Cryptocurrency Investing 101 is a blog about cryptocurrency, this includes a list of tips for trading cryptocurrencies. I hope to provide a voice for the various people who are interested in investing in the cryptocurrency market. There are many other blogs out there that talk about the merits and demerits of the various currencies but I will try to offer an alternative perspective.
In this market there is a lot of noise and confusion, please feel free to contact me with any information you would like to see on this site.
Unfortunately, there are a lot of bad cryptocurrency investors out there. This essay is designed to help you identify the obvious bad cryptocurrency investors and avoid them.
The question is, “What makes someone a bad cryptocurrency investor?” My answer is, “A bad cryptocurrency investor is someone who:
1. Does not understand how a cryptocurrency works
2. Does not understand how a cryptocurrency exchange works
3. Does not understand the fundamentals of cryptocurrencies
4. Lacks the discipline to keep their cryptocurrency investments safe or secure
5. Has no clue what they are doing with their cryptocurrencies
6. Does not understand the tax implications of trading in and out of cryptocurrencies
7. Is either an amateur or a professional stock picker who does not have the patience for cryptos and their volatility
8. Has no clue about the major cryptocurrencies like Bitcoin or Ethereum, but will tell you that Ripple XRP is better than Bitcoin OR Ethereum
For the purpose of this blog post we will assume you are a novice. If you are more experienced and would like to suggest a swap, then please comment below with your suggestions.
For the purposes of this article:
1. Cryptocurrency = Bitcoin, Ethereum, etc., is any decentralized digital currency that uses cryptography to secure transactions and control the creation of additional units.
2. Mining = The process by which transactions are verified and added to the blockchain (distributed database) through the use of computing power.
3. Buy-and-Hold (HOLD) means to buy a cryptocurrency and keep it for a long period of time (months or years), in hopes that it will appreciate in value. This method is recommended only for people who are more experienced at trading cryptocurrencies.
The first thing to keep in mind is that the cryptocurrency space is absurdly volatile. If you have any experience with other financial markets, you’ll know that on a daily basis, about half of all the money that flows into and out of them goes in or out of cryptos. If you buy or sell at the right time, you can make a lot of money. But if you are unlucky enough to get in at the wrong time, you can lose everything.
It seems obvious that if you want to make money in this market, it’s better to be buying low and selling high than it is to be buying high and selling low. But it’s not quite as simple as that. For one thing, there are so many ways to buy and sell, and so many different cryptocurrencies (more than 1,000 at last count), that it would be hard for an average person to pick them all out.
I have done a lot of reading about this topic over the past few years, and I’ve discovered a few things people who study this stuff tend to forget. One is that there are only 10 top-performing cryptocurrencies over any given month from January 2009 through October 2017: Bitcoin (BTC), Litecoin (LTC), Ripple (XRP), Ethereum (
The most stable cryptocurrency is Bitcoin. It has the largest market cap and the most liquidity. Bitcoins are mined and distributed using highly sophisticated technology, which makes them valuable. Other cryptocurrencies are less stable, and they require some technical knowledge to use and trade.
Currently there are a few hundred cryptocurrencies in existence. They can be divided into two categories: those that are similar to Bitcoin and those that have interesting features but aren’t based on Bitcoin’s code.
Because cryptocurrency is both new and volatile, a lot of people think it’s a kind of gambling. But that’s not true for the same reason the stock market isn’t gambling. Gambling is a game of chance, where you can make money but you can also lose it. If a cryptocurrency goes up very high, it could mean it’s about to go down very low; if it goes down very low, it could mean it’s about to go up very high.
The price of cryptocurrency is driven by supply and demand: what people are willing to buy and sell at any particular time. It’s not driven by whether or not there is money to buy or sell.
Cryptocurrency is a form of digital asset or currency that uses cryptography for security. It’s the first decentralized digital currency, as the system works without a central bank or single administrator. The process is managed through a peer-to-peer network and transactions are verified by consensus among the network.
Most people think it is only people with a lot of money who can afford to buy Bitcoin. But anyone can join in and earn Bitcoins by completing simple tasks. These include downloading apps, like Coinbase, and buying goods online with your credit card, as well as referring friends who do the same.