The journey to a thousand digital miles begins with a single digital currency.
Whether we like it or not, the Information Age has already arrived with most of the world’s populations going online due to the series of lockdowns and quarantines brought about by the coronavirus pandemic that, fear aside, have suddenly halted peoples and economies on their tracks. What best convenience or option one can have except by turning to the Internet for family connections, news updates, music, entertainment, finance, to name a few. We hope not just one but too many would have already come across that disruptive buzzword that has been around for some time now, and that is digital currency (which we would be mentioning here as such more often than its synonym, cryptocurrency).
So, what is a digital currency?
Digital currency is a mode of payment that only exists on the Internet which has no physical presence. No central authority controls it, but the owner and, instead, a public ledger is distributed across all computers, allowing for transparent, secured seamless and fast transactions between parties. Digital currencies are stored in “digital wallets” secured by a cryptographic key, or a host of it, through which deposits and payments are made to buy products and services. Most keep it for profit.
How do they work?
Digital currencies operate upon its backbone blockchain technology that without which, a digital currency can’t exist.
Blockchain is a cryptographic invention that can be applied to other technologies as well. It is a network of computers that verifies and validates each transaction simultaneously, making it public and, therefore, secure. It is almost impossible to tamper any entry as each block of stored data is connected to a newer block by a hash, thereby making any done deals immutable.
The process of mining consists of ‘miners” who solve mathematical problems presented by the block in order to validate transactions. As with every successful transaction, they are paid with a digital coin or token, or a corresponding processing fee, as the case may be.
The distribute ledger technology (DLT) works such that anyone can have a copy of the blockchain, so that a miner who successfully solves the mathematical problem of the block can be accepted through via a consensus, after verifications from other miners. The more verifications a block can have, the more it is trusted. DLT virtually eliminates shady deals.
Is it a good investment?
Investors can be at a quandary as to whether digital currencies are a good investment or not. One reason can be its volatility which keeps many from making it a full-blown medium of exchange. If it hopes to live up to its name as the currency of the future, it needs certain stability to keep its store of value for the long term. Wallex, for example, has come up with EURST, an ERC-20 stablecoin which is, as its called, stable, due to its dollar-equivalent reserve.
Why are they soaring in popularity?
Believers in digital currencies have their reasons that convert others to their cause. They are buying them now since their value may increase in the future. It also removes central banks from the equation who tend to devalue the worth of fiat money by inflating them. All money concerns put security above all, and the DLT application solves security lapses and data breaches. Exorbitant processing fees will be a thing of the past since digital currency transactions, even to thousands of dollars can only be charged a fraction. According to CoinMarketCap, as of June 2020, the total market cap of the top 100 digital currencies is standing at more than $265 billion.
How can I protect myself as I enter?
Protect your money and don’t lose it. Before entering the digital currency world market, it is best to educate yourself about just everything about it. Do your assignment by looking into a company’s prospectus listed in an ICO with some important guidelines:
- Check company ownership.
- Check on major investors.
- Are you in for the stakes? Or just the tokens?
- The finer the details, the better it is.
For starters, Wallex Custody has the capability to guide you through the digital currency investing web. You may choose to possess any digital currency and store it in our custody accounts. Conversion from Fiat to a digital currency or vice versa will not be a problem as we have API to help you securely transact your business via your personal phone anywhere in the world. Do give us a call now and our friendly Wallex staff will be more than happy to serve you. Visit wallexcustody.com for more details.