Cryptocurrencies are a new form of money. They are not yet very widely used, and they don’t yet have a stable value. It is hard to find information about the best cryptocurrencies to buy now, or which ones have the highest likelihood of success.
We can set up a portfolio of cryptocurrencies, but it will be risky, because we don’t know which ones will succeed in the future. We can give you some advice on how much to invest, but it won’t be very precise.
You can’t get rich by investing in cryptocurrencies; if you want to do that you should probably become a cryptocurrency trader.
If you want to buy a cryptocurrency, you will want to buy one that is currently trading at a low price. There are two ways of achieving this. The first is to decide what you want to do with it. If you want to use it as money, then one that is heavily traded on an exchange is probably the best investment. On the other hand, if you have some idea as to how it might be useful – say, as a system for processing transactions – then one that isn’t being traded at all might be better.
The second way of making your choice is by picking the one that has the fewest other people buying it. You’ll have to do some research – and not only because you know nothing about cryptocurrencies – but because they are new and there’s a lot of information out there. It’s important to remember that the most popular cryptocurrencies right now are not necessarily the ones with the best asset value or development potential.
There is a lot of money to be made with crypto. The best crypto may not be the one you think it is. For example, suppose you are going to buy crypto that trades at $100, and someone tells you that when it hits $150, it will go up another 50 percent. That’s a pretty good deal! But you don’t know that for sure, and what’s more, it’s highly risky.
It’s also possible that the price might fall to $65 and never rise again. That’s still a pretty good deal: at least you got half your money back. But you didn’t get half of your money back because the price rose 50 percent or because it fell 50 percent; you got half of your money back because the value of the thing doubled from $100 to $150 in just a couple of months, which only happens about once every several years.**
If the coin does really well, you will make some money on this trade. If not, you will lose more than half your money. This trade is like buying stock in Microsoft or Apple or Pfizer and thinking “it’ll go up 100% next year!” It won’t go up 100%, but it will certainly do better than it did last year and probably much
If you want to make a lot of money from cryptocurrency, you have to have a good system for making choices. You don’t want to buy the biggest thing that is popular these days and so likely to skyrocket in value; that’s a risky strategy. You don’t want to buy the newest thing that is exciting and has a chance to be useful, because it is too new and hasn’t been used enough yet to be sure it will be useful.
And you don’t want to buy the most secure thing, because security isn’t always a good thing: as anyone knows who has had their money stolen by a phishing email, it can be more of a liability than an asset.
So you want something that helps you avoid being swindled by the latest fad and the newest gimmick, but not something that makes your life harder than it needs to be.
So how do you make money in crypto? It’s not very different from how you make money in traditional investing. There are three main approaches:
1. Hold an asset for years, hoping it goes up.
2. Bet on a specific project.
3. Invest in a market of assets that have high growth potential, like cryptocurrency or blockchain-related projects, and hope one of them has a big payoff.
Thinking about “crypto” is already a mistake. What you should be thinking about is something called “fiat money.” (You can find out what it is by asking a financial adviser or doing an online search.) And that’s not difficult. It’s easier than you think.
Many people are attracted to the idea of digital currency. They see it as a way to move money around the world quickly, cheaply, and in total anonymity.
In reality, there is nothing new about transfer of money. Almost everyone who has sent money abroad has done so by writing a check on his bank account. The difference with digital currency is that the act of transferring money is performed by computers rather than by a person or a bank.
There are three reasons why this matters:
1) If the people who run the computers were allowed to malfunction, or if they were hacked, you could end up with massive sums of money (or other digital assets) in some hackers’ hands.
2) Sending one bitcoin requires you to generate an address for each transaction, which requires you to know at least something about math and cryptography. It doesn’t take much effort, but it is more than many people would like to invest in the ability to do that kind of thing.
3) In order to keep track of how much money has been transferred and where it went, you have to trust the computers that are running the system with your information. The same problems apply if you can’t afford those computers; someone else will make sure they’re not being hacked.