Today cryptocurrencies are a common conversation topic.
But what are they and how do they work? At Boracay Brokers we want to explain it to you.
A cryptocurrency is a digital exchange asset. It is designed to fulfill the same function as a common currency, with the difference that it operates completely digital.
The method used for its financial transactions is cryptography and its main characteristic is that it’s not controlled or regulated by any institution. In this way, they do not require intermediaries for their operations.
For its control, it’s used a database called blockchain, a technology that allows all operations to be transparently registered.
The first cryptocurrency that began to operate is Bitcoin, and this is still the best known to this day.
More and more people have decided in recent years to start using cryptocurrencies for the advantages that they offer. For example, they don’t leave any trace in their operations, which can be used for identity theft.
Both has been the growth of these forms of payment, as the increase in cyberattacks; Although cryptocurrencies use high and sophisticated technology, they present some vulnerabilities.
The consequence to the fact that they are not regulated by the government, is that their bags don’t offer the same security to store money, as a bank does.
For this reason, a new market was born: the cryptocurrencies insurances. Policies covering up to $ 255 million have been created for those who have suffered cryptocurrency losses due to cyber-attacks.
However, there is still a lot of uncertainty regarding this world of digital currency and, therefore, also the insurance market has not been able to assert itself.
Due to legal loopholes and lack of regulation, many people and companies still distrust this form of payment.
Experts affirm that, to create a healthy and sustainable market in the long term, a more careful regulation is necessary, so that the cryptocurrency insurance market has greater availability and more solutions to offer in the future.
It is undoubtedly an interesting topic that is gaining more popularity in our society.
Boracay Brokers, insurance by nature.