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| Cryptocurrency guide |
- So whether you’re new to cryptocurrency and you're excited and ready to buy, or if
- you've been procrastinating this decision for a while but you’re finally ready to
- take that plunge… you’ve definitely made it to the right place.
- Because in this article we’re gonna cover the Top 5 things that you absolutely need
- to do before investing into cryptocurrency, so that you can get off to a good start, you
- can sleep well at night, and manage your crypto assets like a BAWS.
- Comin’ up!
- We’re gonna be doing a lot of cryptocurrency reviews, as well as tips and strategy article
- And in this article, we're going to be talking about a few products and services, and some
- information that you might want to reference.
- So without any further ado, let’s hop right in.
- So I’ve been knee deep in the cryptocurrency market since 2014, so going on 5 years now.
- And I've definitely made my fair share of mistakes along the way, especially in the
- early days.
- And I've been able to use those learnings and lessons to help my friends and family
- get off to a better start than I did.
- And my number 1 piece of advice to all of them is to learn the basics of cryptocurrency.
- Educating yourself about cryptocurrency is definitely the most important thing you can
- do to set yourself up for success.
- For generations, we're used to storing our wealth in banks, and it's someone else's responsibility
- to safeguard and protect our money.
- But with cryptocurrency, that's flipped entirely around.
- YOU are in control of your money.
- And if you happen to lose access to your wallet, or if you send your coins to a dead-end or
- the wrong person, there's no Help Desk or Support Center that you can call up to try
- to reverse a transaction.
- That doesn't exist with cryptocurrency.
- It's paramount that you take security very seriously at the onset and understand how
- these systems work.
- For a lot of the cryptocurrency projects out there like Bitcoin and Ethereum, there's actually
- no company.
- There's no CEO.
- There are no shares.
- Instead, these are decentralized, peer to peer systems that operate much less like a
- company, and a lot more like the Internet -- where no single person or entity owns or
- controls it.
- I won’t be going through all of the ins and outs of cryptocurrency works and what
- is blockchain technology is in this video, but I will include links in the YouTube description
- down below so you can check out those resources.
- And if you’d like me to make a more general concept video about how these things work,
- then leave a comment down below.
- That bring me to Tip #2, which is to trust nobody and to do your own research.
- Just like the Internet was in the 90's, cryptocurrency today isn’t all sunshine and rainbows.
- There are a lot of Pump and Dump schemes out there, there are scammers that will try to
- swindle you for your money if you're not careful (even on platforms like Twitter), it's kinda
- crazy.
- There are “shills” out there that are promoting these projects that they don’t
- really believe in, they are just trying to make you be the greater fool.
- So you really can't trust anyone, not even me.
- And if someone is trying to tell you that "This is the next hottest coin that you have
- to invest in", you should really think about what are their motives and why would they
- be saying that?
- If it’s someone on the internet saying this, chances are there might be something up there.
- But if it's a friend or a family member, then there's less of a chance that they're trying
- to trick you into something.
- However, that doesn't mean necessarily that it's good advice.
- You definitely need to do your own research, and not take anyone else's word for it.
- And this is why my team and I are so passionate about building Cheddur, the social network
- of cryptocurrency.
- It's a one-stop-shop for you to be able to research objective information about any cryptocurrency
- or crypto app that you might be interested in.
- I’m going to open up the Cheddur app real quick, just to give you a quick demo of some
- of the important things you'll want to do on here.
- And we can take Bitcoin and Ethereum as examples again, as let's say that's the potential investment
- that we're looking at.
- If you were considering investing in either of these coins, it would be helpful to understand
- the problem each of them is trying to solve, and figure out if it a small problem with
- a small market, or if it is a BIG problem with a big addressable market.
- The best cryptocurrencies out there are the ones that solve these giant, “hair on fire”
- problems as they call it in the startup world.
- And good news -- we can see here that Bitcoin and Ethereum are both doing that.
- Now, you’ll also want to know how the price has been performing over the last month, 6
- months, year, 2 years, so you can think about how you want to time your entry into the market.
- You’ll definitely want to follow the coin and check the news and reviews to get a sense
- of what the general market sentiment is like towards that coin and to figure out is it
- being worked on, and if so, by who?
- Are they no-names in the industry, or do they have serious street credit?
- Is the project evolving?
- Is it getting better, faster, cheaper, and easier to use?
- More scalable?
- These are very important things.
- And if you see that the price is going up, but there doesn’t seem to be too much progress,
- then that’s definitely a red flag.
- But if you see the price staying flat or declining, but there seems to be massive progress being
- made on the project, then that could be a sign that it’s a good time to get involved.
- Now, before we get that far, you're definitely going to want to take a look at the economics
- behind the coin in question that you're doing research on.
- For example, how many coins are out there in active circulation for that currency?
- Is the overall supply of coins capped and limited to a fixed number, or is there inflation
- built into it on a yearly basis?
- And the answers to these questions vary greatly from coin to coin.
- So it's very important that you understand the supply and demand economics behind it.
- Now, one of the coolest parts of the Cheddur app is this comparison feature.
- If we go ahead and compare Bitcoin and Ethereum side-by-side, we can see that Bitcoin currently
- has around 17.5 million coins in active circulation at the time of this recording and the supply
- is actually capped at 21 million, meaning there will only ever be 21 million Bitcoins
- in existence.
- Now, when we look at Ethereum, there's currently over 100 million “ether” in circulation,
- so roughly 5 times the maximum supply of Bitcoin, and on top of that there’s an annual inflation
- of about 18 million Ether per year as well.
- So with this information alone, we can now start to piece together some of the reasons
- why Ether is trading right now at about ~$100 US dollars, whereas one Bitcoin is currently
- trading at about $3,500 US dollars... partly because there is a big supply difference between
- these two projects.
- So again, if someone's telling you that this coin is the next hottest thing, and it's going
- straight to $10, but then when you actually do the research on it, you find out that there's
- a trillion coins in circulation, chances are it's not going to $10, at least any time soon.
- There’s a lot other really cool features on the Cheddur app that you can use to do
- you coin research.
- I won't go into all of them in this video, but I will include links in the YouTube show
- notes down below so that you can download the app on iOS, or Android, or check out our
- website.
- Do your own research, and hey, make smarter investment decisions.
- So Tip #3 is to only invest what you can afford to lose.
- I literally mean…
- every dollar that you invest into cryptocurrency… do so with the understanding that it could
- all go to zero overnight.
- Because at the end of the day, cryptocurrencies are programs.
- It's software.
- And software is built using code, which comes from humans.
- And we're not perfect, and code has bugs.
- And it's possible that a bug could get discovered that leads to a “black swan” events that
- could wipe out your entire investment overnight.
- And aside from just bugs, there's a risk of a 51% attack on the network, or the fear of
- quantum computing.
- There are user errors, like if you put your coins on an exchange, and that exchange gets
- hacked and the funds get stolen.
- Or if you accidentally send your coins to an invalid address... the list goes on and
- on.
- Cryptocurrency has only been around as an industry for about 10 years now, so we're
- all kind of learning on the fly how to do it.
- It's very much so an experiment, it's early days, so make sure you're treating it as such,
- and that you only invest what you can afford to lose.
- Tip #4 is to have a plan and to stick to it.
- Let's say you buy Bitcoin at $3,500 US dollars today, but then it sinks to $2,500 tomorrow,
- and then $1,000 the day after that.
- What's your plan?
- Are you going to hold on to it?
- Are you going to sell it and cut your losses?
- Are you going to buy more?
- Could you imagine the panic you'd be feeling if you didn't think this through ahead of
- time?
- Even on the flip side, so let's say you buy at $3,500 today, but then it goes up to $4,000,
- and then $5,000 the day after that.
- What's your plan then?
- Are you going to take profits?
- Are you going to stay in the market?
- You have to think these things through.
- So, some of the key things you need to be thinking about here are…
- 1.
- What is your strategy for entering the market?
- Are you going to put a lump sum down at a certain price?
- Let's say Bitcoin goes to $3,300, that's my buy-in price.
- Or are you going to take the other approach called “Dollar Cost Average” where rather
- than doing a lump sum investment, what you do is you take your budget and you chop it
- up into pieces, and over the course of time, whether it be weeks, months, or even years,
- you slowly apply that budget into the market.
- So rather than buying at a certain price and kinda being locked in, you're buying all of
- the prices regardless of how the market is performing.
- Number 2 is deciding, is this a short-term investment, or is this a longer-term investment?
- Say 3-5 years.
- And that's what I personally recommend because the cryptocurrency markets are so extremely
- volatile in the short-term.
- If you were to buy Bitcoin today at $3,500 US dollars, what if it hit a 6-month downturn
- literally the day after you bought it?
- And honestly, everyone feels like that's the case when they first get involved in crypto.
- It's just kind of the right of passage it feels like.
- If you have a long enough time horizon on this investment of 3-5 years, chances are
- you can escape that short-term volatility and if it trends up and to the right, then
- hopefully the future value of your investment is much larger than the initial investment
- that you'd be making today.
- Now, if this is a shorter-term investment for you, then in sub-tip number 3 here, you're
- definitely going to want to set your stop losses and your limit orders on whatever cryptocurrency
- exchange or mobile app that you're using to make trades.
- Because again, if you were to buy today at $3,500, you need to know that if it sinks
- to $3,000 tomorrow, that might be the price at which you'll want to pull your money out
- and to preserve your capital.
- And to cut your losses.
- And on the flip-side, if it goes up to $4,500, maybe that ticks the objective that you set
- for yourself.
- That could be the profit margin that you're after.
- You have to know these things ahead of time.
- Set your orders, and trust me, by doing this -- by having a plan and sticking to it -- you're
- going to be able to sleep so much better at night.
- You're not going to be glued to your phone all day checking charts and prices, and you'll
- be able to conserve a lot more of your valuable brain juice.
- And finally, Tip #5 is to get a hardware wallet.
- You see, in order to own cryptocurrency, you have to store your coins on what's called
- a digital wallet.
- And these wallets come in many shapes and sizes.
- So there's Coinbase, for example, which is a service that will host the wallet for you.
- There's apps that you can download and run yourself on a desktop or a laptop computer.
- And then there are these physical, what look like USB sticks.
- These are hardware wallets.
- And they are designed with the sole purpose of safeguarding and protecting your crypto
- assets.
- And my general recommendation is that if you own -- or you intend to own -- about $1,000
- worth or more of cryptocurrency, then it makes sense to invest in a hardware wallet such
- as the Trezor, or the Ledger Nano X, or a KeepKey.
- And most of these hardware wallets you can snag for about $100 or less, so it definitely
- makes sense and it's not going to break the bank.
- and check those out.
- Question of the day!
- Which coin or coins are you most interested in buying, and why?
- Let me know in the comments section down below, and I'll see you in the next one!
- Best cryptocurrency wallet Click here
