Investing in Cryptocurrencies VS Traditional Banking

Investing in Cryptocurrencies vs. Traditional Banking: What to Choose

As you can see, deciding whether to invest in cryptocurrencies or traditional banking products is a more significant question. To make the best choice, you should understand what are the peculiarities, benefits, and drawbacks of each option. Here are some highlights:

Cryptocurrencies: What Is It?

Cryptocurrencies are digital or virtual money that uses cryptography for security and is based on blockchain technology. Their star feature is that they are not issued by a central authority, such as a bank or government. As a result, it is possible to take the following benefits :

-Reduced costs: Unlike banks, there are virtually no maintenance costs: no facilities, tellers, utilities, or ATM’s .

-Increased speed: Transactions take on average 10 minutes, and are verified by a network using cryptographic algorithms.

-Better access to financial services: Third, when billions of people in the world don’t have access to banking – either because of insufficient funds, or low quality of local banking services – they can take advantage of this new financial system.

-Direct transactions: They are completed ‘peer to peer’, with no intellectual property in the middle.

However, cryptocurrencies also present substantial risks, given their volatility and lack of backing by real-world assets. Banks: What to Opt For?

Traditional banking investments include savings accounts, certificates of deposit (CDs), as well as loans, and mortgages. These options can be advantageous considering:

-Regulated status: Banks are adequately regulated by their home country; few forms of harm can reach anyone batting money.

-Predictable and fixed returns: Though this doesn’t account for costs, it’s nice to know that capital is secure: savings accounts compound interest and CDs usually have fixed returns.

-Infrastructure: From call centres and problem resolution to fraud protection: Do retail traders or exchanges have that?

The main disadvantage of investments in traditional banking is lower profitability than the cryptocurrencies. In fact, it is much lower without the possibility of high profitability. Conclusion: What to Choose

So what should you opt for? It depends on your risk tolerance and objective. If you would like to play a high-risk with a high return, you should more likely prefer cryptocurrencies. In case if you do not want to choose and see combined risk-profit opportunities, you should choose both.