You know we all started hearing one particular word at every corner a couple of years ago, especially when COVID hit and everyone was at home glued to their screens? What was it? Oh, yeah, Bitcoin. NFT too, in fact! "What are these?" you may ask. These are different types of digital assets; now let’s learn a bit more about them.
In a digital world, digital assets can even mean the photos on our phone or Netflix movies that are all stored on our cloud (the digital cloud, not the actual clouds made of water). More broadly, digital assets are digital representations of value in the form of digital tokens or virtual commodities.
The pros include security and traceability of the transactions, given that they’re on the blockchain (the digital ledger that basically gives all entries a tracker). Not to mention, cutting out the middle men (those pesky banks) often makes trading of these virtual assets more accessible to people.
However, the fact that virtual assets essentially means you carry around a volatile wallet, crypto is unregulated and prone to hacking attempts by bandits quite literally outside the law. But, the good news is that as more and more companies begin to accept crypto transactions (such as PayPal and Tesla) governments are starting to feel the pressure to acknowledge that they’re a viable means of conducting financial transactions nowadays. One way they’re doing this is by introducing crypto regulations of their own. Dubai, for example, ever at the forefront of innovation, has recently introduced a framework to regulate virtual assets. This will likely give people comfort in embracing these alternate currencies, knowing that there is some legal surveillance around their operations.
So, is crypto for everyone?
It can be. The decision, however, lies in your hands. One should strive to have a balanced investment portfolio and crypto can be considered as a part of a diverse balance. It comes down to whether it’s a risk you have the appetite for given your own personal financial circumstances.