In a nutshell, cryptocurrencies are digital assets that are assured through cryptography. Ownership records are stored in a blockchain ledger: a computerised database across a network which secures transaction records, verifies the transfer of coins and ensures transparency between market players.
Since its inception in 2009, crypto adoption is growing at breakneck speeds. Investors worldwide have turned to cryptocurrencies for a variety of reasons. For some, it may be the opportunity to build wealth. For others, it may be the lower cost of transferring money abroad. The ever growing demand is met with a multitude of cryptocurrencies available for investing: From Bitcoin, the founding ‘father’ of cryptocurrency, to meme-driven cryptos like Shiba Inu & Dogecoin.
Unlike traditional currencies, some cryptocurrencies can be self-governed and managed. It is decentralized, implying that transactions are able to take place directly through peer-to-peer(P2P) mechanisms which remove the need for an intermediary. Furthermore, owners of cryptocurrency benefit from access to their personal funds at any time.
The customer base for cryptocurrencies is growing rapidly. Adoption is fueled by icons like Elon Musk who advocate for cryptocurrencies. Nevertheless, new investors may be faced with technical challenges when they enter the space, including legal implications, investment risks, and diversification.
Benefits of Cryptocurrencies
- Fast transaction times – Crypto can be transferred worldwide within minutes.
- Many cryptocurrencies trade similar to commodities as opposed to conventional, low-volatility currencies.
- Lower transaction fees as there are no intermediaries needed to facilitate the process.
Limitations of Cryptocurrencies
- Cryptocurrency cannot be retrieved if it is sent to the incorrect wallet address.
- Transactions are recorded on a public ledger which prevents the creation of any duplicate coins and/or transactions.
- Regulations in the crypto market vary according to different government bodies.
At Greythorn, we offer an all-inclusive package for your investment needs. Greythorn is an asset manager focused on making concentrated investments into emerging & financial technologies. Additionally, we function as an accelerator for early-stage startups that have clear track records of growth and show potential in scaling globally.
New investors may require an introduction to the industry-specific terminology & we have compiled a list of the most popular terms to get you started:
A
cryptocurrency wallet is a software that allows one to store, send and receive digital currencies. The records are stored on the blockchain, though the wallet keeps a copy of it. While it does not physically exist, it can store digital information and assets that can be spent, saved or sent as an ordinary wallet could.
Cryptocurrency exchanges
offer similar services as regular stock exchanges & are specialised toward crypto markets & their products. Popular exchanges include Binance & Coinbase which are centralised, while decentralized exchanges
such as Uniswap & PankcakeSwap allow customers to utilise P2P arrangements.
Smart contracts
refer to the code that drives blockchain processes. They seek to verify agreements & store them into a public ledger.
An address
is a unique identifier of a cryptocurrency wallet & is presented in an alphanumeric format.
Altcoins
are short for “alternative coins”. Alternative coins are all cryptocurrencies besides Bitcoin such as Ethereum, XRP, Solana, and many others.
