As technology evolves at an ever-rapid pace, we Trinbagonians find ourselves at the forefront of it. Not only does this evolution have the ability to revolutionize our productivity and efficiency, but it also presents itself as one of the best investment opportunities. This blog aims to explain what digital assets are, why you should consider investing in them, how to go about investing and considerations of the digital asset space specific to Trinidad and Tobago.
What are Digital Assets?
Digital assets are intangible assets that exist solely in a digital form. They include cryptocurrencies like Bitcoin and Ethereum. These assets utilize decentralized technology such as blockchain, which enables secure transactions while providing the ability to access transaction-related information. This decentralized nature ensures that only your permission is required for any transaction to take place.
There are three main types of Digital Assets:
1. Cryptocurrencies: Bitcoin, Ethereum, and Litecoin are some of the most well-known cryptocurrencies. These digital currencies serve as alternatives to traditional money and are gaining traction as means of payment and investment globally.
2. Security Tokens: Security tokens represent ownership in real-world assets such as real estate, company stocks, or other financial instruments. They offer investors fractional ownership and are subject to securities regulations.
3.Utility Tokens: Utility tokens provide access to a specific product or service within a blockchain ecosystem. They are often used to crowdfund projects through Initial Coin Offerings (ICOs).
Why should you invest in digital assets?
Well, they are one of the fastest-growing asset classes in the world. Bitcoin, for example, has obtained an annual return of 73% since its inception. While the risk associated with digital assets is high, once you effectively manage that risk, they can become one of the highest return investment options.
The decentralized nature of digital assets allows anyone, regardless of their financial status or origin, to invest as long as they can find a willing seller. This also means transactions can be conducted from anywhere in the world at any time, and you have complete control over those transactions.
Furthermore, digital assets can be used to pay for tangible, real-world goods, provided the vendor accepts them. You can even accept digital assets as a form of payment in your business. Once you own some digital assets, you can trade them, similar to stocks or forex trading, if you're feeling adventurous and willing to take the risk.
How can you invest in digital assets?
It's actually quite easy with the assistance of Sunshine Exchange. If you wish to purchase Bitcoin, you can follow our "Getting started with Bitcoin in Trinidad and Tobago."
For other digital assets, you can refer to our "Getting your first Crypto in Trinidad and Tobago." All you need to do is find a digital asset wallet, such as Binance, purchase a stablecoin from us, and then use the stablecoin to purchase the desired digital asset.
Considerations for Digital Assets in Trinidad and Tobago?
Digital assets do have the potential for fraud and misuse. Because digital assets are not regulated by governments or financial institutions, nor are they verified by any other centralized entity, they can be used for illegal activities such as money laundering and financing terrorism. This has made many people and organizations wary of digital assets, especially most Trinidad and Tobago banking institutions. You may find it difficult or impossible to open or use an account that is associated with Digital Assets in any facet.
Government and financial bodies notably lack understanding of the mechanisms digital assets employ to function, as well as several of their positive use cases. As a result, there is a failure to pass adequate laws to properly integrate their uses and protect citizens. Financial bodies often outright refuse to service customers who wish to use digital assets through official means, such as buying them on a major digital exchange like Binance.
Despite these major concerns, some businesses in Trinidad and Tobago have begun to accept digital assets as a form of payment. For example, a local restaurant may allow customers to pay for their meals using Bitcoin. This is because digital assets offer several advantages over traditional forms of payment, such as credit cards.
As more businesses and individuals begin to use digital assets, it is likely that Trinidad and Tobago will eventually adopt them as well. Notably, countries such as China and regions such as the EU are beginning to use digital assets in official capacities and/or passing legislation. However, it will require a shift in mindset and education to fully understand and embrace this new technology, especially in Trinidad and Tobago.
