You'll find plenty of stories floating on the internet on HOW TO invest in cryptocurrencies. You'll also find stories on X Reasons WHY NOT to invest in them. Therefore, we at Hacker Noon , the Greenest Tech Publication in the Universe, arguably (for legal reasons), thought it pertinent to fill in the gap.. as always. For your reading pleasure… as always.
✳️ What Exactly is a Cryptocurrency?
So, first of all, cryptocurrencies are a paradigm shift in the definition of the word money. It can be created like FIAT (coded instead of printed) but it's a scarce resource like gold (hard-coded blocks on unlimited creation). This makes cryptocurrencies an alternative to other currency forms. Being completely digital, they can be sent from A to B, without any trusted intermediary. The emphasis is on the word trusted because cryptocurrency transactions are anonymized and then processed by the community itself - that's decentralization.
✳️ How do you Buy Cryptocurrencies?
In an ideal world, we'd all be mining cryptocurrencies using our computers, transferring it to our digital wallets, and then spending them as we want. No trusted intermediaries! Trustless FTW !
But, We Don't Live in an Ideal World. Do We?
Since only a few of us are mining cryptocurrencies, the vast majority of us find it convenient to buy it directly from a cryptocurrency exchange such as this newsletter's sponsor - ByBit. These guys are currently running a promotional campaign that gets you $10 worth of crypto. For Free. If you're gonna dip your toes, it's better to do it with somebody else's money. Right? Sign me up here.
✳️ Okay. I Got Me Some Crypto. What do I do?
Errm.. I'd rather tell you what not do. To see what to do with your crypto, check out these Hackernoon stories - here and here. Coming back. Now that you got yourself some crypto, here's what not to do:
Diversify - Contrary to popular trading mantras, diversifying your crypto "portfolios" is NOT the way to go. Cryptocurrencies are highly volatile and once they get going off in all directions, only you (and a few thousand other traders) will be the ones who end up losing.
Indexed Investing - Arguably, this holds true for traditional securities too. Indices are wildly inaccurate and are based on a human error-reduction bias. We think that something smack in the middle of the scale is a healthy mix of risk and safety. Frankly, investing is never linear - so please, throw that scale away.
Guru Trading - Combining what's called in the market as copy-trading or social trading to show why that's bad. Trading Gurus (the real ones) makes their money by staying ahead of the curve. If we're all aligned with their trade positions, that curve just moved a bit further ahead. Also, don't trust anybody else with your money. That's crypto 101. That's why we invented cryptocurrencies in the first place. Otherwise, banks and Fund Managers are already trading on our behalf. Remember how happy we were on 2008-09?
Chasing the Rainbow - There are 20,000+ cryptocurrencies out there that you can invest in. There are thousands of exchanges that you can trade them on. There are thousands of telegram/discord channels to notify you of self-conflicting upcoming breakouts and multi-baggers. How many permutations and combinations is that? Give us the right answer in a reply to this email and we'll send you a Hacker Noon tee shirt. Free!
Moral of the story: Don't chase Rainbows
Getting Sucked into Crypto Twitter - Remember McAfee Anti-virus? It's Founder became a crypto-convert a few years ago and wagered to eat his dick if Bitcoin didn't cross $500k by 2020. Track it here for the lulz. But yeah, don't get sucked into this. They're getting paid thousands of dollars to say stuff like that, allegedly (for legal reasons).
To get more insights to cryptocurrencies, crypto-trading platforms, and price analyses, check out our top cryptocurrency trading stories. If you have a few (or many) experiences to share, you can become a contributor on Hacker Noon too. Simply create an account, and join 10,000+ contributors sharing their knowledge and expertise with the rest of us. Maybe you'll get featured on our next newsletter too.
