Cryptocurrencies or cryptos for short are all the rage these days. But what exactly are cryptocurrencies and more importantly, should you invest in them?
What are cryptocurrencies?
In a nutshell, cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, independently of a central bank.
In other words, cryptos are deregulated and do not depend on financial institutions to be sold, bought, controlled or traded. Essentially, cryptocurrencies are limited entries in a database that no one can change unless specific conditions are fulfilled.
The entries in a database are referred to as blockchain since every transaction made with this currency is added to past transactions, thus in essence forming a chain of transactions.
The most popular cryptocurrency today is Bitcoin, which has been around for nearly a decade and enjoyed explosive growth in late 2017, reaching a staggering $17900 value per coin on December 15th 2017. Considering that the originally purchase price of Bitcoin was only $0.008 per coin, people who had already invested heavily in Bitcoin by end 2017 raked in a fortune. Yet less then one month later, i.e. January 5th 2018, Bitcoin’s value had dropped to $6200. It has continued to drop ever since.
Other popular digital currencies are Ethereum, Litecoin, Bitcoin Cash, Ethereum Classic, Ripple, and Mem. For a complete list of all existing cryptocurrencies please visit Coin Market Cap. (Clicking on the link will route you away from our website to a website not associated with us).
Should you invest in cryptocurrencies?
At TMI we believe that owning a diversified investment portfolio is a much more sustainable, safer and profitable investment strategy than having all your eggs in one basket. As such, cryptos should be a part of your investment portfolio. Realize however, that cryptocurrency is still in its infancy and extremely volatile (as evident by Bitcoin’s sudden sharp price increase directly followed by a major price drop during a very short time frame).
Therefore we suggest that you invest some money in cryptos using a conservative approach. As cryptos become more popular, are better understood and are more stable, you can always increase you investment in this market.
Above all make sure you understand cryptocurrencies before you invest. Knowing what cryptos are, how they work, what they can be used for, how many units of one crypto are made available and so on will help you in deciding which digital coin you like best and makes a better investment for you.
A detailed cryptocurrency guide is offered free of charge by Block Geeks. This is a perfect ‘beginner’s guide’ which will teach you everything you should know about cryptos. Another site offering great insight into cryptocurrencies is BitDegree. Please note when you click on one of the links you will be routed away from our website to the Block Geek or BitDegree website. We have no association with either company.
How to invest in cryptocurrency?
There are several brokers online offering cryptocurrency investing and/or trading. The most popular by far is Coinbase. The company offers an easy to understand website that allows anyone (including novice traders) to buy/sell cryptos quickly and easily using real money. The only disadvantage, in our opinion, is the limited number of digital currencies the company offers presently.
Of course there are many more crypto exchanges/trading companies accessible online.
Click here for a list of the top seven crypto exchanges. Please note, when you click on the link you will be routed away from the TMI website to a 3rd party site. We have no affiliation with this site.
TMI and cryptocurrencies:
At this point in time, TMI does not invest in cryptocurrencies. However that may change in the near future once we believe cryptocurrencies have become much less volatile. With new cryptos being minted nearly every day, the market is already saturated with digital currencies thus adding to the existing volatility. Once the market settles and a few more ‘stable’ currencies emerge, TMI will most definitely invest is this market as well.
We will inform you when we are ready to take this step.