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Should You Buy Government-Backed Cryptocurrencies?

Lamont Mason

Posted on January 20, 2018 23:11

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Cryptocurrencies are gaining momentum, with world governments starting to get on board. But it still pays to do your research before you invest.

If you didn’t know, Bitcoin (BTC) is just one of over a thousand different cryptocurrencies that are available to purchase from a variety of different exchanges. They have names like Cryptonex (CEX), Litecoin (LC), and Ripple (XRP), to name just a few. Many people are wondering which type of digital currency they should buy, and what they can do with it when they buy it.

Success stories have gotten the attention of millions of people around the world. As more people are coming up with ways to accept digital currency as payment, and the benefits of the blockchain technology are becoming better understood, political powers are also recognizing the value of digital currency. 

Governments are scrambling to determine how this cryptocurrency phenomenon is affecting their economies. We have seen the price volatility of cryptocurrency firsthand over the last couple of months, as the value of one Bitcoin has soared as high as $20,000 down to lows of under $10,000 in recent days, highlighting the need to research and only invest what you can stomach losing. Many governments are attempting to come up with their own digital currencies in response to the tremendous demand, which has been growing rapidly over the last few months. 

Shockingly, Venezuela is at the forefront of cryptocurrency development, and appears to be taking the lead in the creation of its own digital currency. Its asset-backed cryptocurrency, Petro Coin, which the president stated would be backed by Venezuela’s oil, is set to be available for trading this year. It is rumored that the U.S and many other countries already have, or are in the process of developing, their own forms of digital currency.

Why are governments attempting to develop digital currencies that compete with their own individual fiat currencies, and should these coins be purchased and backed? Should people invest in a centralized government cryptocurrency, and what are these governments’ true intentions when creating them?

Do your homework. Understand that each coin has a function, and make sure the first question you attempt to answer is, “What is its use?” Learn all you can about cryptocurrency, and the digital currency you want to purchase. Find out what it is being used for and then decide if you should buy it. Some coins are companies, the same as those listed on the stock exchange. Others are exchanges, apps, and have unlimited uses and potential. Do your research and find out which coins support your interests and values before you invest.

Lamont Mason

Posted on January 20, 2018 23:11

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Source: Mashable

Cryptocurrencies are crashing. People are panicking.  The crypto faithful, however, abide by one word: HODL. HODL, an...

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