Cryptos and Stocks are Twin Tools

Cryptocurrencies and stocks are like twin investment siblings.

Both associate speculative values to drive the financial market.

But, stocks and cryptocurrencies use radically different technologies.

• Cryptocurrencies mostly use decentralized processing of transactions.

• Stocks use centralized processing of transactions.

• Cryptocurrencies can be used as digital cash and assets.

• Stocks are investment assets but can not be used as digital cash.

Almost everybody knows what a stock is and how it performs.

When I was in high school, one day I added a new word to my English vocabulary. The word is "stock." I learned that "stock" means what you have.

• During my government job, I came to know about "stock-taking" and verifying all the equipment and consumable items present in the store of the organization.

Now, I know that companies and business houses issue shares in the market generally called the "stock market," for selling shares or "stocks" to the public.

• Depending on business performances and profit earnings, the shareholders of companies get dividends annually or quarterly, or as per the laid down rules.

The value of each share or stock varies as per market undulation. Sometimes, the price goes up, and the shareholders become happy. The price also falls due to the failure of a company's business performance.

• The fluctuation of the share prices is part and parcel of the stock market.

Image Source: Nicholas Cappello on Unsplash

Cryptocurrencies adopted the speculative element of stocks

Cryptocurrency is a set of data assets encrypted by cryptographic protocols, minted by a distributed computing network infrastructure, and written on distributed ledgers in the same computational network.

• The initial value assigned to a cryptocurrency is used for selling the initial coin offerings (ICO) in the open market. The immediate success of a cryptocurrency project depends on how fast the investors purchase the ICOs.

After the cryptocurrency is added to the crypto exchanges, and trading starts, the price of a particular cryptocurrency may rise or fall depending on its acceptance by the traders. The price fluctuation depends on the investment, volumes of trading, and the adoption of the cryptocurrency by the people and the merchants.

• Excepting a new type of cryptocurrency called stable coins, all cryptocurrencies possess volatility in their price cap. No crypto expert can predict the future price of a cryptocurrency. Under that criterion, cryptocurrencies perform speculatively more like stocks.

Image Source: Mathieu Stern on Unsplash.

Stocks and cryptos are twin investment tools investors like to play with

During the first quarter of 2022, one of my techy friends in the US repented on the phone. He told, he won't forgive himself for not withdrawing the investment from his stock holdings, i.e., for not selling the stocks when the price was higher. It seems he lost more than a million US dollars in the stock market recently!

• The same things happened to most crypto investors during the current crypto market crash. Nothing can be done for the investors who aspire to speculative gain for their crypto holdings but cry for their lost funds after the market crash.

It is not difficult to recognize stocks and cryptocurrencies as similar investment instruments that solely rely on speculation and market hypes.

• Expert investors are mentally tough to bear with the speculative loss in their investment holdings. Expert crypto traders face more challenges than stock investors because cryptocurrencies are not widely accepted in national banks due to government regulations.

But, expert investors are immune to all market crashes. They may enjoy playing with stocks and cryptocurrencies with the same finesse.

Image Source: GIF image created by me using texts from the title and Photos by Precondo CA, Nicholas Cappello, and Mathieu Stern on Unsplash.

Closing remarks

Cryptocurrencies and stocks are twin investment tools that may give rise to mental distress to the investors. There is no way out to get gain without experiencing the pain. I think it is an open secret.

• But, stocks and cryptocurrencies use radically different technologies.

• Cryptocurrencies mostly use decentralized processing of transactions.

• Stocks use centralized processing of transactions.

Expert investors probably enjoy the agony part of the game and smile at the end if they are successful in extracting huge profit after the recovery of a dying stock and crypto market.

Incidentally, I don't enjoy playing with the two.

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Postscript

• I never invested in stocks or ever tried to learn stock trading.

• I learned the technology of cryptocurrency but never invested in cryptocurrencies.

I believe there are more useful use cases of blockchain and distributed ledger technologies than financial applications, i.e. cryptocurrencies.

• I will invite the bloggers here and in the crypto-blogging platform to come out and look at the wide horizon of content publishing, technology, and life.

• More importantly, build a personal brand outside the crypto-blogging arena.

One choice will be to "Setup a New Chapter on LinkedIn" and start intensifying the presence of your digital identity in cyberspace.

My name is not 'Unity,' but I promote the unity of humanity

• I am a hands-on technology researcher and contribute to the overlapping areas of STEAM (Science, Technology, Engineering, Arts, and Mathematics).

• I  have worked on cybersecurity and information security, specifically graphical authentication security.

• I am moderately active on "LinkedIn" and a budding Podcaster.

• I love creating content on "ReadCash," "NoiseCash," and I also publish blogs in other spaces, such as Publish0x.

If you have some free time, try exploring "Learning Times" and other channels on Odysee-dot-Com and earn crypto coin LBRY Credit or LBC for consuming and creating content.

Cheers!

Unity (Debesh Choudhury)

Text Copyright © 2022 Debesh Choudhury — All Rights Reserved

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Lead Image: I have created a GIF image using texts from the title and Photos by Precondo CA, Nicholas Cappello, and Mathieu Stern on Unsplash.

All other images are either drawn/created by myself or credited to the respective artists/sources.

Disclaimer: All texts are mine and original. Any similarity and resemblance to any other content are purely accidental. The article is not advice for life, career, business, or investment. Do your research before adopting any options.

Unite and Empower Humanity.

June 29, 2022

#cryptocurrency #stock #investment