Where does crypto money go?
Cryptocurrency is cryptographic money that is not controlled by banks, states, governments, institutions or any kind of authority. This is the actual and optimal difference between a fiat currency and digital coins.
When Fiat money is digitized, it also takes the form of binary numbers 1 and 0, whereas cryptocurrency is based upon blockchain technology and these digital coins use the blocks that are in the blockchains.
These cryptocurrencies are actually virtual money that is secured by blockchains, and these blockchains are also traceable, and all the details of transactions can be found on these blocks. Cryptocurrencies such as bitcoins offer a hassle-free way of conducting border to border transactions without any charges; all you would need is a workable, stable internet connection. The set rules are also very much transparent for conducting transactions. Moreover, you won’t have to worry about answering anyone because it is not controlled by any kind of authority.
Investors, as well as crypto enthusiasts, have had debates about the actual price of different cryptocurrencies and Bitcoins; first of all, it has been considered as an alternative to fiat currencies.
Challenges of Crypto coins when it comes to investing in crypto with real money
When comparing against fiat currencies, one of the biggest complexities that the Crypto coins, especially Bitcoin (being the leading one), have to face is their status as a store of value because depending on this is its utility as a medium of exchange. To have some practical value, it has to become a successful means of exchange so that it can get some intrinsic value and a practical utility.
Fiat currencies are backed up by physical commodities and precious metals, but the crypto coins are not. The value of crypto coins is primarily driven by the speculative interests of investors and crypto enthusiasts. Crypto coins, specifically Bitcoin, have shown the characteristics of bubbles.
Valuing a Crypto coin as money
Crypto coins are more of a long term investment model. It is also possible that later on, the coin will be replaced by another digital currency or a dominant one. The Crypto market, being a broad one, already has more than 9000 types of crypto coins available right now.
The Crypto market being an unstable one becomes risky for both exchanging money and investing. Governments are also taking different approaches depending on countries; some are indirectly supporting them while others have banned any kind of association with crypto coins. But corporate industries have started taking bitcoin and other crypto coins as means of payment.