Getting to Know Crypto Assets and Their Functions
Getting to Know Crypto Assets and
Their Functions
Although it is no longer
a new thing, in recent years the conversation about crypto assets has grown
bigger and bigger. One of the skyrocketing popularity of crypto assets is based
on the number of influential figures abroad who promote their preferred type of
token as an investment in
the future. The uniqueness of
crypto assets is often reported as one of the factors that can bring huge
profits to investors. However, behind these advantages, there are risks that
deserve to be understood more deeply. Then what is a real crypto asset?
Definition and function of crypto assets
In general, a crypto
asset or cryptocurrency is a digital currency. The main purpose of this
cryptocurrency is as a medium of exchange for transactions carried out online.
Regarding its own security, cryptocurrency transactions, both buying and
selling assets and transactions using cryptocurrencies, are protected by
cryptography or secret passwords as part of their security.
The transaction process
is usually carried out in a peer to peer manner, which connects one device to
another on the internet without a server. In other words, the owners of
cryptocurrencies are free to transact to anyone without a third party
regulating their turnover. Even so, all forms of transactions made are still
recorded and monitored by a network of crypto assets known as blockchain.
Blockchain itself is a
computing system that underlies the formation of existing crypto assets.
Functionally, blockchain exists for blocks that are interconnected with each
other that record asset transactions and business networks online. Not only
noting, the blockchain also distributes information on transactions that take
place around the world to cryptocurrency owners who want to see it. However,
the information is confidential and only appears a code as the identity of the
perpetrator of the transaction.
The development of crypto assets
According to its own
history, this cryptocurrency has actually been developed since 1983 by David
Chaum in the United States. At that time, David Chaum introduced cryptographic
electronic money which could only be used in 1995 with the creation of
Digicash. But at that time, people who wanted to transact had to have special
hardware and software that limited many people from using it.
It wasn't until 2009
that Satoshi Nakamoto introduced Bitcoin as the first decentralized
cryptocurrency. This allows the cryptocurrency created by Satoshi Nakamoto to
be used on various platforms without having to require special devices except
the internet network. With the acceptance of these cryptocurrencies on various
digital platforms, it has finally paved the way for the emergence of other
crypto assets to date.
Crypto asset regulation in Indonesia
In Indonesia itself,
crypto assets owned by anyone cannot be used as a means of payment. However, if
you are interested, investing in crypto assets is still allowed. This is
explained through the Letter of
the Coordinating Minister for the Economy Number S-302 / M.EKON / 09/2018 concerning the Follow-up implementation of the
Coordination Meeting on Crypto Asset Regulation as a Commodity Traded on the
Futures Exchange.
Based on the Letter of
the Coordinating Minister for the Economy, crypto assets are considered
commodities that can be traded on the futures exchange. This is done based on
consideration of the potential for large investments that can help economic
development in Indonesia. This crypto asset investment is also further carried
out under the supervision of the Commodity Futures Trading Supervisory Agency
(Bappebti).
Through Bappebti
Regulation Number 5 of 2019, it is explained that crypto assets are intangible commodities in the form
of digital assets that are traded as investment
instruments. Regarding crypto
assets that cannot be used as a means of transaction, this has actually been
regulated through Law Number 7 of 2011 concerning
Currencies. In the Law, it is
explained that the legal tender in Indonesia is rupiah currency. In other
words, crypto assets cannot be used as a means of payment in Indonesia. The
only way to be able to transact is of course by converting the crypto assets
you own into rupiah.
Crypto asset risk
Even though it is
considered safe with a security system based on cryptography, crypto assets as
investment instruments still have their own risks. The risk is explained by the
Financial Services Authority (OJK) based on an alert from the national media. OJK
explained that the value of cryptocurrencies is volatile and uncontrollable.
This leads to increases and decreases in the value of cryptocurrencies that can
occur at any time and for no apparent reason. In addition, OJK also does not
supervise and regulate crypto assets. These risks must be understood by the
Indonesian people before starting to invest in large values.
Alternative investment instruments
For those of you who
feel that crypto assets can present great risks for your financial condition,
it would be nice if you continue to use investment instruments that were first
popular in Indonesia as an activity in seeking investment that can generate profits
in the future. These investment instruments include bonds, deposits, and mutual
funds. Let's get to know the three investment instruments.
Bond
As one of the popular
investment instruments in Indonesia, bonds are an investment in the form of debt statements
issued by the government or corporations. However, it is not uncommon for the
debt statement to be issued by individuals. In the bonds issued, there is a
statement that every purchase of assets from these bonds investors are entitled
to interest as a form of ownership. The interest is as a profit from the value
of assets owned by bond investors.
Warehouse
Deposits
are one of the investment
instruments that are no longer unfamiliar to most Indonesians. Basically,
deposits have a function similar to savings as a means of storing funds. When
you want to keep funds on deposit, you can choose a tenor or period that can be
adjusted to your needs. Deposits have a relatively larger percentage of
interest than ordinary savings. Based on the selected time period, later you
can take back the investment capital and the profits that will be obtained from
the deposit program.
Mutual funds
Similar to crypto
assets, mutual funds are one of the investment instruments that have increased
in popularity in recent years. Especially among young people. Mutual funds
themselves are an investment product in the form of a collection of funds that
are managed as investment capital to be converted into various types of
products, such as stocks, bonds, and other financial and investment products.
The funds raised are managed by an investment manager, a management or
professional institution tasked with managing your investment activities.
For those of you who are
interested in starting to invest, mutual funds can be the investment instrument
of choice. In facilitating investment activities, you can buy mutual fund
assets through CIMB Niaga. CIMB Niaga is an officially registered mutual fund
selling agent and is committed to offering convenience to you in making
investments with a period of time and risk as needed.
You can get one of these
conveniences through OCTO Mobile. This digital
banking product from CIMB Niaga makes the investment process
feel much easier. The reason is, OCTO Mobille allows you to invest anywhere and
anytime. For more information about mutual fund investment through OCTO Mobile,