2017 was the year when cryptocurrencies became mainstream. Bitcoin lead the race and went from trading for under $1,000 in January 2017 to an all-time high of over $20,000 in December 2017. Now everybody seems to be talking about Bitcoin, with mainstream media running nonstop sensational stories on the subject. It is obvious to me that they don’t have an idea what they are talking about. To get relevant information about cryptocurrencies, you simply can’t rely on sources like CNN or CNBC.
In this article, I will give you some basic information that will point you in the right direction. I discuss this from an investment perspective and will not go into the technical aspects. If you want to learn about blockchain technology (and you should), there are many sources available online.
Here are a few things you need to know before investing in cryptocurrencies…
1. If Bitcoin Crashes, It’s Not Because It’s A Bubble
Can Bitcoin go up to $1 million? Will Bitcoin crash down to $500? These common questions are impossible to answer. Instead, let’s have a look at some facts.
Bitcoin is not a tulip. The tulip bulb bubble is one of the most well-known market bubbles of all times. It occurred in Holland during the early 1600s. Speculation drove prices on tulip bulbs to astronomical levels. Quite often, you hear comparisons between Bitcoin and the Tulip Bulb Bubble in the media. This is not a relevant comparison, because while there was an unlimited supply of tulips, the supply of Bitcoin will always be limited to 21 million coins.
If Bitcoin goes down, it will probably happen because something better comes along. What will happen if the Swiss government decides to launch a SwissCoin, for instance? It could be backed by gold and anonymity would be 100 percent guaranteed (Switzerland values personal integrity). My guess is that the smart money quickly would move from Bitcoin to a currency like that.
It is only a matter of time before a state introduces a cryptocurrency. In Russia, President Vladimir Putin has already expressed interest in a crypto ruble. I wonder what will happen with the economic sanctions against Russia when this new crypto is introduced.
2. Look For Limited Supply And Unlimited Demand
Currently, there are over 1,300 cryptocurrencies available over the Internet. More and more are being introduced through ICOs (Initial Coin Offering). If you want to participate in an ICO, you must be able to screen out interesting candidates that you can take a deeper look at. You do this by answering two questions.
1. Is there a limited supply of this coin? There will never be more than 21 million Bitcoins. That’s an example of limited supply. But there are also coins that have no limited supply. The coin rate can be inflated forever. Don’t even think about investing in such a currency.
2. Is there an unlimited demand for this coin? Does the coin solve a big enough problem that a lot of people have? If it does, then demand for it could become limitless.
Understand that none of these currencies are stocks from a legal point of view. They may look like stocks for the inexperienced investor, but that’s an illusion. This market is completely unregulated. You don’t own a share of a company. There are no annual reports. Scam artists and organized crime are definitely moving in.
I’m certain that 95 to 99 percent of today’s cryptocurrencies will fail within a few years from now. But cryptocurrency is still the future! This sounds like a contradiction, but it is true.
The current market situation is similar to the dotcom bubble during the late 90s and early oughts. Many companies that called themselves Internet companies were nothing more than glorified mail order firms. In some cases, they weren’t even that. They managed to attract billions of dollars in venture capital funding, but eventually the crash came and most of them disappeared.
But even if most of those companies were part of a bubble, the Internet itself was not a bubble. And a company like Amazon was certainly not a scam.
Cryptocurrencies are the Internet of money. The Amazon of cryptocurrencies might be out there right now and trading for around eleven cents. If you find it, you can get very wealthy. But you have to do your homework first. Investing takes time and dedication.
3. You Must Educate Yourself Before You Invest In Anything
The crowd is lazy and ignorant. Instead of reading books about investing, they prefer “stock tips.” And now, they are all running after Bitcoin. I recently saw an online ad for some Bitcoin trading service and it said something like “Buy Bitcoin now before it crashes!” What a brilliant idea! “Book a ticket to the Titanic before it sinks.”
The takeaway here is that you need to educate yourself before you make any kind of investment. But you also need to be very selective with the sources you seek out for your education. Investigate who is behind the information you receive. Think for yourself and think critically. Don’t buy into some bogus scheme that advises you to day trade Bitcoin.
4. Technology Advances Forward, But Human Nature Stays the Same
Warren Buffett says that you should be “greedy when others are fearful and fearful when others are greedy.” This is something that holds true in any market. No government can ever legislate against market bubbles and the crashes that always follow them. Because those events are driven by human nature, there is no way to outlaw them.
In order to make money from cryptocurrencies—or any other financial market in the long term—you’ve got to develop a contrarian mindset. You must be able to go against the crowd without losing sleep over it. The psychological aspects of investing are always the hardest to master.
Read More: How To Make Money Trading Cryptocurrency
I’d like to shill my personal favourite hodling.
If you guys want to gamble on a coin with good 10x or more prospects for 2018, I’d suggest Blockport (BPT).
What is it? Why I like it?
– decentralized crypto exchange (similar to Loopring or IDEX) so your money is never held by a third party. They’ll have fiat/token pairings just like Coinbase and Binance, but ideally they want to have a broader range like Robinhood.
– it will be a social media experience where you can connect and chat with other traders
– first to create a social media trading feature (pay other users with BPT coins to follow their trades)
– confirmed partnership with the Ark cryptocurrency platform
– only 70 million total supply of tokens
– still at a very low 30 million dollar market cap (it’s most similar competitor Binance Coin is currently at around 1 billion dollar market cap)
– They have excellent UX and UI design and their roadmap has consistent milestones throughout 2018 (e.g., beta release in March), with final product release in Q4.
If any of you guys are looking for a good investing/gambling opportunity in the cryptospace, I’d check out Blockport.
Nexus is a GREAT BUY right now at a bit over $2 a pop. Used to be around $15 in the december bull run.
It’s a good tech and the total supply is about the same as Litecoins (55 million).
It will be over $20 each when this coin just hits 1 billion market cap on next big push, and 1 billion market cap is not asking much in the big scheme of cryptocurrency.
You don’t think the markets have already priced those possible aspects?
Honestly, the lack of financial knowledge of the crypto-freaks is astounding. Do you even KNOW what a fundamental analysis is? ..Nothing but speculation with you guys.
“In Russia, President Vladimir Putin has already expressed interest in a crypto ruble. I wonder what will happen with the economic sanctions against Russia when this new crypto is introduced.”
You mean a ruble that is decentralized, mined, and can’t be traced? I don’t think so. Governments will never give up control like that. But a ruble or dollar on centralized, traceable blockchain, sure, I can see that. But sanctions will go on in that case.
Folks. Here is a news flash. Crypto-currency especially Bitcoin has old encryption. Some kid in his basement isn’t going to be able to hack it but eventually a nation state or corporation with enough super computing power is just going to dedicate enough resources to do so. Then “poof” all the value is gone.
First off, in this modern age, investing in anything long term with the intent of generating “wealth” is just stupid. Cash is only worth as much as international banskters tell you it is worth. Your bank account can disappear with a simple order from some government entity. Gold is heavy and hard to protect. Silver is more stable but you need a bank vault and 24/7 guard detail to keep it safe since you need so much to have any substantial value. Real estate is worthless. Sure you can make a buck with the right market conditions but something goes south and your investment is suddenly a liability instead of revenue possibility. Plus you never really “own” any house or apartment. With the tax structure as it is you are really just renting from the government.
The best you can do is stay light on your feet. Keep some modest savings and a small footprint. Be able to move where the work is and if you have a family train them to do the same. Don’t burden yourself with debt. There is no such thing as “good debt”. Forget about retirement. Your elder years will either be spent working or be funded by the government.
That is basically it. The new Dark Ages can’t come soon enough.
Yes encryption is old technology but it has other safe guards other than encryption. Nice try with 5 min Google search though
Only a fool thinks he knows, a wise man knows he doesn’t know. ESPECIALLY with crypto, NOBODY knows. There are so man predictions by much more reputable people than this idiot. If author said the truth is nobody really knows rather than give advice, I would applaud him. PLEASE, I implore the manosphere not to listen to this article.
Alright whatever Nocoiner….
It’s called private money. Sorry Westernization made you forget.
Looks like blue pills on economics are being exposed
The cryptocurrency will be the last weapons against the few wealth still in the hands of many who believe to become rich, there would be a great inflations or even it becomes illegally due government law and you are finally screwed there will be the end of money as we known today and we will obtain just government credits credits so the states may erase them in a single click and so finally control people wealth.
Do not invest in ceyptocurrency you have been warned
Alright whatever Nocoiner….
Already tried and failed in china.
Cryptocurrencies are censorship resistant.
Sorry you didn’t even bother doing a 30 minute research on it
Your lack of understanding of basic economics is absolutely astounding.
Sorry snowflake, Bitcoin is a bubble. It may continue to rise for a little bit but it will come crashing down soon enough. And that has exactly nothing to do with the MSM and everything to do with Econ101. “Unlimited Demand” – there is no such thing ..just the typical losers jumping on the bandwagon in a classic Ponzi Scheme.
You missed the core mission of cryptocurrencies and that’s the replace the current centralized debt fiat system.
Not as an investment vehicle.
ah yes..the usual “new paradigm”-argument. don’t buy the bull, folks.
What a dumb comment oozing with bitterness. Don’t even know what a Ponzi scheme is, do you? BitConnect was a Ponzi scheme. Where does Bitcoin promise outlandish returns if you put in X, Y, Z? Bitcoin is as much of a Ponzi scheme as Amazon stock was in 2010. Is Amazon just another flash in the pan? Looking at the all time charts a Nocoiner like you would tell us we’re in the “new paradigm” phase.
I didn’t get in in 2015 either, but just admit you missed it. Stop denigrating others making money.
The fiat currency of fiat currencies.
I think Switzerland already “issued” “Etherum” as a cryptocurrency.
Referring back to the Google Search Engine Bias ROK article…… Etherum now has a whole “different” story than when I first read about it. I now see several articles having “general” detail about one “person” who “constructed” it.
The internet is a joke.
If the power goes out can i use bitcoin to buy food?
Nope.
What a shitty ‘currency’.
If the power goes out it isn’t coming back on. The only way you can purchase food is going to be pointing the barrel of a gun at someone who has what you want.
I don’t think people realize the old “72 hour rule” till collapse and civil disorder no longer applies. We are now down to 24 hours if that. Our infrastructure, even here in the first world, is screwed. It is basically being held together with gum and shoe strings because our public investment has been in PC social experiments, illegal immigration, and the welfare state. Once the switch goes off it ain’t coming back on.
If that happens it means you are no longer living in a first world country.
If a massive solar flare took out all the computers, gold and silver should still hold their value.
Than banks and most institutions and farming won’t work. Also Bitcoin getting big would force a decentralization of power companies which would allow more efficient options that makes it harder for 1 person to turn off their power
Actually amazon is.a scam . It hasn’t made money and it’s only
Purpose is to gain all the market share
And drive out brick and mortar s . Truth be known it costs more to keep the warehouses running and all the shipping costs going to individual homes
I work on Wall St and have consistently been able to earn 8% or more on my investments for the past 6 years. Bitcoin and all the other shithead electronic currencies have no value. The cost associated with handling the number of transactions facilitated by conventional methods (i.e. cleared through banks) using blockchain would be prohibitively expensive for most individuals, reducing the number of players in the space to those currently operating it. You know, only at higher cost than before.
A bet on bitcoin just gets you exposure to wishful thinking. Good luck guessing the value of that.
Propaganda. For one it’s possible to make more than “6%” on investments on the stock market.
Second Bitcoin KILLS banks if it gets popular so the comparison doesn’t work.
Do you compare snail mail to email?
You honestly think the big banks with all their power are going to just roll over and die. Bahahaha what makes you think they don’t have something to gain from crypto. They have been moving toward the goal of a cashless society. This could be their break through whilst the great unwashed naively think they are beating the man, when in fact they were played as they always have been.
Looks like you don’t even know how cryptos work. They’re designed to eliminate the middlemen. Hence your able to store and use it however you like. And yes big banks are extremely vulnerable why do you think they begged the government for a bailout?
Also “cash”less society refers to when the government controls every aspect of your life. Cryptos as I mentioned before don’t require a middlemen and are censorship resistant (you can never stop a transaction from happening)
Why would the government’s give up control or make something that does that?
In truth, Bitcoin helps banks and dollar to sustain. The total number of cryptos lost during transactions is huge and untrackable. It benefits other hodlers as the price of the currency remains the same whereas the number of hodlers go down, making each remaining hodler’s stash even bulkier.
Banks benefit as people who end up losing their cryptos used fiat to buy them. The money is vanished from the economy means less dollars than before. Dollar is an inflationary currency, so this is precisely what banks want.
I said at least 8%…I made 20% last year, but that was basically just beta exposure through SPY. My lowest year – 2013 – was an 8% year. And making 8% compounded over 6 years is >50% cumulative return on investment, which is nothing to laugh at. Over 30 years it’s a 1300+% return. You know that, though, I’m sure.
There is no inherent value to bitcoin – you are trading emotion. And no, crypto won’t kill banks. Unlike email, which is substantially cheaper than snail mail, blockchain processing of millions of daily transactions is far more expensive than current methods. There are good uses for blockchain (like systematic fingerprinting), transaction processing is not one of them.
You could’ve made more than 1300% had you bought Amazon during 2008 or 2001. Like I said you’re giving me the wallstreet propaganda of “safe investment” 401k plan.
What inherent value? Does that mean the USD is worthless since it’s printable paper? Oh wait there’s a production cap on Bitcoin there’s more uses. Like cross border payments, e-commerce without banks, and easy conversions (atomic swaps). Someone didn’t do their research it seems.
And yes you save more money paying the transactions speeds(under segwit and lightning network) than anything offered by banks
I play the markets too. I see Bitcoin as being a bit like gold was about 10-12 years ago. Not a buy-and-hold investment by any means, but its extreme volatility makes it a nice way to generate significant pocket money on a monthly or even bi-weekly basis. Now that Bitcoin futures trade on the CME, it has gained some mainstream appeal, which is where its original skyrocket growth came from. Bitcoin dropped from about $11.5K to $9.7K yesterday, then back up over 10K today, so I am betting it’s beginning another severe drop cycle. I may buy half a coin in at 7K, or I may wait longer depending on momentum.
Not a bad model actually if you remove the price floor due to lack of industrial use (gold, oil, etc will always have some value, bitcoin doesn’t). I prefer value investing on fundamentals myself (I’m in equity research), but there’s no doubt there’s high potential to earn money here if you’re willing to take on the risk.
Bitcoin does have industrial value. It is likely used to settle contracts on the CME, and that’s why they have a futures market for it. Right now April contract unit price is $10,900, min lot of 5 units. Spot price as I type is $9640 and heading down. Unlike stocks and bonds etc., Bitcoin trades 24/7.
And I don’t see how crypto can be compared with tulip bulbs. Those were real, actually. Crypto is the exact story of The Emperor’s new clothes.
8% is more is nothing to write home about, considering you’re humblebragging about working on Wall St. You used to be able to make that in a damn savings account as recently as 15-20 years ago. I tripled on my money in crypto last year. Granted it was only a $4,400 initial investment, so it didn’t make me rich by any means. But a monkey can make 8%. You go to work 40 hours a week and put in a crappy 401k and do better than that.
You people do understand that cryptocurrencies are just numbers? So, I own “43$21-*df”, and I can sell it to you for $100. Anyone?
What makes the USD money? Two things – we get paid with it and we can pay with it. None of the cryptos have these properties. So they really are useless, other than speculation object.
So is fiat currencies brother.
So looks like you missed the Zimbabwe and Venezuelan scenario where everyone is using it in place of their currencies from lack of distrust of their government.
Wrong. It’s not useless as long as a buyer agrees that it has X, Y, Z value. In a SHTF scenario, if your local 7-Eleven owner deems the USD worthless to him because the US has fallen, then your green pieces of paper are useless. Bitcoin would be useless if it had a bunch of sell orders and no buy orders to match with.
“We get paid with it and we can pay with it.” You do realize Bitcoin is only 8 years old and is moving more towards this every day, right?
You also understand that when you put your money in a bank, it’s just numbers right? Say you store $10,000 at Chase. You don’t have 10k in a SHTF scenario. It’s just numbers on a screen when you log into online banking. Your local branch may not even have the liquidity to cash out even if you wanted to in a normal everyday visit.
I have 15k invested, mostly in EOS and Enigma. Lost money on ripple and these “high supply coins”. The very good point, if you’re interested I have a close friend who does TA and trades daily I can link his content on steam and youtube (over 100k subs between 3 platforms).
For degenerates and non-degenerates alike
Opps I meant
The USA debt is $20 trillion or about $65,000 for every man, woman and child in America.
http://www.detroitnews.com/story/opinion/columnists/nolan-finley/2018/02/10/national-debt-congress-spending-finley-credit-card/110307932/
One idea to pay off the debt might be to ask every American to take on more credit card debt, get a car loan, a private student loan, or a second mortgage for $65,000 and then give these loan payouts to the US government as a gift.
Americans could then declare bankruptcy. The bankruptcies would fall off their credit reports after 10 years or when Americans die.
https://aaacreditguide.com/bankruptcy-on-your-credit-report/
https://ca.finance.yahoo.com/blogs/pay-day-/debt-death-owes-whom-172556863.html
In return, the US government could forgive all student loans and tax debts. The government could pass a law that says forgiven debts are not taxable. The USA could also end Social Security so that the US government is not on the hook for $211 trillion in entitlements.
https://www.thenewamerican.com/economy/economics/item/4526-economist-says-national-debt-really-211-trillion
This method would have benefits by getting rid of the US debt and bankrupting the banks that are enslaving Americans.
The USA would have a massive depression, but would emerge with a fresh start after a few years.
Maybe the US could also clear the criminal records of every American not convicted of murder and repeal every law except laws against murder and theft so that the USA could start over.
https://www.sott.net/article/244018-Brilliant-Iceland-forgives-mortgage-debt-of-its-population
http://theconversation.com/the-debt-jubilee-an-old-testament-solution-to-a-modern-financial-crisis-11816
Everybody has a friend who’s made money . Sounds like Anway
Could hackers ever get my private keys? Also, I believe the NSA already has the tools to get private keys whenever they would please. If someone invented a cyrpto-currency, why would they not include a secret backdoor for themselves?
And finally:
5) Bitcoin and all crypto currencies using block chain will NEVER replace cash and cannot because of the technological limitations. The block chain records every transaction each time a crypto currency is used. No matter whether you use your crypto currency units, they share the same block chain history. Other people using theirs are adding to the block chain ledger. This means over time, that ledger gets longer, and longer and longer… you get the idea.
It already takes several minutes to process a simple transaction and confirm you have the payment from the sender. In the not too distant future you will be waiting days for a transaction to complete. The financial markets will not tolerate this kind of inefficiency. Though there are applications for it that make sense, blockchain was never meant for the role of electronic currency. Avoid this trap.
Nonsense. Ripple settles in about 4 seconds. Litecoin and Ethereum a few minutes. Bitcoin is slow but the Lightning Network will change that. Goodness, the technology is 8 years old. Give it some time.
>Bitcoin is not a tulip.
You fail at making a point for this. Bitcoins are just bits and bytes. You can’t eat them and they have no utilitarian value. As soon as something better comes along that finds wide adoption they will be worthless and Bitcoin is already the Windows 95 of cryptos.
Bitcoins should be more understood as an intermediate token that cannot be falsified from fiat to assets or another fiat without any inherit worth in itself (i.e. to transfer money out of China, to bribe people with something semi anonymous, to sell illicit stuff etc.)
Just because you can make gains from the resulting fluctuation and long term storage doesn’t mean that bitcoins have any inherit worth beyond it’s token function.
I’m a software developer and cryptography is scam and bullshit