A bumpy stock market and an increase in geopolitical tensions have recently pushed investors to safe investments such as gold or government obligations-but what about cryptocurrency?
Bitcoin, the pioneer digital currency, has just left a record year, exceeding $ 100,000 for the first time in 16 years last December.
He has experienced a mad race since, briefly falling as low as $ 75,000 earlier this month for anxiety about a trade war. The price recently rebounded, exceeding $ 90,000. But its notorious volatility does not mean that it cannot be part of a traditional investment strategy, according to supporters.
“In some ways, it is more risky not to hold crypto, what a financial advisor would look like, you should have actions. You should have obligations. You should have real estate ”, said Ben Weiss, co -founder and chief executive officer of Coinflip, a cryptographic feature supplier, to post.
“I think Crypto has come to the point where it is a key element of any wallet,” he continued.
However, diving into the cryptocurrency world can be intimidating. There are apparently infinite options – Bitcoin, Ethereum, XRP – and a lot of jargon, blockchains with smart contracts.
If you are ready to make your first cryptocurrency foray, here are the bases you will have to know.
What is cryptocurrency?
The first step, as most crypto experts will tell you, is to educate yourself – start with the basics and work to understand what makes the cryptocurrency unique.
As its name suggests, cryptocurrency is a form of digital money. But unlike the US dollar, cryptocurrency can record and transfer the value without counting on banks or the government for its value.
“It’s entirely online. It’s done for the internet,” Weiss au post. “It is without border and secure by the code instead of a centralized third party.”
This borderless nature makes cryptocurrency more accessible, in some respects, than regular currencies.
Anyone with an internet connection can participate, and they can easily be transferred from one user to another country.
Take transfers in a bank, for example. If you want to send $ 100 to someone to another country, it takes time and the approval of the bank. But you can send $ 100 crypto to anyone in the world with a click of the button.
The American stablecoins “have helped many people in South America, in particular Argentina, with inflation and a lack of confidence with their government and their banks,” said Delv director, who builds cryptographic infrastructure.
Stablecoins are forms of cryptocurrency which are generally fixed to a traditional goods or currency, such as the US dollar.
“The Argentinian peso was inflated by almost 60%, and they could not trust their government or their banks to hold their money, so they stored US dollars under their pillowcases and their mattresses,” St. Louis told post. “What the Stablecoin United States really allowed them was to control its own money and be able to spend it freely, and it has really become popular there.”
Here are some popular cryptocurrencies:
- Bitcoin
- Ethereum
- Xrp
- Solara
- Cardano
How does it differ from digital money?
The concept of digital species could sound certain bells. Think of Paypal, Venmo or even Credit Cards.
But unlike these other forms of digital currency, cryptocurrency is not set for anything “tangible”, such as gold, money or a fiduciary currency.
Some inherited investors – such as Warren Buffett, “Oracle of Omaha”, 94 years old – have sworn not to invest in crypto, partly for this reason.
“In terms of cryptocurrencies, in general, I can say with almost certainty that they will take a bad end,” said Buffett in an interview of 2018. He once compared digital currency to “Rat poison” and swore his business, Berkshire Hathaway, will never have a position.
But cryptographic loyalists will argue that in the end, more traditional investments and currencies are not fixed to everything that is in fact more tangible.
“There are only 21 million bitcoin that will never be in circulation,” Weiss at the post. “It is one of the most difficult assets on the market.”
“I would say that the dollar is not linked to anything, except full faith and credit of the US government,” he added. “Gold is a rock. Yes, people use it in jewelry, but it is not where it derives its value, so Bitcoin is most like a digital gold.”
The name of the game during investment in the crypto is to keep and let it accumulate as a cover against inflation and the bad government – not spending it for a coffee at Starbucks, advise experts.
“This is an accumulation in America. They look more, how can I get Bitcoin? Instead of, how can I go Bitcoin? ” Chris Kline, co-founder and head of the Bitcoinira exploitation, a crypto retirement platform, told post.
“Where could we be in the next five to 10 years, how to use Bitcoin I have to pay my bills and do other things?”
Are you curious crypto?
How to start crypto trading today
Download a confidence exchange application – Start by choosing an approved crypto exchange. We recommend that you start with the Best portfolio applicationAvailable for iOS and Android.
Create and check your account -Register using your email, Google or your Apple ID. To complete the registration, you will have to check your identity with an identifier issued by the government and activate two -factors (2FA) authentication for more security.
Finance your account – Place money on your account by linking a bank account or a credit card or even using gift cards. Choose an option that best suits your lifestyle.
Buy your first cryptocurrency – Use the application or exchange market to buy Crypto by entering the Ticker symbol – like BTC for Bitcoin or ETH for Ethereum – and follow the prompts to finish the transaction.
Choose how to store your crypto – Decide if you will keep your crypto in the exchange, move it to a digital wallet (hot wallet) or keep it offline (cold wallet) for additional protection.
What is a blockchain?
A blockchain is the fundamental layer on which cryptocurrencies are seated. It is a digital and unexpected register that can record, check and transfer data.
In addition to being highly secure, it is a public file that follows each crypto transaction, although it leaves investors involved in each anonymous exchange.
Although most known for their use in crypto investment, companies around the world use blockchains in several ways – including “the supply chain, real estate recordings … Food traceability, authentication … Logistics, identity and data transfer,” Weiss told post.
Walmart, for example, has a blockchain partnership with industry leaders like Dole, Kroger, Nestlé and Tyson Foods. It uses technology to trace more than 25 products from up to five different suppliers.
Blockchains become more popular among food giants, which can use technology to closely monitor salmonella epidemics and other bacteria.
The Beers group used Blockchain Tech to follow 100 precious diamonds along its complex supply chain, from mines to a store, while the global giant of the Maersk expedition used the large digital book to follow cargo cargo and containers.
What is a digital portfolio?
A digital portfolio is where you store your cryptocurrency once you have started to invest.
The two main types are hot wallets and cold wallets, which have different levels of safety.
Hot portfolios remain connected to the Internet at any time, so it is faster and easier to make transactions, but they are more vulnerable to cyber attacks.
Cold wallets are kept offline, so there is stronger security. However, if you take this route, you must be sure you never lose your portfolio address – a unique chain of letters and figures that allows you to access your investments. If you write it on a slip of paper that disappears, that’s all – you will have no way to access your cryptocurrency.
Here are some popular digital portfolios:
What is an intelligent contract?
Intelligent contracts, which are most often associated with Ethereum, a form of cryptocurrency, are the programming language which acts as self-executing contracts on a blockchain.
When certain conditions are met, the contract is executed. Take, for example, a Paris contract which automatically attributes to you cryptography after winning a bet, said Weiss.
