The cryptocurrency market had a good run with its exponential growth this year.
From a total market capitalization of 17 Billion USD for the 600 plus currencies on January first, the market now sits at over 500 Billion USD from over 1300 currencies.
That's 30x growth on the total market cap right there.
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No wonder it has been receiving much attention recently and the public interest doesn't seem to be going away soon.
For those who had been into crypto for a while, I'm sure lots of friends and family have approached you with some questions about crypto. Some would have approached you with words of caution- stay away from cryptocurrency/bitcoin as it is a scam.
The latter I received from an aunt this holiday.
She was concerned that Bitcoin is a scam as she saw a video about a pyramid scam using Bitcoin as their medium. We, @jeanelleybee and myself, attempted to explain cryptocurrency.
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We started with the question-
Why do we accept some printed paper to be of certain value?
We refer to fiat currencies of course. Why are people happy to exchange goods and services for some paper with printed value? This hasn't always been the case. Before, people do straight up trades, like if I have a fruit and you have meat, and both parties are willing to do a trade, then we will happily exchange goods.
From there it evolved to using copper, silver or gold as medium of exchange. Instead of finding a peer whose commodity you'd like, and who would be satisfied with what you have also, people were able to do single trades using gold for example. Sell your goods for gold, then spend your gold as you see fit.
Then we had various fiat currencies- dollars, euro, peso and many more.
What's the commonality of these examples? The community agreed to put value on these items, and everyone recognizes that value.
This is what cryptocurrency is as well. It is in its infancy stage where people are coming together to recognize that these coins or tokens are of value.
If we have a working system, why the need for a new one right, specially with the use of fiat currencies that are backed by central banks?
One goal of cryptocurrencies such as Bitcoin is to eliminate the middle man with our dealings.
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Why do we value middlemen? Because they are the trusted experts in their fields, trust being the operative word.
For example, if you are working overseas and would want to send in money to your family elsewhere, you wouldn't just hand out that money to a random stranger who says they will be flying to the recipient's location and can personally deliver the funds. Instead, you will look for trusted remittance centers because you feel secured to deal with them this way. The remittance center acted as the intermediary between you, the sender, and the receiver.
Of course the remittance centers would be happy to do this for you, for a fee, and within certain timeframe. Normally, if you would want to expedite a process, then higher fees would apply too.
Now, imagine the scenario where a trusted environment has been created, where every transaction is in a public ledger visible to anyone who would care to look. Imagine having the option to send the money yourself directly to the receiver, but still have the same sense of security. Imagine being able to send the funds nearly-real-time.
This is what cryptocurrency, via blockchain technology, offers.
How can one earn via cryptocurrency?
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Bet against Fiat and Cryptocurrency, FOREX-style
Buying and selling say, bitcoin for fiat is very similar to Forex trades, where you foresee which currency will go up against the other. In the Philippines, there are some who buy Bitcoins via coinsph during dip, then convert back to fiat when up, and basically does only this as their trades.
Trade Bitcoin for other coins, Altcoins, Stocks-Trade-Style
Others would be more adventurous with their investment, and would actually trade BTC for other altcoins. Some would do short-term to medium term trades.
Short-term trades can be done in matter of minutes, or days. Normally, traders would set a specific percentage-earning target in getting out of the trade. Traders would usually check prices from time to time (if set to hold for a few days) or would have their eyes glued to the screen for a certain period until a sale has been made.
Invest on Coins Longterm
Hodl is the name of the game.
Basically, select a coin you would want to invest on and you see great potential with, buy the coin and forget about it. The investor would check the prices from time to time, but this is really not a priority as they are in it for the long haul. They also do not mind the price fluctuation and would normally not even consider selling until the coin price is at least 10x. Or something like that.
Invest on ICO's
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Initial Coin Offerings, similar to Initial Public Offerings, allows investors to get in and buy on a new upcoming project. Some would invest on this for a quick flip, meaning as soon as the coin hits the exchanges, they sell the coins for bitcoin or ethereum at a gain. Some, who have full faith on the project they bought into, would keep the coins and would wait for massive gains.
Examples of ICOs to Watch Out For
Mine Crypto
Invest on a mining equipment, pick a coin of your choice, and start mining. The coins earned then can be traded immediately or hodl for longterm.
Cryptocurrency is not a scam per se, but it is true that a lot of people use this medium to fool others. Always proceed with caution, and with the knowledge of the risks involved.
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Very enlightening for us crypto newbies, I'll let that info sink in and just hodl because I don't know any better :P
I have bit coin price approximarly $2983 should I sale it or keep it?
Owning 1 bitcoin 10 years from now will be almost unheard of. I hold onto bitcoin because over the long term it has been more stable than almost any other crypto though start to buy some smaller cap cryptos. If you are looking for more stable currencies that will grow over the next few years then consider buying larger cap currencies. If however you're looking for the type of returns that bitcoin holders experienced the last few years then you may want to consider putting small amounts, such as $100 to $200, into other coins that could possibly give you 10 to 100x returns in the coming years.
First of, congratulations on massive increase on your investment! Yay!
Secondly, I'm not an expert but I think to sell or not to sell depends on what your goal is.
One thing you might want to ask yourself is- what is a gain that I'm comfortable with for this investment?
The answer to this question varies per person, hence some would sell at 20% gain, others would wait for a 10x return.
Some say BTC will go back down to $7k mark. Others say it is on its way to $30k. If you do sell, and in case the price shoots up, don't focus on the opportunity lost, but rather focus on the gains enjoyed.
If you don't sell and the price goes down to $7k, hey you're still at a profit!
Good luck! :)
Yes I think I should invest in other terms. because it is more fluctuating then other businesses.
Loved the kind of approach you have adopted to explain currencies.
Especially, the that statement who" why do give value to a piece of paper? "
It's a great article for the minnows and dolphins to read.
I have to say that I understood crypotocurrencies better
It is specially challenging to explain this to someone who has zero knowledge of crypto and blockchain. I'm glad you think the message comes across well :)
I think the best way to learn about cryptocurrency is to invest in it in small amounts.
You'll then have this natural inclination to research and learn about it in the process.
Again, loved this peice and I'm resteeming it.
Hopefully a lot of Minnows will read it.
I think the best way to learn about cryptocurrency is to invest in it in small amounts.Agree! And thanks again :)
Nice and in depth article! I think you give a good beginners guide to where we are in crypto now, and hopefully the rocket will continue! But of course one should never bet more than one could afford to loose, and always read up on the information white papers so you know what you buy, especially if it’s pre-ico
Yep, I actually started with my crypto journey investing more on ICOs than existing currencies lol. Only later on did I find out that these are actually of higher risk. Research, and the good judgement that comes with it, plays a huge factor if investing on icos.
I believe the crypto market is just getting started, we would see even greater things in the future.
And thanks for your feedback! :)
Great post. Well researched. In some part of where I live, you will be surprised the great number of people who don't know about crypto and doesn't even wanna hear about it. All they know is bitcoin and since their first knowledge of bitcoin was brought to them by ponzi platform which of course no longer operations... They are now yelling
Bitcoin is a scam
I wish they would have interest to even study about it.
I love this post. It's given me great value. Thanks a lot
In some part of where I live, you will be surprised the great number of people who don't know about crypto and doesn't even wanna hear about it.I can so relate! I'm spending the holidays here in my hometown and I don't even know anyone who is into or has heard of crypto (except for the bad publicity it has received recently here where bitcoin was used for a pyramid scam).
As much as we want to help others help themselves through the market maybe, we can only do so much.
Thank you for taking the time to check this out :)
My opinion is to buy a Ripple,while the price of 1 dollar!)
Imagine ripple hundred bucks a piece!
It would be great!)It seems to me that in the future it will 100 $!;)
Upvoted! Here's to 2018 being the biggest year for cryptocurrency yet!
Cheers to that Rina! ^_^
Very important article that all of us need to know. Thanks for sharing the information with us.