Financial professionals speak about cryptocurrency
Page 4 • Wednesday, September 12, 2018 • The Hammonton Gazette
CRYPTO, from Page 1
database that is maintained by a
network of computers known as
blockchain, which consists of a
growing list of transaction records
(also known as “blocks”) that are
linked and secured through the
use strong cryptography.
This public database is stored
on computers worldwide and lists
every cryptocurrency transaction
process that is taking place. This
transaction data cannot be altered
due
to
the
fact
that
cryptocurrencies are secured by
math (cryptography), rather than
by people or trust, according to
reports.
The use of blockchain
eliminated the need for a true,
third party—such as a financial
institution—to verify peer-to-peer
digital transactions, and also
eliminated the possibility of
digital assets being double-spent,
which was previously difficult to
prevent due to the relative ease of
reproducing
most
digital
information, reports said.
Bitcoin was the first form of
cryptocurrency to perfect the use
of blockchain to create the world’s
first fully-functional digital
currency, and it redefined the way
people
use
money.
This
breakthrough caused a massive
surge in the global cryptocurrency
market, which resulted in
Bitcoin’s price nearly reaching
$20,000 per unit in December
2017 and led to the rise of more
than 1,800 similar forms of
cryptocurrency whose total
market value reached an all-time
high of $829 billion in January
2018 according to published
reports.
Published reports said as
cryptocurrencies continued to
thrive, they attracted more
mainstream attention and interest
from consumers. Bitcoin, unlike
most cryptocurrencies, can even
now be bought and sold on
popular online platforms like
Coinbase and Square Inc.’s Cash
app.
However, as enticing as the
crypto market may seem, it is a
complex entity that possesses
great volatility and carries several
inherent risks that prospective
investors need to be aware of
before they start putting money
into the market.
As
of
August
2018,
cryptocurrencies
are
not
considered securities (tradable
financial assets), and are therefore
beyond the jurisdiction of the U.S.
Securities
and
Exchange
Commission (SEC), which has
advised against investing in
cryptocurrencies due to their lack
of core fundamentals like cash
flows and profits, which support
the valuation of cryptocurrency
and allow investors to track and
forecast market trends.
Due
to
this
lack
of
fundamentals in the crypto
market,
most
financial
professionals
view
cryptocurrencies
as
highly
speculative and volatile markets to
invest in. James Siwek, a financial
advisor for Edward Jones in
Hammonton, said his firm does
not offer a way to purchase or
hold cryptocurrencies, or futures
contracts for cryptocurrencies,
due to their risky, unpredictable
nature and the relatively new and
unproven use of blockchain that
maintains them.
“Basically, it’s kind of like
gambling. So, it’s not really
investing—unless you know
something I don’t know about
cryptocurrencies. What is it even
based on? It’s based on a
technology that basically hasn’t
been fully tested yet,” Siwek said.
Siwek said that blockchain does
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