INTRO — This Guide is to help people with zero experience in Cryptocurrency (CC) obtain a general understanding of some critical concepts and potentially give you some starting points to enter this market. For the seasoned Hodler, Trader, or Miner, this probably will be something you pass along to get people on the right. I will not be going into the depths of the technology here; that would be a monumental task about the same as writing a white paper on an entire technology sector. I’ll trust that you do your due diligence and research each specific project (coin/token/blockchain) to understand its use case. The goal here is to give you a launchpad into CC and break down some fundamental concepts, and there are resources to help you continue your quest for knowledge.
CURRENT AFFAIRS — It’s tough to gauge what level of maturity this market is currently at or approaching. At this current time in 2021, large publicly traded companies are adding this form of capital to their balance sheets because of its liquidity and its comparative attributes to Gold and Silver from an asset point of view. Come to find out that many companies have been secretly accumulating CC and planning a way to present this to the public during their quarterly earnings calls. Additionally, many investment firms are staggering to make CC available to their clients through any means necessary since demand has recently spiked and traditional investors quickly realizing value. Some speculation on the reasoning behind the newfound demand change of heart is the fear of loom monetary inflation and the latest weakening of the fiat monetary systems. CC has proved to help countries with inflation’s problems by being a more stable form of currency in the interim.
MY EXPERIENCES AND OPINIONS — My journey started in late 2017. I kept hearing whispers online about some ridiculous imaginary money call Bitcoin or BTC. Back then, it took real dedication to find CC news and info, and it was credibly hard to buy it since many of the exchange platforms didn’t exist or were unstable. Initially, I found it extremely the concept of CC tough to grasp, even though the use cases of Blockchain made sense to me, and I wanted some tangible evidence to relate. For the first year or so, self-educating myself on CC was merely a form of entertainment, but I felt like technology was something valuable. At the beginning of 2018, I was lucky enough to meet someone who had significant experience with CC, and not only did I understand CC, I also BTC for years prior, when it was not well known and when it was worth only a few cents per BTC. At this time, I had my ah-ha moment, and I was able to see the tsunami that is poised to hit us and forever change the way we look at money.
From that point on, my interest in Blockchain technology only increased. It’s been a long four years for me, but honestly, looking back to where we are now in the current technological landscape, we are ahead of schedule. Primarily because of factors outside of our control; pandemics, market volatiles, geopolitical issues, etc. With those factors in mind, CC adoption and awareness have accelerated and become more available to all. Again, getting into CC was a lot harder in the past and honestly had a certain stigma about it. Like anything good in the world, the human race will find a way to repurpose it for lack of better words. I’m glad I got in when I did and met the like minds to keep me interested here, especially now that stigma is quickly disappearing, and CC use cases make more headway.
HARDWARE WALLET AND SOFTWARE WALLETS — Honestly, the concept of hardware and software wallets are some of the more straightforward aspects of the CC space. CC wallets are very similar in concept to the physical wallets everyone currently has in their pockets or purses. Imagine your physical wallet or billfold has ten different Credit cards that you can use to pay with by adding funds to the bank account is assigned. CC wallets could contain ten different CC that you could use as a form of payment. In the beginning, your CC wallet will need to be load by buying CC directly from your Credit/Debit Cards or your bank. The only difference is that you are in total control of your assets instead of leaving out the middle work of the Banks. This approach gives CC wallets more of an advantage in dispersing funds and receiving funds when and where ever. At the same, this freedom comes with increased levels of responsibility with maintaining your wallets holding potentially several CC.
The most crucial aspect of the CC wallet is recovering it if you ever forget your password or lose the initial backup key, phases, etc. Some tout that HW CC wallets have more advantage over SW wallets since you have total control over your assets rather than depending on a PC or mobile device to host your SW wallet app. I think that the use of HW wallets better supports the whole concept of CC, but it’s tough not to want to use SW wallets because of their ease of use, and they are mostly free as well. Like all the other topics here, I want you to understand the basics and take your research further into the depths of CC so you decide your CC wallet preferences.
TRADING PLATFORMS, DECENTRALIZED EXCHANGES, SWAPS — I can tell that this topic and the next topic are probably the essential aspects of dabbling with CC. Why? It can become costly to learn as go or not have a solid trading strategy. I won’t be covering trading strategies in-depth, but I want to touch on the use of CC trading platforms, decentralized exchanges (DEXs), and all the following acronyms there. One of the most popular in the USA is Coinbase (probably the first one you heard of). Here you can buy and sell CC for a fee, like how many people buy stocks on other platforms. I honestly think Coinbase is the best starting point for most and is probably the most secure since you have control of your CC wallets here and use CC however you see fit.
Next, you have your Decentralized Exchange platforms to help you buy niche types of CC before they are widely known. These platforms usually have a robust set of tools to help savvy traders leverage their strategies. You can also exchange your fiat dollars for CC by either adding in a CC or adding your bank account. You probably start to notice earlier that the CC ecosystem trend is to trade or swap your CC for other CCs. That’s where Swapping services come into play, and usually, these swap apps are embedded into wallets, or they can be easily connected to the known and trusted CC software wallet apps. Without some of those native connections swapping CC can be cumbersome.
Again, the best launch pads for beginners are Coinbase and Gemini since these platforms are both reputable and first movers in the USA CC markets. They helped drive adoption and remove some stigma and complexity from the buying process. Additionally, these platforms give more flexibility to your CC assets by holding your CC in wallets that you have access to. (Important foot stomp here) I can tell from past experiences that this is the ultimate goal for CC hodlers is to transact your CC however you see fit.
SIMPLE INVESTING STRATEGY (DCA) — I could leave this section out, but I’ll leave this in for everyone looking for the most successful and the most straightforward strategy towards investing in anything that’s traded. Dollar-Cost averaging (DCA), at its simplest form, is buying CC frequently. Weekly, bi-weekly, or monthly; honestly, whatever you can afford. Even if it’s 5 dollars a month, you will see returns down the road as long as you have patience and know when to sell off some gains. (Please see some articles about DCA) This approach has worked for everyone I know that has done it correctly. Just think of this the same way you would approach adding money to your checking or saving account regularly and having a higher return of the course time.
DECENTRALIZED FINANCE (DEFI) — LOANS AND PASSIVE INCOME — Decentralized Finance (Defi) is gaining popularity since routes to making passive income or receiving loans, if needed. Initially, I came into CC chasing the gains like many others looking for the next to get a rich quick idea, but I quickly learned that those moonshots (CC that shoots up in price like penny stocks) are not as easy to predict or may take years to come to fruition. I’ll use one example to highlight some of the passive income methods and provide one Coin that simplifies this effort.
Many CC wallet providers will allow you to stake or join liquidity pools to earn interest CC, and you get paid interest on it by loaning it out to others. DeFi enables CC users to obtain access to capital quickly, and in amounts, they would be considered micro-loans. One tip is to look at CC that pays interest in more crypto by holding it in most wallets like, Tezos. Other stable coins (coins that don’t lose or gain value) can serve as effective forms of passive income and usually have the highest interest rates. Additionally, holding these stable coins can be great on-ramps for jumping into other positions for CC when you are ready to trade.
MINING — Mining should be left to the most experienced CC players since it’s complicated and expensive to get started. The majority of mining efforts are based around computers running 24x7 to validate transactions or solve complex math problems for its specific Blockchain. The reason people set out to mine CC because with every cryptographic equation solved, they obtain a reward in the form of that CC. With most CC that have minable tokens/coins, the value of those coins goes up due to being a limited supply to mine and or the difficulty of the mining operations go up, and or the math work is harder to do.
ICOS/PRESALES — Token and Coin presales are where the boom and bust of the CC world come into play. This area is where extreme caution needs to be taken when you urge to go head first. The big difference between Initial coin offerings (ICOs) and Presales is where the CC project/ product is in its life cycle. A Presale happens when tokens are offered before the project is complete or when the technology is still under development. ICOs happen when projects are finalized, and the tokens are listed on major exchanges. Many times, ICO and Presales are viewed the same as penny stock since many of them have taken off in their beginning, and at the same time, ICOs and presales are hard to value at this point, so they have a high rate of failure as well.
AIRDROPS —Are just another way to help bolster ICOs or presales by just giving the tokens or coins away for free to raise awareness. There is usually a nominal fee to have those tokens dropped into your wallet, and on rare occasions, they are Airdropped for free. The fees are usually paid in the same blockchain technology that the CC is developing on. This approach is usually lower risk than buying ICOs but usually doesn’t have enough volatility to
be a coin that can skyrocket in price. My approach here is to get in early and wait on the CC to either gain traction or die off a slow death. Also, both of these trajectories could take years to make sure you don’t lose access to your wallets.
NFTs — In some of the most recent craze over CC, the Non — Fungible Tokens (NFT) world has taken off. It might be one of the most practical ways to leverage blockchain technology across many different industries since NFTs are be publicly verified by anyone. Meaning that whatever the NFT represents: rare digital Art, are NBA ticket, or a hat to wear in the metaverse. The NFT easily and immediately verify that item’s authenticity without experts or wasted time. The most practical use case so far is how NFTs are being used for digital art and artifacts. Unlike the physical art world where forgeries may have been in circulation for probably 100s of years without anyone’s knowledge. Each NFT can digitally be verified, and it would be tough to fake or reproduce another unauthorized copy. Many of the latest articles about NFTs mention how these CC can be leveraged in the legal world for intellectual property and patent law.
THE CULTURE — In the beginning, CC early adopters weren’t accepted into the mainstream and were frequently referenced to nefarious events or bad actors on the deep or dark web. Now the CC culture and current atmosphere are hard to rival because of its massive opportunities and mindset towards change. Social Media has been a catalyst towards driving adoption and helping to bridge the gaps between the informed crowd and outsiders. Celebrities and athletes have also seen the opportunities held here and are beginning to flock towards leveraging their influence to drive adoption and help grow the Blockchain ecosystem. The movement here seems to have not leveled off and only seems to grow as time goes on, and with that said, there are many ways to make coins and lose coins. The bottom line is doing your research, being cautious, and only spending what you can afford to lose.
USE CASES AND FUTURE OUTLOOK — As mentioned above, NFTs may augment the use of the patents and digital items; there are many other uses available for CC or Blockchain technology to leverage. One of the most recent use cases for the Cardano blockchain is building entire countries’ digital ID platforms, which is pretty epic for digital identities. In a recent CC conference, educators mentioned that specific state-funded education systems are looking to leverage blockchain tech to issue academic credits and courseware to their students. Blockchain back education could enable both students and educators the flexibility of producing and consuming content in a digital environment while having the ability to validate the student’s success. If anyone has ever had to request a transcript from a past academic institution, they know what cumbersome experience it is.
FINAL THOUGHTS — Dabbling in CC on your first several experiences may seem daunting and may even create some anxiety. Take it slow and steady because nearly everyone feels the same in the beginning until they get their first experiences with some who knows much more than them. The most important aspect for getting started here is securing your CC wallets and keeping track of your private keys or backup phrases. There have been times when computers or phones fail, and you will need access to this info, so having it written down in a fireproof box, even if it may seem old-fashioned, it’s the only way to ensure you in full custody of your CC. Additionally, as things progress, you may want to consider a hardware wallet to store your CC for the term, especially if you purchase a rare NFT or hold some coin with some deflationary aspects. Lastly, there are currently many ways to enter the CC arena, and at times it seems like the wild west because it is! So only take on the risks you can afford to handle.
https://bitcoin.org/bitcoin.pdf — ICO/tech
https://ethereum.org/en/whitepaper/ — ICO/tech
https://uniswap.org/whitepaper.pdf — ICO/Exchanges
https://wiki.tezosagora.org/whitepaper — baking/passive/staking
https://www.allcryptowhitepapers.com/atomic-wallet-coin-whitepaper/ — wallet/swap/airdrops
https://nakamotoinstitute.org/bitcoin/ — Use case