When it comes to digital currency, the first thing that comes to mind is Bitcoin. As a virtual currency based on mathematical algorithms, Bitcoin has quickly become popular around the world in recent years due to its limited number, decentralization, and anonymity, attracting a lot of attention. Although it is not comparable to traditional assets. But now more and more institutions are beginning to recognize digital currency, and digital currency technology has also been applied to a larger field.
However, in one sentence, China does not currently have a legal digital currency, but it has not publicly stated that there is a non-compliant digital currency. The country just does not recognize the currency attribute of digital currency, but only recognizes it as an asset.
Second, the volatility of digital currencies is too great?
Digital currency is not a classic example of related assets, and its fluctuations are not affected by major global indexes and benchmarks. Some experts pointed out that the volatility of digital assets is easy to scare people, but if the investment portfolio is properly managed, then there is no problem with returns. It can only be said that diversified investment is very important, and one more method means one more possibility.
When the market fluctuates sharply, for investors, digital currency can be used as a hedge investment.
Third, is digital currency absolutely safe?
No, definitely not. Although digital currencies are traded on decentralized exchanges, there are still loopholes. Decentralized exchanges are more secure than centralized exchanges. It is like the concept of the Internet. The Internet is composed of countless computers. Even if one computer is damaged, the entire Internet will not be affected.
Of course, when trading, only a few things can be done to increase the security of assets. When using a digital wallet, use a hot wallet with caution. After all, it is connected to the Internet and the risk is greater.
Of course, the above is only the tip of the iceberg of digital currency. In the future, we still need to look at these problems from different angles and thinking, and find solutions in the process of exploration.