WRITTEN BY BENJAMIN HART
Table of Contents I. What is a Cryptocurrency II. Pro & Cons III. Advantages of Cryptocurrency IV. Why is it Important? V. 5 Tips for Beginners VI. Analyze & Research VII. Risks VIII. Recommendations
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I. What is a Cryptocurrency? A cryptocurrency is a digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of this security feature. A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.
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II. Pros & Cons Cryptocurrencies make it easier to transfer funds between two parties in a transaction; these transfers are facilitated through the use of public and private keys for security purposes. These fund transfers are done with minimal processing fees, allowing users to avoid the steep fees charged by most banks and financial institutions for wire transfers. Central to the genius of Bitcoin is the block chain it uses to store an online ledger of all the transactions that have ever been conducted using bitcoins, providing a data structure for this ledger that is exposed to a limited threat from hackers and can be copied across all computers running Bitcoin software. Many experts see this block chain as having important uses in technologies, such as online voting and crowdfunding, and major financial institutions such as JP Morgan Chase see potential in cryptocurrencies to lower transaction costs by making payment processing more efficient. However, because cryptocurrencies are virtual and do not have a central repository, a digital cryptocurrency balance can be wiped out by a computer crash if a backup copy of the holdings does not exist. Since prices are based on supply and demand, the rate at which a cryptocurrency can be exchanged for another currency can fluctuate widely. Cryptocurrencies are not completely immune to the threat of hacking. In Bitcoin's short history, the company has been subject to over 40 thefts, including a few that exceeded $1 million in value. Still, many observers look at cryptocurrencies as hope that a currency can exist that preserves value, facilitates exchange, is more transportable than hard metals, and is outside the influence of central banks and governments.
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III. Advantages of Cryptocurrency
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IV. Why is it Important?
The largest exchange of wealth in history is currently happening. Let that sink in for a moment. At the same time we have a market of digital currencies that puts the power back in the people's hands growing exponentially up to a market cap of 151 Billion now. This is going to be the next form of payment worldwide and investing in it now can create unimaginable gains long term.
V. 5 Tips for Beginners 1. Learn the Basics: Where to buy cryptocurrency, where to store it, how to transfer it, etc. 2. Find a Secure Wallet: Keep your cryptocurrency secure. Cold storage, Exodus wallet, etc. 3. Research: Most important part of the investment process. Do your homework. 4. Diversify: You’ve heard don’t put all your eggs in one basket. That applies here. Diversify your portfolio into many cryptocurrencies. 5. Money Management: Learn to manage your investments correctly, find a subscription to keep you up to date on everything cryptocurrency
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VI. Analyze & Research
In a exponentially growing market, finding strong opportunities to buy in at a good price and holding is the key to making substantial profits. Volatility is always a concern so you always need to invest with caution. Here are some key points of reference when researching to invest: The Problem Every business or cryptocurrency worth investing in will be answering some sort of problem. The first step is finding out the problem the business plans to solve. Is that a problem in the market currently? How will the solve this solution? Will the solution to this problem be valuable for the community? All of these are questions you need to be asking yourself when researching companies and cryptocurrencies. The Team The team is a close second in most important things to be researched. A solid team is crucial for any business but especially in a new market like Cryptocurrency. You want to find companies with a strong and experienced team in their given fields. Investing in a business longterm means you have to believe in them long-term and know they are going to accomplish their set goals. Of course in a new market you are not going to know everybodys name but always get as much information as you can. Their title, their previous job, their specialties, their value to the team, etc.
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The Community The community is also extremely important because that acts as their “fan base” but more importantly potential and current investors in that specific cryptocurrency. Research the company on social media sites: twitter, Facebook, LinkedIn, slack, even Instagram and see what their following is like. Do they have a large following? Does their following engage with the company? Does the company actively post and keep the community up to date? The Website The website will probably be one of the very first things you will encounter when researching Cryptocurrencies. Always keep an eye on the development of the website as it can tell a lot about a company. Is it user friendly? How it the content? Is it updated often? How does it look? Is the product or 3 service clearly explained? All of these things are important to look at, however, that does not go to say that a good investment opportunity can be found within a company with a sub-par website because they are out there. Market Cap/Circulating & Total Supply So one of the obvious but very important factors that needs to be added into the equation on whether you should invest or not is the market cap and coin supply. First off, let me start by saying: know the difference between circulating supply and total supply. Also, know both of those numbers. For those who aren’t or have not been involved in finance, Market Cap and Coin supply directly affect the price. So for example if a business has a market cap of 1 billion and a coin supply of 1 billion, their coins will be worth $1/coin. I know it sounds like a very elementary concept but it is overlooked often in this market. Finding a solid coin with a modest amount of supply is where you want to get in. The factors of strong business, good price, and low amount of supply are like the 3 golden tickets to a great long term investment. Take Ethereum for example. Current market cap of around 28.6 Billion, circulating supply of 98.9 million, putting the price at $302. But take something like Ripple with still a large current market cap of around 9.2 billion but the circulating supply is 38.3 Billion so the coins price is at .24 cents.
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VII. Risks The risks in the currency market are for the most part the same as in any market of investing. Widely known rule of investing: Don’t invest more money than you can afford to lose. With that being said, within a volatile market like Cryptocurrency, you can make huge gains with a lower amount of startup capital. Another tip on managing risks is always keep your long-term investments safe. One potentially major drawback of digital currency is that if your computer crashes and your currency is not backed up, it is at risk of being gone. Many including myself like to store some offline in ‘paper wallets’ or nano ledger hardware wallet to ensure safety.
VIII. Recommendations Buying: -Bitcoin ATM: Bitcoin Depot is one of the largest producers of Bitcoin ATMs in the nation with over 125+ ATMs nationwide. Search to see if there is one in your local area. Instant verification and convenience are the benefits of using a ATM as opposed to buying online. - Coinbase: For U.S. buyers that do not have access to an ATM, I recommend using Coinbase for purchases using your bank account, credit/debit card. - Binance: As for exchanges to receive alt-coins, I recommend Binance as it is one of the largest and most secure exchanges in the world. Wallets: -Hardware: Nano Ledger or Trezor -Offline: Paper Wallets -Software: Exodus -Mobile: Jaxx
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