Cryptocurrency Q&A
Do you get a promise if you buy bitcoin?
Do you get a promise if you buy bitcoin?
SsangyongSpirited
Wed Jul 17 2024
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answers
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As a cryptocurrency enthusiast and investor, I often hear the claim that buying Bitcoin guarantees a certain return or promise. But the question remains, does one truly get a promise when purchasing Bitcoin? The volatile nature of the cryptocurrency market suggests that no such guarantees exist. Can you elaborate on whether investors should approach Bitcoin with the expectation of a promise, or should they understand it as a high-risk, high-reward investment? Are there any guarantees, either implicit or explicit, that accompany a Bitcoin purchase? I'd like to gain a clearer understanding of this matter.
5 answers
Claudio
Fri Jul 19 2024
As the Director of FDA and Editor of Forbes CryptoAsset & Blockchain Advisor, I have a profound understanding of the intricacies of the cryptocurrency world.
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ShintoMystery
Fri Jul 19 2024
A common misconception when purchasing cryptocurrencies such as bitcoin or ether on exchanges is that one is directly acquiring the digital asset. However, this is often not the case.
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Nicola
Fri Jul 19 2024
Instead, when engaging in such transactions, investors are typically issued a promise or IOU, representing their entitlement to the cryptocurrency. This arrangement effectively transforms the investor into a creditor of the exchange or broker.
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Daniele
Fri Jul 19 2024
This setup is analogous to opening a savings account at a traditional bank. While funds are deposited in the account, they are not physically in the possession of the depositor but are instead held by the bank.
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ZenBalance
Thu Jul 18 2024
Similarly, in the cryptocurrency exchange scenario, investors rely on the exchange or broker to fulfill their promise and deliver the underlying asset at a later point in time. This system of promises and entitlements underscores the complexities of trading in the digital currency market.
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