BEFORE YOU INVEST IN CRYPTO CURRENCY DO THIS 2 THINGS.

Crypto currencies has proven to be one of the fastest growing investments in the past few years, and it is slowing taking over the world. People now buy and sell using various crypto currencies such as Bitcoin and Ethereum, therefore, it is advisable for everyone to invest in this, but they are factors one must consider before investing in this. 

WHAT IS CRYPTO CURRENCY?

Cryptocurrency is a form of payment that can be exchanged online for goods and services. Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of this technology is its security. It can also be defined as a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.

From this definition it is obvious that crypto is truly worth investing in, but I want you to note something:

TRADING CRYPTO IS A 50/50 GAME.

This isn't only applicable to crypto currency, but forex as well. The financial market is so unpredictable, and because of this, no one is able to predict the direct in which the market will go next. With the help of fundamental and technical analysis, one can only 'predict' the next move of the market, but can never be sure of it. This is what makes crypto a 50/50 game, or should I say, 'a probability game'.

Now, before going into investing in crypto consider this factors:

1. HAVE A STABLE SOURCE OF INCOME.

If you understood my above point, you'll understand that you could make lots of money investing in crypto, and you could also go bankrupt investing in crypto. It is advisable to have a stable source of income so that in times if unfortunately the market goes against you, you will have something to live on. 

Imagine having $200 dollars has your whole savings and you're looking for a profitable investment, then maybe you see a commercial on TV, or on social media where this guys tells you he invested $100 in crypto and today he's a millionaire, and then you think about it and decide to put all your $200 dollar savings into it and unfortunately for you, the market goes against you, what will you do? What will you live on? This why you need a stable source of income before going into any form of currency trading, just in case of bad times.

2. HAVE A GOOD KNOWLEDGE ABOUT WHAT YOU WANT TO INVEST IN.

Let's talk a little on BITCOIN

The first ever cryptocurrency was (drumroll please) Bitcoin! You probably have heard of Bitcoin more than any other thing in the crypto industry. Bitcoin was the first product of the first blockchain developed by some anonymous entity who went by the name Satoshi Nakamoto. Satoshi released the idea of Bitcoin in 2008 and described it as a “purely peer-to-peer version” of electronic money.

Bitcoin was the first established cryptocurrency, but many attempts at creating

digital currencies occurred years before Bitcoin was formally introduced.

Cryptocurrencies like Bitcoin are created through a process called mining. Very different than mining ore, mining cryptocurrencies involves powerful computers solving complicated problems.

Bitcoin remained the only cryptocurrency until 2011. Then Bitcoin enthusiasts started noticing flaws in it, so they decided to create alternative coins, also known as altcoins, to improve Bitcoin’s design for things like speed, security, anonymity, and more. Among the first altcoins was Litecoin, which aimed to become the silver to Bitcoin’s gold. But as of the time of writing, more than 1,600 cryptocurrencies are available, and the number is expected to increase in the future.

Key cryptocurrency benefits

Still not convinced that cryptocurrencies (or any other sort of decentralized money) are a better solution than traditional government-based money? Here are a number of solutions that cryptocurrencies may be able to provide through their decentralized nature:

• Reducing corruption: With great power comes great responsibility. But when you give a ton of power to only one person or entity, the chances of their abusing that power increase. The 19th-century British politician Lord Acton said it best: “Power tends to corrupt, and absolute power corrupts absolutely.” Cryptocurrencies aim to resolve the issue of absolute power by distributing power among many people or, better yet, among all the members of the network. That’s the key idea behind blockchain technology anyway.
• Eliminating extreme money printing: Governments have central banks, and central banks have the ability to simply print money when they’re faced with a serious economic problem. This process is also called quantitative easing. By printing more money, a government may be able to bail out debt or devalue its currency. However, this approach is like putting a bandage on a broken leg. Not only does it rarely solve the problem, but the negative side effects also can sometimes surpass the original issue.

For example, when a country like Iran or Venezuela prints too much money, the value of its currency drops so much that inflation skyrockets and people can’t even afford to buy everyday goods and services. Their cash becomes barely as valuable as rolls of toilet paper. Most cryptocurrencies have a limited, set amount of coins available. When all those coins are in circulation, a central entity or the company behind the blockchain has no easy way to simply create more coins or add on to its supply.

• Giving people charge of their own money: With traditional cash, you’re basically giving away all your control to central banks and the government. If you trust your government, that’s great, but keep in mind that at any point, your government is able to simply freeze your bank account and deny your access to your funds. For example, in the United States, if you don’t have a legal will and own a business, the government has the right to all your assets if you pass away. Some governments can even simply abolish bank notes the way India did in 2016. With cryptocurrencies, you and only you can access your funds.
• Cutting out the middleman: With traditional money, every time you make a transfer, a middleman like your bank or a digital payment service takes a cut. With cryptocurrencies, all the network members in the blockchain are that middleman; their compensation is formulated differently from that of fiat money middlemen’s and therefore is minimal in comparison.
• Serving the unbanked: A vast portion of the world’s citizens has no access or limited access to payment systems like banks. Cryptocurrencies aim to resolve this issue by spreading digital commerce around the globe so that anyone with a mobile phone can start making payments. And yes, more people have access to mobile phones than to banks. In fact, more people have mobile phones than have toilets, but at this point the blockchain technology may not be able to resolve the latter issue.

We can see that bitcoin has a whole lot of benefits compared to the general decentralized money. I will still dive down to say that research is very important when it comes to investment. Do proper research and check the pros and cons of this investment you have in mind. If it suits you, then go for it, if it doesn't suit you, then it's probably not the best idea for you.

I once sold my phone for $100 to invest in forex, and because I never had a good knowledge about how the market works, I lost everything, and this has been one of my greatest regrets. Learn from my mistake.

IN CONCLUSION

Crypto is one asset I recommend everyone to add to their portfolios, but remember, crypto is a probability game, and cause of this, it is difficult to predict the exact direction in which the market will go next, so make sure you have a stable source of income to avoid going broke. Has I said earlier, research is very important in investment, do proper research to avoid costly mistakes. You can check out this article on 'mistakes young entrepreneurs face'. 

We would be happy to see you comments about what you think concerning this issue.

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