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The Biggest Innovation of our Time
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Dollar-Cost Averaging
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Dollar-Cost Averaging (DCA) is a commonly used investment strategy useful to cryptocurrency investors, new and old alike, especially during market volatility. While dollarcost averaging is not a guarantee to hit the jackpot, time and time again, it has shown positive results in terms of reducing risk and increasing returns over time.
While this article will not go into all the details and nuances of DCA, we will discuss what it is and why you may want (or may not want) to use it for your investments. By understanding how DCA works and its benefits/drawbacks, you will better understand an essential aspect of investing in cryptocurrencies. Let's get started!
The Problem: Market Volatility
Financial markets (especially cryptocurrency) are highly volatile and speculative - meaning prices of cryptocurrencies are subject to sudden, dramatic changes in value. In addition, no central authority or government agency is overseeing the crypto market. As such, it can be difficult for investors to predict how prices will change over time. While the market may be hard to predict, there are ways to reduce your risk and exposure.
One Solution: Dollar-Cost Averaging (DCA)
A critical key to being a successful investor is to take emotion out of your decision-making. Dollar-cost averaging (DCA) lets you invest a smaller amount into an asset on a regular schedule. It's like buying groceries every week instead of stocking up once or twice per year. You can even set it and forget it with recurring investments that happen automatically at scheduled intervals.
As with any investment, cryptocurrencies volatility may cause uncertainty, fear of missing out, or fear of participating at all. When prices fluctuate, how do you know when to buy? It's the age-old advice: buy low, sell high. But how do you find that magic moment when prices are at their lowest?
Dollar-cost averaging (DCA) is an investment strategy used by many cryptocurrency investors to reduce the volatility of market fluctuations. By investing at regular intervals, you increase your chances of success. This strategy enables investors to "average" out the cost of purchases over time and reduce the overall impact of market volatility and price drops. DCA is also
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a great way to "average down" your average cost when prices dip! As prices decline, DCA investors can leverage the dips to load up on an asset hoping that the prices will recover, returning a nice profit!
While it may be tempting to roll the dice and put all your money into a single asset when investing, this can backfire spectacularly. Dollar-cost averaging is a strategy that can help protect investors from taking too much risk and losing their hard-earned money. Compared to investing at one point in time, dollar cost averaging spreads out investments over an extended period of time and offers more predictable returns when prices are rising or falling.
Dollar-cost averaging also allows investors to gradually invest smaller amounts of money over time rather than making one significant investment all at once. It is a cost-effective way to get into the market without needing large sums of money, thus allowing anyone to become an investor and grow their crypto portfolio.
Who It's For
The strategy of dollar-cost averaging can be the right choice for those who believe their investments will appreciate or increase in value, even if, on the way there, they experience some volatility. By dollar-cost averaging, you can reduce the impact of market volatility on your investments. DCA allows investors to dip their toes into the market without having to go all-in (and possibly at an ATH or all-time high).
How much to invest depends on your goal and risk profile for trading cryptocurrencies. As with any investment, though, there will be times when prices fluctuate where we might not know if it's worth buying into at all, so how do you make the decision to buy?
If, as an investor, you think prices might go down — but are likely to recover in the long term — you can use DCA to take advantage of the time the price is down to gain more of an asset. The same goes for price spikes. DCA allows you to hedge your investments in case of volatility. Emotions can get the best of anyone, but an emotional investment is typically not a good investment. Letting psychological factors like fear or excitement dictate buying and selling decisions is never a good idea. Often the result is panic selling or buying. DCA helps avoid FOMO and emotional trading.
Things To Consider
Dollar-cost averaging does have some trade-offs. By spreading out your investments, you're missing the chance to reap the full benefit of a significant price increase. It's also important to consider trading fees when using dollarcost averaging because they can cut into profits and eat away at returns.
Dollar-cost averaging is a great strategy to help reduce the risk of investing in crypto. Investors need to debate whether using dollar-cost averaging or not they research what this entails and whether it will be beneficial to them given their situation. There are pros and cons associated with every investment technique, which makes it imperative for any investor who wants to stay safe to know how each one works before making a decision! If you need help determining if DCA would work well for your investments plans, seek a professional. DYOR! Do your own research and always consider consulting with a financial professional before diving into new strategies, techniques, or technologies!
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Blockchain Revolutionizes the Future of Work
Groups such as Friends with Benefits are already successfully using social tokens. For crypto-based communities, social tokens are a way to incentivize collaborative work. The ecosystem around the tokens is more valuable than the tokens themselves. Many communities are already successfully utilizing social tokens. Coinverse's community manager is a French writer named Eliot Couvat. The following is his opinion. The views expressed are the author's own. Customized selections of our top stories based on your reading preferences.
The NFT market has boomed since last year, and as of today, NFT sales have exceeded $13 billion. However, despite the considerable interest in NFTs, many people still do not understand how they work, as they are considered a fantasy with little practical application. While NFTs still draw skeptics due to how perception has evolved, a new trend has emerged that could prove more valuable than NFTs and could transform the way we work and collaborate in the future: social tokens.
How do social tokens work?
With a social token, anyone can join a crypto-based decentralized community and carry out joint projects in exchange for a digital currency. Digital currencies can be redeemed for other cryptocurrencies or perks within the community they are associated with, such as access to token-gated content, voting rights, and early access to NFTs.
DAOs are first and foremost virtual communities where people who share similar interests join forces to achieve high-ambition goals. They are not about work. It's about culture and, foremost, about collaborating and creating what you've always wanted to create. Products and projects come second in DAOs. There are many types of DAOs, some of which focus on cryptocurrency and some on social networking. It is true that all DAOs, even socially-focused ones, build different products with different ways to organize their work, and social tokens allow them to accomplish these goals. Like any other cryptocurrency, social tokens are cryptocurrencies. However, the benefit of creating a social token is that community leaders have control over its distribution.
A social token aims to build a virtual economy where early believers and contributors share the benefits. Shares, or social tokens, are awarded to contributors who help grow the community by contributing to the various projects the DAO is building. People are interested in purchasing the tokens to gain access to exclusive content perks and vote power. Suppose contributors are paid in existing cryptocurrencies (like a salary). In that
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case, they are incentivized to help the project succeed, since their tokens gain an almost infinite value as the project's success grows. You would receive equity as an early employee of a startup.
Community leaders can also use tokens to reward contributors fairly. In a community, tokens aren't limited to the first contributors as they are in startups. You will be rewarded for your efforts, even if you join later. This distribution of power is much fairer than traditional startup models. In addition to the advantages that social tokens offer within a decentralized community, they are also easier to trade than NFTs. Token holders do not have to wait until someone wants to buy their tokens before selling them; they can exchange them at any time for another cryptocurrency, making their value less hypothetical than an NFT's.
Furthermore, social tokens do not require capital to participate, unlike NFTs. Entry is free, and anyone can participate in an online community and earn social tokens by working hard. The people who invest their time are the ones who create genuine value for an organization.
Tokens as a way to build trust
Tokens are designed to incentivize collaboration by making it easy to collaborate with individuals you don't know and don't trust. As opposed to setting up contracts and legal status for each contributor at the beginning, social tokens facilitate transactions on a blockchain, which means an irrefutable record of the exchange exists.
As an alternative to legal contracts or regular fiat payments, social tokens won't replace what we currently use to build trust in the workplace, but they will allow us to launch smallscale projects more rapidly. Tokens can accomplish this via a multi-signature wallet, which is a crypto wallet that will enable you to manage your community's crypto assets with the option to require a pre-defined number of signatures to confirm transactions. Thus, no one can abandon a project with all the money that has been contributed since it would require the approval of all members.
Members can also vote on future decisions equitably using crypto mechanisms, with voting power proportional to the number of tokens they own.
What are some ways that organizations can use social tokens?
A token is only as valuable as the ecosystem that surrounds it - the community or organization. Unlike NFTs, which are primarily speculative and serve primarily to demonstrate status and belonging, social tokens enable people to create great things together and share the benefits. An NFT is like being an investor, while a social token is like getting early access to a company. As a result, you'll be more involved, learn more, and have a more significant say in the community's future. It's more fun than being an investor hoping for a return down the road. Some projects have successfully tapped into the power of social tokens in recent months. In one project, Modern Billboard Collective, people will be able to buy a pixel and use it as an ad, which will make the entire page worth $1 million. Using tokens, the collective will allow brands to advertise directly on their homepages without going through a mediator.
They succeeded in creating trust between the three founding startups while pursuing crypto-mechanisms for the whole project. In other words, since anyone can buy a digital lot on one of the three websites "on-chain," the companies involved in this collective can rely on one another since royalties will be distributed automatically and fairly. Anyone can create a social token in minutes with platforms like Coinvise.
Decentralized communities have long used social tokens for incentives. Groups like Friends With Benefits, a group chat for thinkers, or JUMP, a community for advertising professionals, Fortune 1000 brands, and Web3 startups, are now thriving. Tokens can facilitate collaboration and allow multiple people to work on a project at once, giving token holders flexibility and autonomy.
There are already several communities that use social tokens growing steadily and have the potential to become billiondollar communities. Although the space is developing rapidly, a great deal still needs to be built, and there are a lot of opportunities ahead for ambitious and motivated individuals. Growing with these new Web3 communities and being rewarded for being a part of this revolution might be a once-in-a-lifetime opportunity. Don't miss it.
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Ecosystems owned by communities -
In the years since Satoshi Nakamoto launched Bitcoin (BTC) in 2009, gamers have talked glowingly about blockchain's potential - thousands of panels and presentations have highlighted its possibilities, costumes of Bitcoin maximalists have been seen showing off their wealth. It has taken a long time for the transformation to take place despite these accolades.
Regardless of the reason for the delay, whether it was the global COVID-19 pandemic or the time it took to create innovation, we are on the cusp of change that will lead to new economies and ways of interacting between humans. In virtual worlds, the Metaverse, which combines game theory and blockchain technology, creates tokenized incentives. Decentraland has already revolutionized people's lives and interactions, and many similar platforms are being built. With the growing importance of the virtual economy, the Metaverse will include multiple crosschain possibilities.
The gaming industry and NFTs
Real value is being created at the burgeoning intersection of decentralization and the video game industry, known as GameFi. Tokens that are non-fungible provide players with tangible, real-world assets and motivate players to participate for more extended periods, allowing developers to build in-game economies based on their creativity and interactions as creators and owners.
By enhancing the gameplay experience with NFTs, in-game tokens and NFTs will ultimately increase in value. Players can now select the games they want to play and how these games will evolve. In the wake of the pandemic, Axie Infinity's "scholarship" program, which encourages community development, significantly impacted families. This game ecosystem consists of multibilliondollar games controlled by players.
Another early Decentralized Autonomous Organization (DAO) devoted to NFT gaming and trading is BlackPool. As a community-driven platform, it combines a passion for gaming and art with data analytics and machine learning to provide a return on investment for users. Axie-like scholarship programs are also available through BlackPool, which opens up new opportunities for excluded people. With blockchain technology, markets will be more democratic and transparent. In addition, through interoperability, it will be possible to create networks of
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GameFi benefits from blockchain in many ways:
The more transparent the gamification mechanisms are, and perhaps codified through a smart contract, the more trustworthy users are and the more willing to invest time and money.
Blockchain technology facilitates the creation of virtual resources that are portable in a way that has never been possible before.
The possibility of buying, selling, and exchanging assets outside of individual games has been added.
Intelligent automation using smart contracts, which enables multiple parties to interact without human intervention.
online communities with exchanges and interactions between them.
The community comes first.
Through engagement and collaboration, a community forms around an idea or interest, and concepts emerge from the community. The idea of "corporationfirst" is being replaced with "communityfirst." These communities are decentralized, democratically governed, and they decide the final design. Artists who contributed to an NFT earn royalties every time someone mints one. By doing so, new ways of monetizing creative knowledge and skills will open up.
With a create-to-earn model, creators can take control of their game and participate directly in its development. In-game assets can be created, NFTs can be created and sold on secondary markets. Players and programmers can benefit from this robust new creator economy, where their ideas can be liberated, the in-game experience improved, and their intellectual capital monetized. Content creators become incentivized to improve the overall gaming experience, thus making the gaming ecosystem more communitydriven. Even beginners can contribute to games.
The result will also be the emergence of new social networks between creators and fans. A new immersive fan-run economy will replace the attention economy in the Metaverse through social tokens. Communities or celebrities can further monetize themselves by creating social tokens based on a brand, community, or influencer. By creating bidirectional relationships between creators and consumers, both will benefit. Various Web 3.0 communities collaborate, evangelize, and create tribal network effects that contribute to the platform's value.
Token economies are forming networks among digital communities. As more players use or promote the community, the stronger the game and underlying blockchain become. Stakeholders are the players.
As a result, a harmonized, interconnected Metaverse can be enabled that is further able to include digital data rights in tokenized NFTs, and to store, track, and enforce those data rights. The transformation has just begun for innovators and creators, and the communities that support them. Communities like these are the new tribes of the Metaverse, and the possibilities are only limited by your imagination!
