The Essentials of Crypto as a Digital Asset

Before the Bitcoin price went public, Lawrence Samantha, who currently serves as Founder & CEO of a cryptocurrency investment platform called "Nobi", was already interested in studying this digital asset based on blockchain technology. With a programming background, he began to explore the various types of digital currencies until he finally believed that crypto was the most perfect digital asset.

However, behind the perfection of crypto assets, there are many things one must learned in order to understand the whole process. Although crypto assets in Indonesia are currently limited to commodities, there are already several platforms that offer easy ways to profit from various types of crypto assets, one of which is Nobi.

In addition, Lawrence also said some other reasons to encourage people to invest in crypto assets. The decentralized technology on top of the blockchain platform allows users to monitor movements and carry out transactions without intermediaries, in other words, this technology offers a more transparent system. In terms of price, one of crypto's many variants, Bitcoin, is referred to as the asset with the highest increase over the last 10 years.

Several facts mentioned above will sound tempting to some people. However, with all the advantages it has to offer, it is important to learn the whole practice of crypto as a digital asset.

Risk profile and high volatility

With the high level of security offered, crypto assets are also known to be highly volatile, meaning the price can go up rather quickly and then suddenly drop as well. Then, the question arises, are crypto assets suitable for the market in Indonesia?

Quoting from Coindesk, "Crypto markets are volatile because there’s no central authority to stop them from being so. Crypto asset prices, therefore, can be assumed to represent investor sentiment more fairly. This hints at what a “pure” market could look like."

Lawrence also said that Indonesia is actually quite behind in terms of crypto assets with only 2% understanding rate, while there are more than 10% of people who have used this product in the United States. Regarding high risk, Lawrence emphasized, "All investments will have high risk if we're not willing to learn."

Crypto's variants

The Ministry of Trade (Kemendag) recorded that crypto asset investors as of May 2021 have reached 6.5 million people with a transaction value of IDR 370 trillion. It has exceeded the number of capital market investors on the Indonesia Stock Exchange. This proves the high interest of Indonesian people to invest in crypto assets.

There are more than 3,000 types of crypto assets circulating around the world, and there will be more in the future. Recently, CoFTRA published a list of 229 crypto assets allowed to use for trading in Indonesia. Some of the popular types are include Ethereum, Dogecoin, Ripple, Stellar and the most used is Bitcoin. There are only 21 million bitcoins worldwide.

Among the many crypto assets with high volatility in circulation, it turns out that there is a category of stablecoin. Quoting from Coinbase, Stablecoins is a digital currency that are pegged to a "stable" reserve asset such as the US dollar or gold. Stablecoins are designed to reduce the volatility associated with non-pegged cryptocurrencies such as Bitcoin.

Continuous lesson

When we started something, there are always some must-followed learning processes. It is similar to when the internet's first penetration in Indonesia, not everyone understands how to use it. However, as time goes by and the benefits are getting real, people are increasingly interested in learning further.

It is not much different with crypto assets, which are also referred to as investment alternatives in this digital era. In terms of technology, there have been a lot of innovations that have emerged in the last ten years in the cryptocurrency industry. More derivative products are delivered from crypto as digital assets. This shows that the more people who are involved in this industry, the more innovation will be present.

As someone who has studied crypto assets from the beginning, Lawrence advised that everyone who wants to get into crypto asset investing must be willing to learn. Understand the most fundamental in investing and its products [crypto assets]. Recognize its nature and continue to monitor its movements. That goes with the saying that represents if you don't know it, how would you love it.

–Original article is in Indonesian, translated by Kristin Siagian

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