Cryptocurrencies have seen more than their fair share of news over the past few years from 2017 and through 2018. Bitcoin saw a price movement from $1000 all the way to $20,000 before crashing down and resting at the current circa $4,000 level at the time of writing. The constant stream of news, announcements, new tokens, exchange hacks, scams, Ponzi schemes, exit scams, and price volatility constantly draws an incredible amount of negative attention to the blockchain & cryptocurrency space.
If you were one of the lucky ones to learn about blockchain technology and specifically Bitcoin back in the early days, you’re probably a very smart and wealth person. If you’re only starting out now, it’s not to late! When you look at the world from a technology stand point, where we have come from and where we’re going in the future, you might agree that there is much to gain from blockchain technology and decentralisation. Unfortunately, news of the use of this technology and real world adoption is usually drowned out by the noise made by cryptocurrencies and other Decentralised Apps which are built on top of the blockchain technology platform.
People often ask questions about the cryptocurrency market as a whole, rather than an individual token or businesses that make up the sector. The majority of investors coming into the space are often looking for a quick profits on their investments rather than long term returns and often overlook opportunities that different businesses or providers are building in this new asset class. This in turn leads most investors to finding either low value, high risk tokens (s***coins) or falling victim to various scam & schemes that guarantee some form of income. Without the right education, research, and due-diligence these scams continue to thrive.
Compared to other Asset classes in 2017, cryptocurrencies have seen that largest increase in short term profits than any other class over the past few years.
Compared to stocks, bonds, commodities & property, cryptocurrencies in 2017/2018 saw massive increases for investors will to take on exposure to digital assets. During the 2018 year the crypto-space cooled off and entered a bear market cycle which saw many highly leveraged and retail investors loose a lot of money. Punters were buying into every token they could find assuming massive short term returns with very little risk without doing any real due-diligence.
This same phenomenon has happen in many markets in the past when many investors jump in all at once without being prepared or following any sort of investing strategy. Coupled with the low barrier to entry, almost anyone with a laptop, a small pot to invest with & small amount of tech knowledge can gain exposure to cryptocurrencies very easily.
So what is there to learn about cryptocurrencies before getting involved?The real question that should you be asking is:
“Who can i trust in cryptocurrency space?”
”Where is the best place to get myself educated?”
Here are 7 tips to educating yourself with cryptocurrency and blockchain & crypto investment for 2019:
1. What am i actually buying? — Are you buying a position or a trade? Are you buying the actual token? A good way to find and measure this is to check weather you can withdraw the token/coin to your own personal wallet.
2. What are the fees? How does this platform/service make its money?
Platforms that are selling or trading cryptocurrencies need to make some form of income during the buy / sell process. Check these fees out carefully to ensure you’re getting a good deal, and the platform is reputable.
3. So many tokens! Which one? Only invest in tokens with track records and healthy communities and long history of development. Look at coinmarketcap.com for all pricing information and history as well as links to official websites. Use Google, Reddit, forums and articles on good news sites to find relevant information. The TOP 10 cryptos by Market Capitalisation are the ones worth looking into, or, simply stick to bitcoin & Ethereum while you learn more.
4. Where to buy?! Find an exchange that supports your local currency or in one of the biggest pairs thats close to your region. (USD, EURO, GBP)
5. Private Keys / Public Keys? Think of these as your PIN and account number. You’d never ever want anyone to know your PIN, but, when receiving money, you give our your account number to your friends and family in order to receive money. This is the same with private and public keys.
6. I keep hearing the word security? Security is paramount in this space right now. With cryptocurrencies, you are essentially your own bank. There are no middlemen when buying and selling. You can see all transactions on a public ledger. This means that if you loose control of your wallets or private keys, someone else can take your hard-earned crypto’s from you! Get yourself a hardware wallet such as our personal favourite the NANO LEDGER.
7. How Much Should i Risk? Only risk what your absolutely happy to loose. Think of investing in cryptocurrency like a gambling at a casino. While there is value in the asset, and some cryptocurrencies have a finite supply, their could be an instance where prices go to zero in the future.
Currently, blockchain and cryptocurrencies are like the Wild Wild West or like the internet in 1994. Until there is more legal frameworks, legislation, ease of use and real world adoption it will be sometime until prices in the cryptocurrency space see the same sort of levels as we previously experienced.
Have fun out there and stay safe crypto investors!
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