Today the world talks about cryptocurrencies. Several exist, and some are better known than others (Bitcoin, Ethereum, Ripple XRP, etc.). It is one of the products of superior technology that combines, among other things, the security provided by encryption with the freedom of not depending on a certifying entity that offers the blockchain.
Trading and exchanging are an option for cryptocurrencies
The rise of cryptocurrencies has suddenly invaded the world of finance. Many people, knowledgeable or not, about investing, trading, and exchanging digital assets are being carried away by this current.
Bitcoin was born as a decentralized P2P (peer-to-peer) protocol without intermediaries, introducing the revolutionary concept of decentralization of information, thus democratizing the financial market, making it independent of intermediaries and giving total control themselves. Bitcoin payments and credit cards also emerge nowadays for most businesses.
What are the drawbacks of using cryptocurrencies?
The risks associated with trading cryptocurrencies are primarily related to their volatility. Therefore, it is essential to understand all the drawbacks before trading them.
We cannot forget that the cryptocurrency market is still developing.
The digital currency continues to thrive; however, it still has drawbacks in its use, among which we can mention: Irreversible payments, It is not a universally accepted payment method, Risk of loss of capital, Exposure to scams, High volatility, Lack of institutional framework, and others.
Cryptocurrencies are often believed to operate outside the reach of global regulation, but in reality, their valuations, transaction volumes, and user bases react strongly to news of initiatives from regulatory authorities.
The news that has a more significant adverse effect on cryptocurrencies are the Possible general prohibitions of cryptocurrencies or their subjection to the legislation, followed by the information about the fight against money laundering and the financing of terrorism and those related to restrictions on the cryptocurrency interoperability with regulated markets.
Frameworks adapted to cryptocurrencies.
Everything points to establishing specific legal frameworks adapted to cryptocurrencies, but what does not allow digital currencies to be legal.
If cryptocurrencies do not have legality, where does the creation and establishment of BITLICENSE arise in the market, which represents the first license for digital currencies in the United States issued by the State of New York, constituting itself as the form of regulation?
This legitimate tool defines cryptocurrencies as any type of digital unit, created or obtained through a mathematical calculation, whose system is based on the internet and is used as a means of exchange or a form of digitally stored value.
Then BITLICENSE can be considered part of the cryptocurrency regulatory framework, demonstrating a significant advance in the legal field.
Cryptocurrencies have too many technological attributes to be a currency; they only lack one legal one, the main one, THE FORCED COURSE.
The forced course is essential today because it is the one who gives an anchor of value and cuts with that vicious circle in which cryptocurrencies are located that cannot solve their value based on themselves, a situation that is assimilated as a paradox.
The use of cryptocurrencies contains a series of advantages for investors, such as The speed of your transactions, Low costs in its operations, The security and transparency that blockchain technology provides, Anonymity that allows functions to be carried out incognito, Its decentralized nature does not require the participation of third parties to mediate transactions.
The advantages of cryptocurrencies should outweigh their disadvantages, thanks to a regulation that is gaining ground every day.
Conclusion
The arrival of institutions endorsing the exchange of cryptocurrencies would give enormous exposure to the market and accelerate the integration of solutions in our daily lives.
What actions have governments and regulatory entities taken to arrive at a regulatory framework adapted to this new system? How to achieve coexistence between traditional approach and crypto assets, and what challenges does this mean for their management?
All these unknowns arise because the legal frameworks that govern the traditional market do not allow or accept that its system can be substituted, interrupted, and modified by the number of hidden interests generated behind them.
We are getting closer and closer to achieving the legitimacy of crypto-asset operations, only that sometimes their weaknesses outweigh their advantages, creating uncertainty and fears as responses to the possible end of the traditional financial system.
