Page
of
1
Scalability: As the number of transactions increases, many blockchain networks struggle to scale effectively. Innovations like the Lightning Network for Bitcoin and sharding for Ethereum are being developed to address these challenges.
These are the main risks of owning crypto
Credit cards and debit cards have legal protections if something goes wrong.
The same cant be said about cryptocurrencies. Cryptocurrency payments do not come with legal protections.
What is crypto backed by?
Key Takeaways
Backing a currency is done by the currency's issuer to ensure its value. Bitcoin, gold, and fiat currencies are not backed by any other asset. Bitcoin has value despite no backing because it has properties of sound money.
Bitcoin is not backed by any asset or physical commodity. Bitcoin does not require backing since it is sound money because of its inherent monetary properties that allow it to be a good store of value, medium of exchange, and unit of account.
Bitcoin is enabled by various factors such as mathematics and cryptography that lay the foundation of a monetary system that is borderless, permissionless, and censorship-resistant. These factors enable Bitcoin to be sound money, which is why it does not need to be backed by anything.
This should be intuitive because Bitcoin is not controlled by any person or organization. Therefore, nobody is in a position to make this promise, and they would not gain anything by taking on the massive liability associated with ensuring the backing.
The lack of backing does not mean Bitcoin does not have value. The majority of currencies used in the global economy do not have any backing.
By definition, a fiat currency is a currency without backing, and this is what every major economy in the world uses to conduct daily transactions.
Wow a crypto section! I'd really like to contribute here but I am limited .. I can't post or open threads.
There is a lot of buzz surrounding the ALT market.. I think it is looking to take off mid July.. that would be sweet..
Originally posted by: Sutapasima
Credit cards and debit cards have legal protections if something goes wrong.
The same cant be said about cryptocurrencies. Cryptocurrency payments do not come with legal protections.
Yeah that's right the onus is on you to protect your crypto wallet, and double, triple check the addresses you send money to
But it's your money, your responsibility. It's decentralised, no banks owns it, no government controls it.. it's fast, transparent and less fees to transfer your wealth around.
comment:
p_commentcount