Why People Like Bitcoin, Crypto For Beginners
Crypto for beginners, today we’re going to talk about crypto tesla and square are holding cryptocurrencies people are boasting online that they 100 x their investments that they became millionaires because they bought this particular coin a couple of months ago I can’t really call myself and I started buying bitcoin in 2017.
This article is for informational purposes only and if you’re like I want to get into this crypto game I want to start buying why is everyone talking about crypto I really want to get into it if you’re interested to Read this Article up to the very end it consists of four parts, first of all, we’re gonna talk about bitcoin and how cryptocurrencies work.
Second, we’re gonna talk about why bitcoin is so controversial because a lot of people would tell you this is a scam this is a pyramid don’t buy bitcoin we’re gonna address all the issues so you can sit down with yourself and decide how risky you are how comfortable you are with everything.
I’m gonna talk about a third we’re gonna talk about my reasoning behind buying bitcoin and other currencies we’re gonna talk about what I use to buy currencies and which apps I use to hold them and last but not least I’m gonna share my portfolio allocation and reasoning behind it okay.
Is cryptocurrency a good investment? Crypto For Beginners
So what is bitcoin and cryptocurrencies there are hundreds of cryptocurrencies so you hear dogecoin Ethereum Polkadot every day there is a new coin but bitcoin is a pioneer and it’s by far the biggest cryptocurrency around and when I say the biggest we’re talking about the market cap?
So if we take all the bitcoin and calculate what’s the value of them that will be your market cap so today’s market cap is around 900 billion dollars and if we look at the top 10 coins by market cap there will be bitcoin Ethereum finance coins Solana Cardano ripple polka dot dodge coin tara and avalanche now I rely on these top 10 in my investment strategy.
But we’re going to talk about it closer to the end of the video now what is a cryptocurrency the world crypto literally means concealed or secret cryptocurrencies use cryptography to allow transactions that mean that you don’t need a bank you don’t need a government.
You don’t need any third party in the middle for transactions to go through and before crypto normally a currency would be issued by a government the supply will be controlled by the government but cryptocurrency takes the power away from government banks etc.
And it distributes the power among cryptocurrency holders now let’s talk about the ledger that holds everything together so bitcoin started back in 2009 and we can think about bitcoin as this huge spreadsheet where every transaction is listed in a way that you can go online and see which wallet holds.
Transparent Transaction Crypto For Beginners
What which wallet sold bitcoin which wallet bought an Nft every single transaction is transparent you can’t really know the names of people who are transacting because their wallet is a set of numbers and letters it is not in any way related to their first and last name it’s just this random set of characters and last but not the least cryptocurrency is decentralized.
And what this means is that every person in the world can have a copy of this master spreadsheet on their computer and so with bitcoin there are millions of people who have this spreadsheet on their computers and there is special software that’s constantly checking whether their spreadsheet is up to date.
And it’s the same as every other copy of a spreadsheet on the network think of it as a google spreadsheet that is updated in real life but with google, spreadsheet google actually owns it and google can say you know what I decided to discontinue google spreadsheets and I delete all of your data by buying well I don’t know if they can technically do that.
But they own your data they control it with bitcoin ownership is decentralized so there is no person or government that could come and say you know there is no bitcoin anymore we cancel it they can only prohibit it within their own country but they cannot delete the system like this is what decentralization means there is no one in control of course.
There are big huge players that are holding a huge amount of bitcoin and they can influence the price by selling huge amounts in a way that it is built it is impossible to hack bitcoin because millions of people all over the world are helping maintain it now let’s talk about why crypto and bitcoin is so controversial now theoretically.
The whole system is decentralized and maintained by millions of nodes all over the world in practice there are these things called crypto exchanges to think them like new york stock exchange London stock exchange where you can buy and sell crypto and this is Coinbase finance Robinhood but I have this experience with one of the crypto exchanges.
Where you think it’s decentralized and nobody controls it but then I tried to send one Ethereum to a friend and I got blocked for 10 days because the crypto exchange thought that my transaction was suspicious so in reality, my experience is not really different as if I was making a wire from a bank.
So I was blocked for 10 days and I wanted him to invest my Ethereum in this deal that he was a part of and so I couldn’t participate in that deal and I felt a little that I was back in the old world you know where somebody else controls my money there are also some security issues with accounts being stolen.
Two-Factor Authenticator Crypto For Beginners
If you didn’t have your two-factor authenticator or you stored your seed phrase somewhere online by the way a seed phrase is a series of words that gives you access to your wallet so as long as you have the seed phrase you have access to your wallet think of it as login and password in the old world.
But if somebody gets your seed phrase that basically means that you lost all your crypto and another thing with these exchanges that you need to remember is that you don’t really own crypto there because an exchange is not your wallet so what my experience has been if you bought a bitcoin in an app.
That is just an exchange you need to transfer it to your wallet and again your wallet is a set of numbers and they can say oh my god this transaction is suspicious block your account so these platforms are kind of giving you access to a certain amount but it’s not like you’re necessarily holding it like for me the good example be like you’re buying gold.
Sometimes we would go online and buy an ETF for gold right you can either buy an ETF which means you’re kind of speculating if its price goes up then you have more money in gold you can also buy a real bar of gold and it’s here and you can make earrings out of it right.
Crypto basics Crypto For Beginners
So when we think about buying bitcoin on a crypto exchange its price goes up and down but if you really want to use it in metaverse buy things you need to transfer it to your wallet and there are fees associated with that so if you want to physically own your crypto and have control over it there is another way to store crypto.
Crypto wallet one of the most trustworthy wallets out there is ledger secure all your crypto and give you full ownership of your assets and provide you with ease to use it supports over a thousand coins and transferring your assets to it is really easy so this is basically where you can store all your crypto.
Um and uh their live app is where all the exciting things are happening you can buy crypto you can sell crypto you can transact you can also discover a section such as a rainbow. me to visualize your NFTs or Sirian to access defy and many more to come such as wearable on the trading platform fix and this app operates together with this physical wallet.
So basically whatever you do in the app you buy an NFT you buy some coins they will be here automatically and then whenever you go there with you and you don’t have to transfer your assets manually or pay a fee when setting your device it generates a list of 24 words a master key that will manage your private keys.
One key to rule them all these 24 words are the only way to back up your crypto and you’re the one responsible for the ski so basically if you lose it you lose access if somebody gets access to your key they can take all the crypto so, on the one hand, we don’t have any controlling authority.
How do I protect myself? Crypto For Beginners
Who can block your account take your money away whatever at the same time there is no authority who you can go to and say oh sorry hi I forgot my password can you please reset it this means that you have to be really careful and really attentive.
When you first set up this wallet I don’t know have your secure password app or whatever you’re using maybe there is a piece of paper that you’re going to use to write your seed phrase on and then you’re going to hide it somewhere in your I don’t know like whatever you do make sure you are doing this consciously not like on the run.
Because this can affect your future because this can really uh be worth a lot of money and of course you should never share this phrase with someone you don’t trust don’t share it with anyone maybe like your spouse or you I don’t know up to you but someone you trust.
Because if you know this phrase again you can do anything with the wallet and as I said at the beginning of this Article it is not a call to action to go ahead and buy crypto this is an informational article so you know what people are using to store their crypto in a secure way how a c phrase works.
Uh, what is this all about so let’s see what we have here in the ledger live app you can see your portfolio here you see how much money you have invested in crypto your accounts here you can see each account for each crypto that you have transferred here you can send receive buy sell swap and land your crypto next is the manager?
Where you can download different apps for different cryptos and the last one is setting recently ledger announced that they’re launching a debit card it’s built to be compatible with the ledger ecosystem in partnership with banks finance solution provider so basically, with this card, you will be able to stay in crypto until.
The last moment it would convert your crypto into dollars when you actually make the payment which is kind of cool so you don’t have to sell your crypto before you actually need fiat money and fiat money is dollars if it sounds like the card you want if you want a secure solution to all your crypto operations to check out the ledger.
People Sceptical About Bitcoin Crypto For Beginners
The next thing that makes some people sceptical about bitcoin is that it’s fluctuating like crazy so these days bitcoin performs as a very volatile stock its price is controlled by demand and supply so if people are hyped up about bitcoin if they want to use it for their transactions if they just want to buy more of it.
Because I don’t know tesla bought bitcoin square bought bitcoin then its price goes up if people become sceptical about some or somebody famous posts a tweet about bitcoin not having a future then people sell it and the price goes down so it’s super volatile it can lose 10 20 in a week also bitcoin is not controlled by any government.
So theoretically it can go down at any moment like if everyone is who’s holding bitcoin decides that it’s worthless like I don’t know we started using all the applications where we can use bitcoin to buy things but suddenly they’re all useless nobody’s using it then yes it can crash and go to zero and we’ve actually seen a lot of points go all the way to zero.
Like my personal opinion and you don’t have to rely on it but right now I think that crypto is here to stay and we’re seeing more and more applications with NFTs with people excited about owning digital assets with people excited about you know owning digital clothes and transferring them into their metaverse and going from one metaverse to another.
Like this is all just starting out but being able to transfer your money like for me being an international person I can transfer my crypto to my mom and there is no currency or government control.
which comes in when you transfer dollars or whatever because some countries, for example, have very strict rules about uh sending money abroad like sending bitcoin is super easy.
Energy Consumption Crypto For Beginners
Energy consumption so because we need millions of computers all over the world to support a decentralized system yes they’re consuming a lot of energy to maintain the system which has a negative impact on our environment now anti-bitcoin people say that it takes a lot of computing power slash electricity to maintain the system.
And it is hurting the environment people who are pro bitcoin say that you know if we take the banking industry it consumes a lot more resources to maintain the offices to maintain all of their servers and computers so bitcoin is better but it’s up to you to decide which side you’re on another argument is that bitcoin or crypto is used for financing illegal activities.
And uh this is true because you can create as many wallets as you want and they’re not tied to you they are just set of numbers and letters and nobody can really identify you because you can again create as many wallets as you want and you can transfer money to pay for legal goods illegal services or whatever in fairness people can do all kinds of illegal activities.
And they do with regular currencies like dollars or any other currency but anti bitcoin people say because uh fundamentally bitcoin is anonymous it’s eviler but again I think everything is controversial like the internet it could be good or bad depending on how you use it okay.
How do I invest in cryptocurrency? Crypto For Beginners
Why I invest in crypto first of all I’m this person and this is who I am I live in silicon valley I want to try everything that’s new sometimes I fail and sometimes I find something exciting so as I mentioned I started investing in 2017 when everybody was hyped about bitcoin I didn’t really understand the technology behind it it was just all of my friends invested.
So I decided to buy some then it plummeted and I sold up to my friend which is a different story but this time I am buying well again fomo plays a big role because I see how it’s growing and like at first I was sceptical you know how this meme goes I’m not gonna buy bitcoin because uh it is a scam.
Oh what’s the price of bitcoin today tell me how you buy it so this is basically my last year and I decided that I would start investing little amounts every month uh because of dollar-cost averaging in my strategy among all of my assets so I just automated buying bitcoins.
So that I don’t spend time and mental energy tracking the market timing the market so my participation is automatic now another reason I buy bitcoin to ether and other currencies just because I want to be a part of different exciting things happening online I want to buy an NFT I want to create my own NFTs we’re working on an app that would help creators fund their videos.
I want to be able to participate in ideos which is an initial decentralized offering where companies don’t IPO but it’s like IPO but they issue their tokens so I want to do that there are so many exciting things happening and you need crypto to participate in them like buying a dot eth domain name linguamarina. eth is something I own now.
I want to be a part of this exciting world and last but not least I want to diversify my portfolio I believe in the stock market I believe in government bonds but I also want to have this fun part which is just starting and I won’t experience it myself so as I mentioned there are different ways.
How to Store Crypto, Crypto For Beginners
How I store my crypto I have some of my cryptos here as I said earlier in this Article keeping your crypto on a hardware wallet like a ledger is the most secure way to store your crypto and this is the only way you actually get full ownership of it the ledger live app makes it really easy to use since you can do everything buys sell exchange and stores in one place.
I have twenty-two thousand dollars worth of crypto on my blog fi account it basically pays you from six to twelve per cent interest because you hold crypto there and if you want to use block five-ten dollars worth of bitcoin.
I use coin base I started using it back in 2017 and I have 21 000 worth of crypto on my coin base and then meta mask is your digital wallet so think of it it’s similar to ledger but it’s online so you don’t physically own it but you own it online with again no one controlling.
So you can transfer from one meta mask to another without somebody coming in and saying oh this transaction looks suspicious and again the same kind of principle if you forget your seed phrase you lose access to it and on my meta mask I have two accounts I use meta mask to buy things online for crypto.
And um I have around six thousand dollars worth of Ethereum on my meta mask in general crypto is less than five per cent of my portfolio so I’m not a risky person at all so I am going to keep it that way the strategy is to buy oh and there is one more app that I use it’s called Binance again you don’t have to use all of the apps.
Ideally, you use one or two uh on this app I have fifteen thousand dollars worth of different coins so you don’t have to use all of the apps but what I found is that Binance has lower fees block five pays you good interest, uh meta mask is just good for transacting online ledger is one of the safest ways and it’s a physical wallet.
Whenever everything that I mentioned before is digital so basically coin base is in exchange finances in exchange and I use them to buy crypto well coin base no longer use I use Binance and I use ledger live app to buy crypto then you have wallets like your actual wallet that you can use to transact like buy things buy an NFT and here I have meta mask and ledger.
And then you have like a savings account that pays your interest and this is block fi I would say pick a one in each category because if you want to get into the world of crypto seriously then it’s good to have a taste of how everything works in terms of which coins I buy so there is there’s been a lot of research and yes there are a lot of coins that get thousands of accent value.
But if we look long term uh investing in bitcoin and Ethereum consistently is one of the best strategies out there and it doesn’t require a lot of mental energy because I am a content creator I’m not a professional investor I don’t even want to spend an hour a day researching.
What’s happening in the market I want to have a strategy that would require minimum attention from me that would have less risk and it would still get me into this exciting world of investing cryptocurrencies so I buy bitcoin Ethereum Solana remember we talked about the top 10 coins by market cap basically I selected five from them bitcoin Ethereum Solana Matic and polygon.
And I’ve been buying them consistently the most important rule for investing in crypto because it’s so volatile and we’re still figuring out whether we would actually need it later in our lives like invest only the amount of money that you will be comfortable losing 100 so it’s less than five per cent of my portfolio.
I love playing with it I love sharing what’s going on with crypto I love learning about it but I’m also being really risk-averse if you can say that so it’s less than five per cent of my portfolio thank you guys I really hope it was useful and I hope I got you excited about researching more about crypto and uh researching more about this whole new web 3.0 slash blockchain world thank you.