Current Events > Cryptocurrency investing

(+) Yeah! (+)

How does it work?

Like are you investing in different coins? Bitcoin? Coins from banks?

---

You create an account on an exchange and buy shares or partial shares like you would with normal stocks.

---

coins go in
coins go out

You hodl until the end of the sun.

---

Shares of what coins though? Like a diverse portfolio similar to what a bank offers at times?

---

Austin_Era_II posted...

Shares of what coins though? Like a diverse portfolio similar to what a bank offers at times?

Whatever coin you want to buy. Research the exchange first to see if they offer the coin you want to buy. You could also mine coins yourself, but that's not really viable these days for a lot of them.

---

With so many coins in the market now is it even worth getting into? What kinda return would I get on my money 20 years from now? And how can I turn it back into money to use into my bank account?

---

Austin_Era_II posted...

With so many coins in the market now is it even worth getting into? What kinda return would I get on my money 20 years from now? And how can I turn it back into money to use into my bank account?

No one can really predict your potential return or loss. Personally, I'm not in any crypto at the moment, though, so I'm not an expert into the current outlook of various coins.

The easiest way to turn a coin into cash is to sell on your preferred exchange.

---

There are at least three types of crypto "investors": those who legitimately think crypto should and will replace fiat currency, those who see bitcoin millionaires and buy some of the more mainstream stuff to "wait and see", and those who barely understand what crypto even is and day trading based on "hot tips" or "promising new crypto technology" or "price momentum" or chart analysis.

I would recommend you read a book by one of the people who believe crypto should replace fiat and decide what you want to do from there. Crypto, in terms of an "investment", is a highly unregulated market with thousands of useless "currencies" which can have humongous price swings in a matter of days or even hours. Actual prices, and even the value of crypto itself, is more or less based on speculation that these will one day be considered legitimate trade currencies.

---

I don't think it'll replace the fiat currency especially for the black market as that helps with the cycle of capitalism.

---

Go through this link for the basics of blockchain fundamentals.
https://atomicwallet.io/academy
https://blog.chain.link/what-is-the-blockchain-oracle-problem/
https://blog.chain.link/what-is-a-smart-contract-and-why-it-is-a-superior-form-of-digital-agreement/

Watch the the below video and literally every video from the #Smartcon Smart Contract Summit (hosted by Chainlink) that took place this past weekend. You'll know understand what's going on in the blockchain world and what problems they're aiming to solve. The blockchain is the biggest innovation of the stagnant financial world in the past 30 years. It's going to change the world. Big name companies from IBM to Oracle to Microsoft are contributing heavily and we have Banking and investing entities from JP Morgan to Fidelity Investments heavily researching and contributing to the field. They have to, as De-Fi, decentralized finance is aiming to replace the banking system as we know it.

https://www.youtube.com/watch?v=dC3PUvHbVDQ

But if you don't care about the technology, cryptocurrencies are equivalent to shares but also have utility functions in whatever service the developers are trying build. But it behaves exactly like the stock market, irrationally, but it doesn't close after 5PM EST.

---

Is blockchain something to invest in also?

---

Austin_Era_II posted...

I don't think it'll replace the fiat currency especially for the black market as that helps with the cycle of capitalism.

I myself got caught in the crypto craze, so I have a bit of money in a "portfolio" left. Here's the price graph of the last week:



The local high here is about $215 two days ago. Looks like the stock drop today is crashing crypto prices. What do stock prices have to do with crypto? Nothing, really. In theory, though, investing in crypto should be like investing in gold (or so the argument goes), but usually crypto prices trend with stock prices.

Now here's the last year where, IIRC, I did not touch this at all:


The beginning is $171, and that deep low is $87, coinciding with the pandemic crash. Now, for traders, they could make a lot of money off of this crazy price fluctuations. But as an "investor", there is no reason to believe these will have any value unless they are one day a commonly accepted for of currency. But the real bulk of people in the "market" are trying to buy low and sell high as much as possible, which is part of why these price swings even happen.

---

Regardless, though, there are some interesting arguments for why crypto currency will be important in the future, and they're worth reading/listening to.

---

Austin_Era_II posted...

Is blockchain something to invest in also?

All cryptocurrencies are on a blockchain, and blockchain is definitely something you'll want to read up or watch on before you get into cryptocurrency.

Or read the White paper for Bitcoin, the first blockchain ever created: https://bitcoin.org/bitcoin.pdf

---

I see there's a blockchain eft? Maybe I should get into that from my TD bank's broker? If they offer it. I'd invest long term. At least 20 years from now. Putting a bit into it each month.

---

Austin_Era_II posted...

Is blockchain something to invest in also?

It's the breakthrough technology that powers bitcoin. It's a distributed ledger viewable by anyone in the network. That means I can view ALL your transactions you've made in the network and you can view mine. It's really just the infrastructure to makes the bitcoin possible.

And the bitcoin, what makes it such an important innovation is that we now have a viable banking system where you can send money to anyone, anywhere, and no one can stop you. If you wanted to move $20,000 to your account, the banks will freeze your account, and you'll have to explain where that money came from. If you wanted to send money to a relative in another country, it could take days to clear and there would be a hefty fee to pay for the transaction. When I did a moneygram transfer to a relative in the Caribbean, she had to get it the next day, and they charged me $20 of the $500 I sent. If this was on the bitcoin network, I could move millions of dollars and it would taken minutes to transfer, and cost me 50 cents. This is the biggest feat of the bitcoin, and now countries and banking institutions are scrambling all over to research its technology as we now have a banking system that can compete with the current banking system dominated by the US dollar, which many countries are aiming to topple.

Now the bigger spinoff technology that came about from the community is smart contracts. These are programs that exist on the blockchain. What separates them from regular programs is that they're immutable, you can't change them as they are copied onto every node on the blockchain, and they execute based on events. "If X then Y". If you want to buy from a shady crypto seller, instead of trusting that they send you crypto after you send them money, you can use a smart contract to handle the settlement. If [you send in the specified amount] then [seller sends specified crypto]. Replace crypto and we can apply this to all commerce and not have to worry about needing a middleman, a reputable site or human controlled entity (Ebay, Amazon customer support) to make sure people play fair. There considerably more applications but the major boon of all this is that we're eliminating the need for trust.

The blockchain community ended up building a new platform dedicated to smartcontract development, Ethereum. And this how the cryptocurrency count exploded as Ethereum allows you to generate your own cryptocurrency, called an ERC-20 token for whatever crypto project you're building. This is where you'll look for the newest hottest projects. You gotta sit down and research these things. It's a massive world and it's rapidly growing.

Alternatively just turn off your brain, open a Coinbase account and buy Chainlink.

---

Austin_Era_II posted...

I see there's a blockchain eft? Maybe I should get into that from my TD bank's broker? If they offer it. I'd invest long term. At least 20 years from now. Putting a bit into it each month.

I think with any blockchain ETFs, you're investing in companies who are using blockchain technology or developing applications around it. They may be good tech growth investments, but it's not the same as buying actual cryptocurrency.

---

I see Nvidia, CME & Square deal with blockchains. So good to start with those companies?

---

Theon_Greyjoy posted...

I think with any blockchain ETFs, you're investing in companies who are using blockchain technology or developing applications around it. They may be good tech growth investments, but it's not the same as buying actual cryptocurrency.

Would it be better to invest more so into blockchain tech companies rather than actually buying different types of crypto?

---

Austin_Era_II posted...

Would it be better to invest more so into blockchain tech companies rather than actually buying different types of crypto?

It depends what you're looking for. I had these thoughts a couple of years ago when I got into crypto, but I decided not to go with the ETFs. Cryptocurrency is more high risk/high reward, and I like the idea of owning digital assets or "digital gold." That's one of the best things about blockchain technology, that for the first time ever you can actually create a digital asset that can't be altered. And Bitcoin can't get busted for fraud and become worthless like a corporation can.

---

What cryptos are you investing in right now?

---

Austin_Era_II posted...

What cryptos are you investing in right now?

I buy Bitcoin, Etherum, and Chainlink. And a little bit of Unibright but that's pretty niche right now.

---

You buy from a bank or a broker?

---

I place limit orders on the exchange Coinbase Pro. Probably easiest to start with regular Coinbase (broker) first, though the fees are higher.

---

What fees does Pro take? I cannot stand high fees -_-

---

Coinbase Pro fees are .5%

---

Can you use just the base to buy then use pro to pull the money out so less fees?

---

The fees to buy are .5% on Coinbase Pro limit orders, and 1.49% plus the spread on regular Coinbase. I'm not sure about withdrawing money since I haven't sold any yet. But yes you can move your coins and $ between the two.

---