Note from Kalen: I love posting everything I can on cryptocurrency to keep you guys updated, but like any investing, do it at your own risk. As this author points out, crypto can be extremely dangerous, but there’s also possibility of gain. Do you homework.

Cryptocurrency is simply a digital form of money designed to be decentralized for peer-to-peer transfers, which are securely encrypted with blockchain technology.

Cryptocurrency is fundamentally a digital form of money, but it has metamorphosed to become an interesting investment in the last couple of years. Bitcoin, the poster boy of cryptocurrency has grown from $0.0002 in 2010 (10,000 BTC bought $20 worth of pizza) to around $10,600 today.

Cryptocurrency evangelists believe that cryptocurrency is a useful tool for wrestling economic power from the control of governments and corporations. Wall Street critics, however, opine that cryptocurrency is at best a passing fad because it lacks the fundamentals of value. The unfortunate thing though is that both the proponents and critics of cryptocurrencies make absolute claims without taking a moment to review the validity of the arguments from the other camp. This post provides objective unbiased insight into cryptocurrency investments with a view to helping you decide you should invest in cryptocurrency or not.

More to Cryptocurrency Than Bitcoin

When people think about cryptocurrency, they often think about Bitcoin, its exponential gains over the years, and its occasionally heartbreaking lows. Some potential cryptocurrency investors also think that it’s probably too late to invest now since Bitcoin seems to be peaking. However, Bitcoin is not the only cryptocurrency in the market and there are more than 1,300 other cryptocurrencies in the market.

An important point to note is that Bitcoin is flawed because it was the “test” cryptocurrency. Larry Harrington, a trader on Olsson Capital notes that “some other altcoins such as Ripple, Monero, Bitcoin Cash, and Ethereum are trying to fix the problems associated with Bitcoin.” If you want to invest in cryptocurrency, don’t limit your due diligence to Bitcoin.

Cryptocurrencies are Facing Increased Scrutiny

If you want to invest in cryptocurrency, you need to understand that the industry is facing significant regulatory risk as governments and its agents start to pay more attention to cryptocurrencies. As much as cryptocurrencies promote ‘anonymity’ and a decentralized monetary flow, it is practically impossible to create a parallel economy beyond the control of governments. Hence, the survival of cryptocurrencies is still largely dependent on government policies.

Cryptocurrency still needs to intersect with fiat currencies at different points in the economic chain; hence, you need to pay attention to the regulatory environment and how such regulations can affect the outlook of your cryptocurrency investments.

Cryptocurrency is Here to Stay

Governments and their agents can scrutinize and regulate the cryptocurrency industry all they want, but they will never be able to eradicate cryptocurrencies. The underlying blockchain technology that powers cryptocurrency has the potential to disrupt the world order in much the same way that the Internet changed the world.

Going forward, the cryptocurrency that will break into the mass-market might not be one of the cryptocurrencies that are currently in the market. The cryptocurrency industry needs to bridge the knowledge gap that is limiting that mass-market adoption of cryptocurrencies and the security flaws through which hackers can steal cryptocurrency from exchanges must also be fixed.

Massive Volatility in Crypto

Cryptocurrencies are still classified as highly-speculative investments – you can double your money overnight and you can also lose all or most of your money in the blink of an eye. Before you invest in cryptocurrency, make sure that you understand the incredible level of volatility that the industry experiences. If you tend to panic with a news of stock price movements, you’ll experience an exponential increase in your panic attacks because cryptocurrency headlines are usually jarring.

With the current level of volatility in cryptocurrencies, it might be safe to only invest money that you can afford to lose. It would be very rash to sell your traditional investments such as stocks because you want to buy cryptocurrencies. However, you might end up with regrets if you stay on the sidelines while the cryptocurrency market continues to grow and evolve.