A cryptocurrency is a technology that works similar to a Dollar Currency, but uses networks, software, and cryptographic keys to process transactions. This is a helpful guide to Cryptocurrency investing and digital finance.
Last Updated: 8/09/2022
Cryptocurrency Defined
Cryptocurrencies are software that is based on mathematical principles to create transactions over the internet. They come in many different forms, but they are built on the concept of blockchain technology.
A blockchain is a platform which establishes a network for using mathematical principles to complete transactions, smart contracts, and exchanges. Blockchains are open-source technology that allows decentralized development, governance, and transactions.
NFT Defined
An NFT is a Non-fungible Token, a digital tokenized asset that does not have an physical form (Hence Non-fungible).
They can be created on a specific blockchain, meaning that the tokens are sent through the parent network. This often leads to huge value creation for the network. For example, if many NFTs gain popularity and are built on the Ethereum Network (ERC) then it will create for value for the Ethereum (ETH) currency because ETH is required to process transactions across the blockchain.
NFT Tokens can be derived from a specific asset, real or digital. Popular digital art can be tokenized with success stories such as the Multi-Million dollar NFT CryptoPunk collections. In addition, stable-coins can be issued to be tied to a specific asset, such as USDC or USDT, which are blockchains that derive from the value of one US dollar.
Bitcoin Value Chart
The Value Of Cryptocurrencies
All cryptocurrencies are based on a fundamental concept of transactional value. Meaning that any cryptocurrency has its value derived from the value of the technology it supports.
As an example, Bitcoin (BTC) is incredibly valuable because the technology allows thousands of data mining machines to receive BTC in exchange for processing transactions on the blockchain. The result is a super powerful, decentralized network where you can send Bitcoin to and from anywhere and it will be successfully sent within roughly 30 minutes.
Even US Legislation have acknowledged the importance of Blockchain Cryptocurrencies as a digital asset with legitimate value. Congress has had recent developments as they approach Digital Asset Taxation, read more about the recent Congress Hearing with Blockchain CEOs over Cryptocurrency Regulations.
The Best Timing for Cryptocurrency Investment
The volatile nature of Crypto has been unappealing to most old-school investors, but the proof is in the results. As news outlets have attacked Bitcoin and Blockchain tech as fraudulent and risky for many years, the turnaround of major Cryptos such as Bitcoin and Ethereum have provides 1,000% + Returns many times over.
Key Success to Crypto: Averaging In
Averaging in has many advantages that prevent losses in your Crypto investment. This industry is not free of instability and can often experience rapid portfolio shifts. However, you can use the volatility to your advantage by choosing not to cave in to the rapid sell offs but instead keeping a strategy of small recurring investments.
An example is the Bitcoin drop of 2017. The story goes that BTC rose sharply over the year going from under $1,000 in value to $12,000 before a massive sell-off that lowered the price to under $3,000. One can assume that the investors that bought in at $12k would be suffering huge losses.
The truth is that if those investors truly believed in the technology and held their investment, and added more during the $3k period, they would have struck a fortune in December of 2020 where Bitcoin crossed over $25k in value. With the technique applied, another investment at the $25k point would have resulted in even more profits as Bitcoin climbed to its 2021 High of $68K.
Keep in mind that this strategy should be held over years to create satisfactory results. Click here if you’d like to open an account to begin investing in cryptocurrencies.
Choosing The Right Cryptocurrency Investment
To ensure the growth of your investment, choose to invest in cryptocurrencies that are widely supported and have a growing community. This widespread popularity is reinforcement that the community will continue to add value to the platform and investors will purchase with higher valuations.
The biggest names in crypto can be considered similar to Index Funds of the entire industry. In this sense, we suggest that the highest market cap platforms for investing. We suggest popular investments like Bitcoin (BTC), Cardano (ADA), and Solana (SOL). Some investments even offer interest to you in return for staking, meaning you can receive 1-5% returns on specific tokens such as Ethereum (ETH), Tezos (XTZ) and Cosmos (ATOM) on platforms like Coinbase.
Top Cryptocurrencies by Market Cap
*XRP Ripple Currency is currently banned from buying, selling, or trading in the US due to a SEC Lawsuit Against Ripple Inc. For Tax Evasion & Fraud.
Tech Giants Adapt to Blockchain Cryptocurrencies
It is useful to know that many blockchains are supported by major corporations, which have resulted in huge adoption and increased technological innovation.
Major Corporations that Support Cryptocurrencies
- Amazon Inc. and Walmart are partnered with Elrond Gold (EGLD).
- Amazon processes 25% of all Ethereum transactions in exchange for fees (paid in ETH).
- Google supports the Chainlink (LINK) Network.
- Facebook (Meta) are partnered with Decentraland (MANA).
These companies have invested heavily in the field of blockchain technology. We anticipate huge growth in this sector as the Crypto Phenomena has been a tech revolution in the field of digital finance.
Open and account to get started with your Cryptocurrency Investment Portfolio.