I usually write about internet marketing in this blog but in the digital sphere there is this one topic that I just cannot simply miss out when it comes to making money online.
That topic is cryptocurrency.
Cryptocurrency is more like an investment than marketing but the way it has been rapidly developing over the last couple of years is simply too much for me not to take notice.
I have done my homework reading everything about cryptcocurrency and I kind of understand now why it is going to be something very big in the future.
So, in this article, I am going to try to summarize everything I have learned about cryptocurrency and why you should seriously take a look into it. The world of cryptocurrency is so vast and constantly changing that I might also write several article series for the next couple of days to cover every single scope and aspect of this mysterious yet exciting digital currency world.
Before we begin talking about why you need to invest in cryptocurrency, you will first and foremost need to adopt the right mindset in place. What does having the right mindset mean?
Having the right mindset means being open minded, thinking positive and not whining or complaining after making a decision and being accountable for the choices you have made.
Complaining and whining won’t get you anywhere. The market doesn’t care about your complaints, because the market will always be the market. Over the last couple of months, cryptocurrency have become a global phenomenon to many and has taken the world by surprise.
While not everyone understands the cryptocurrency realm and how exactly the system operates, banks, governments and companies are well aware of its importance as the cryptocurrency market cap is very volatile where the value of a crypto coin may reach thousands of dollars.
Therefore, it would be such a waste if you choose to ignore what is currently happening in the market when there are countless opportunities for you to pursue.
To have the right mindset to begin with, firstly you have to be excited to start! If you know how vibrant the world of cryptocurrency is, you would want to start right away.
How can you start investing in something you have completely no interest in? When you venture into an investment without the feeling of excitement or eagerness, it will reflect on the money you’ve earned. You will only feel a lack of fulfillment and worse still, it is as if you are being forced to do something you do not like.
There are two important principles in order for you to have an investor’s mindset:
- Focus on opportunities, not problems
- Take action and stick to it, don’t succumb to fear
Let’s focus on the first principle, which are opportunities vs. problems.
Many investors can come up with a 100 problems but can’t even think of single opportunity. For instance, “It’s impossible to understand the whole cryptocurrency system” and “the cyrptocurrency values are very volatile and I might lose all my money,” or simply “I don’t have time to invest“.
We know where this is heading. It is true that sometimes there are so many obstacles that it becomes difficult for us to identify opportunities. However, do not let your challenges discourage you from exploring the rich market of cryptocurrency.
If you knew of the countless opportunities available, you would never complain and be pessimistic of the drawbacks as you would probably overcome them.
The second principle is to take action.
A great mindset would be meaningless without action. Fear will not get you far, and fear will always be your limiting factor in taking that leap of faith. You have to start now. So remember to be firm in your choices, believe in what you pursue and make a difference in your life!
What Is Investment?
The word investment simply means the action of investing money for future gains. Your future gains can be in the form of assets or stocks and also cryptocurrency, which you purchase with the intention to generate passive income. Your assets value may appreciate in the future. Once you’ve made a conscious choice to invest, you are no longer working for money. You are actually making money work for you.
For those who choose to not invest or do not possess the awareness to do so, their monthly cycle would probably go like this. You are a full-time employee working the hours to complete the task given to you by your superiors. Sometimes, you would also need to work extra hours to compensate for the extra workload.
By the end of the month, you are then given a substantial amount of pay as a form of reward. Nothing wrong with that, but do you really want to live a mediocre life and just making ‘enough’ to live by for the rest of your life?
That is why you would need to devise a new plan to lead the life that you desire, to create not only financial stability but also sustainability. Instead of creating duplicates of yourself, which you can’t, you will need to find a way so that your money can work for you.
Even if you still choose to keep your 9-5 job, your money from your investment is working for you as well.
You will be rewarded by having extra money in your account. This is one of the greatest way to maximize your potential to earn more and you don’t even need to receive any raise working overtime or even hop from one job to another for it. In the end investment is the key factor in putting your money to work, without you having to compromise your hours.
Why Should You Invest?
You don’t just decide why you want to invest. Well, obviously you want more money. Everyone does. But what defines your investment? Why do you even invest? You have to be clear of this, so you now where you are heading, and devise a strategic plan to get there.
Some people would want invest to save for their retirement. Those days when everyone worked similar jobs for a span of 40 years and retired to a nice pension are gone. These days, it’s more than that. With the cost of living increasing day by day, it’s vital for you to realize that being solely dependent on your pension would realistically not be sufficient to sustain your future.
You should be investing to save more money for your retirement. You can start now by optimizing your retirement savings into a series of investments. Then, you would surely see the results during your retirement age, by living off the funds you gain from these investments.
Many of us invest because we want to attain a certain financial goal. In that goal, investment plays a huge role to help you earn it. Either you want to start your own business, have your preferred lifestyle, buy a luxurious car, own a bungalow even – it all starts with your action to invest. Hence, it is imperative to know why you really want to invest.
Remember; don’t invest solely because of money, it is important to have passion in doing it. So, make sure you get your intentions right and have fun in doing it! Investment would not seem as a chore, or that daunting when you know how to have fun.
What Is Cryptocurrency?
This is one of the most frequently asked questions out there. What is cryptocurrency? To make it simple, cryptocurrency is a digital version of money where the transactions are done online. A cryptocurrency is a medium of exchange just like your normal everyday currency such as the USD, but designed for the purpose of exchanging digital information through a process known as cryptography.
The first ever-successful cryptocurrency emerged from the invention of Bitcoin, by Satoshi Nakamoto. This was then followed by the birth of other types of crytocurrencies competing against Bitcoin.
Why Cryptocurrency Investment?
The reason why cryptocurrencies are such in demand right now is because Satoshi Nakamoto successfully found a way to build decentralized digital cash system. What is a decentralized cash system?
A decentralized system means the network is powered by its users without having any third party, central authority or middleman controlling it. Neither the central bank, nor the government has power over this system.
The problem with a centralized network in a payment system is the so called “double spending”. Double spending happens when one entity spends the same amount twice. For instance, when you purchase things online, you have to incur for unnecessary and expensive transaction fees. Usually, this is done by a central server that keeps track of your balances.
Apart from cryptocurrency being very secure and is run through a decentralized network, there are other properties which projects why cryptocurrencies may be the most talked about topic in town. It is now viewed as an emerging investment vehicle.
Have you heard of Erik Finman?
He is the teenage Bitcoin millionaire who started picking up Bitcoin at only $12 a piece back in May 2011, when he was just 12 years old. He received the Bitcoin as a tip from his brother and a $1000 gift from his grandmother.
He now reportedly owns 403 Bitcoins, which holds a value of roughly $2,600 where it has accumulated to a stash of $1.08 million and change.
What Can Cryptocurrency Be Used For?
Cryptocurrencies can be spent for different purposes and the best part is, all transactions are completed online. There are 3 different transactions that can be performed when using cryptocurrency:
- Bitcoin Trading: Bitcoin trading can be very profitable for both professionals and beginners. The market is new, where arbitrage and margin trading is widely available. The currency’s high volatility has also played a major role in bringing new investors to the trading market.
- Personal Spending: You can use Bitcoin to purchase almost anything! From buying cars to travelling the world.
- Crowd Funding: Cryptocurrency also provides the chance for you to give back to society. How? By crowd funding. You are able to be part of someone’s success story by donating to a crypto crowd funding project.
The Types Of Cryptocurrency
There are over 800 cryptocurrencies, but we will only discuss the top 5 prominent currencies in the market.
The 5 cryptocurrencies are Bitcoin, Ethereum, Litecoin, Monero and Ripple.
For this article, we are going to cover only two of the Cryptocurrency – Bitcoin and Ethereum.
This is the first ever cryptocurrency invented and remains by far the most sought after cryptocurrency to date.
Bitcoin is known as the digital gold standard in the cryptocurrency network. As explained in the previous module, Bitcoin is the pioneer of Blockchain Technology that made digital money possible.
It is the first ever decentralized peer-to-peer network powered by its users without any central authority or middleman which means, no unnecessary costs are included in the digital money transaction.
Over the years of Bitcoin’s existence, its value has fluctuated tremendously from zero to over $2000 per bitcoin to date.
Its transaction volume has also reached 200,000 daily transactions.
One major advantage that it has over other cryptocurrencies is bitcoins are impossible to counterfeit or inflate.
The reason being there are only 21 million bitcoins created for mining, no more no less.
Therefore, it is predicted by 2140, all bitcoins will already be mined.
Thanks to its blockchain technology, you have ultimate control over your money and transactions without having to go through a third party such as the bank or Paypal.
Bitcoin transactions are also impossible to be reversed.
Therefore, you should only deal with trusted parties as Bitcoin is also used as a means for cyber-crime like dark net markets or ransomware. Next is another widely-used cryptocurrency in the market.
Created by Vitalik Buterin, it has scored itself the second spot in the hierarchy of cryptocurrencies.
This digital currency launched in 2015 is predicted to surpass Bitcoin and may be the cryptocurrency of the future. Ethereum is currently worth $279 since its launch.
Is Ethereum similar to Bitcoin?
It is in a way, but not really. Like Bitcoin, Ethereum is a part of a blockchain network.
The main difference between the two currencies is that Bitcoin blockchain focuses on tracking ownership of the digital currency while Ethereum blockchain focuses on running the programming code or network.
Instead of having to build an entirely original blockchain for each new application, Ethereum enables the development of thousands of different applications in a single platform.
In the Ethereum blockchain, miners work to earn Ether. Ether is a crypto token that helps run the network.
Another use of the Ethereum blockchain is its ability to decentralize any services that are centralized.
For instance, Ethereum is capable of decentralizing services like loans provided by banks, online transactions using Paypal as well as voting systems and much more.
Ethereum can also be used to build a Decentralized Autonomous Organization (DAO).
A DAO is a fully autonomous organization without a leader.
DAOs are run by programming codes on a collection of smart contracts written in the Ethereum blockchain.
DAO is designed to replace the structure of a traditional organization and like Bitcoin, eliminating the need for people and a centralized control.
What are the most obvious benefits of Ethereum?
Firstly, a third party cannot make any changes to the data. The system is also tamper and corruption proof.
This is because Ethereum is built based on a network formed around a consensus as a result, making censorship impossible.
Secondly, just like Bitcoin, Ethereum is backed up by secure cryptography. Therefore, the applications are well protected against any form of hacking.
Why Buy Cryptocurrency
As a digital asset that serves users online, Cryptocurrency has many appealing benefits.
Some of this is thanks to the Blockchain Technology previously mentioned.
It is a strictly monitored process with encrypted transaction and control thus, making this online money a thing for the future.
There are 4 top advantages of Cryptocurrency but for this report, we are going to talk about only 2.
No Third-Party Involvement
The first advantage of Cryptocurrency is its well-known ‘No Third-Party Involvement’.
There’s always a pattern when using traditional money to buy yourself a new property, setting up your own business, or buying a new car.
One way or another, the process requires a third-party involvement. We are talking lawyers, owners and some others external factors such as, delays, documentations and extra fees.
This in general will consume unnecessary time, money and energy to the point of giving up.
A good example of this scenario would be you buying a new house. You need to pay the Financial Advisor who in general, advise your financial statement to ensure you are have a stable income.
Some property requires you to pay for a booking fee to ‘lock’ your house of choice and many other add-ons. In short, there’s a lot of third-involvement and it charges you even before you own the property.
But that is not the case with Cryptocurrency. As mentioned previously, the blockchain system is similar to self-rights database.
The contract is capable of being design and enforces to remove any involvement of the third-party mentioned before. Moreover, the contract can be customized to complete a certain transaction at a set date at a fraction of any expenses.
Yes, you can eliminate any third-party involvement options, in fact, you don’t even need one.
In short, you are in control of your own money using Cryptocurrency.
This is what we call the ‘Decentralized’ system, which means there’s no ‘Central or Federal Government’ regulating it for you.
Your transaction is practically immune to any influence from your government and its distinct manipulation.
So, it is possible to be able to pay and receive money anywhere in the world at any given time.
That transaction is done with minimum processing fees, thus preventing users from having to pay extra charges from banks or any financial institutions.
Lower Risk Than Traditional Currencies
Another prominent advantage of Cryptocurrency is its risk is lower than traditional currencies.
In this era, most people rarely have their cash in their possession now. Instead, they have an array of credit cards, debit cards and other payment cards available as their nations’ method of payment.
Nothing’s wrong with that, except however if the store’s connection to the server is disconnected or their machine is out of service, and you who do not possess any cash just ended up holding the line.
The thing about these cards are, any purchase you are making, you are giving the end-receiver access to your full-credit line. No matter how small the amount of the transaction is, the fact that you are giving someone your card to gain access to your account is already a form of ‘breach’.
Most of this ‘breach’ is considered secure nowadays using differing safety measures like ‘PIN enabled’ or ‘Pay wave’ methods.
Then, the store initiates payment by ‘pulling’ the designated amount from your account using the information provided within your card.
Cryptocurrency doesn’t work that way. Instead of a ‘pulling’ mechanisms, it ‘pushes’ the amount that needed to be pay or receive to other cryptocurrency holder without any further information needed.
Payments are possible without your personal information being tied to you the transaction. Your account can be backed up and encrypted to ensure the safety of your money.
By allowing users to be in control of their transactions helps keep Bitcoin, Ethereum or other distinguish Cryptocurrency safe for the network.
From the previous sections, I’m sure you already have an idea on how cryptocurrency works and why it is currently trending. The market of cryptocurrency constantly fluctuates and nearly every day new cryptocurrencies emerge and some may even die.
Some investors get lucky and some lose their money.
Yes, the cryptocurrency market is unpredictable and posses a huge risk to their investors. But as predicted by experts, cryptocurrency is here to stay and is already making a known impact on the world of finance.
Institutional investors are starting to purchase cryptocurrencies. Banks and governments are also starting to acknowledge the potential that cryptocurrency holds.
There are already a lot of people buying Bitcoin to prepare against the devaluation of fiat currency.
In Asia especially, the Bitcoin market is flourishing. More and more companies have come across the effectiveness of Ethereum as a Smart Contract or token. This shows how blockchain technology is slowly taking its place in organizations for its security networks.
Cryptocurrency is definitely an investment vehicle worth looking out for. It is no doubt growing in use and acceptance and one day, may emerge as the currency of the future.