Cryptocurrency – my 5 cents

Crypto-currency, the most wel known is the bitcoin, but there are many. New ones come up almost weekly and others are dropped and fade into oblivion. On the site worldcoinindex there are some 1742 crypto currencies listed in total. I am sure there are more. The value of one coin ranges from, at the time of writing, one bitcoin is valued at about € 7400 to another crypto coin that has a value of € 0.00014398 or even less than that. To clear a misconception out of the way, you do not need to buy one bitcoin. You can spend like € 50 and you could get something like 0.00675 bitcoin or 0.97 NEO (to name another coin).

Before you can buy a coin you need a wallet, similar to the one in your pocket. There are a few options each with advantages and disadvantages. The most risky one is the wallet in a cryptocurrency exchange (there are several). In an exchange you can convert a coin into another coin and hope you make a profit. It has been known that a few currency exchanges were hacked and huge amounts of money was stolen. So it is risky. Another type of wallet is a software wallet, this is either a piece of programming on your computer or mobile. Again there are several options, like coinomi and jaxx for a few coins or a specific wallet for one coin.  They all have some safety like you need to remember the safety words and or safety private key to access it and these words or keys you need to keep in a safe place. The last option and the most safe one is a hardware wallet. Again you need to keep the safety words and private key very safe, but remember you need know where it is. The coins are saved in there. There are rumours of some rich people that have a large amount of bitcoins saved in a hardware wallet tucked away in a safe. Advantage: it is very safe only you can access it, but the disadvantage is if you lose the safety words/key you lost the money in it, all of it.

Similar to stocks the prices go up and down as can be seen in a crypto exchange, they go up and down faster and my guess is, more extreme also. It is a very volatile market. You hear and see on tv some person making huge profits. What you rarely see or hear about is that there are people who sold everything they had and invested all their money in bitcoins or another crypto-currency and lost everything they owned. So if you want to go into this, be careful, read, get yourself informed and watch tutorials, look the prices over a period of time and more important only use money that you can affort to lose.

Another way of getting coins is mining. Either you mine yourself on your computer or even your mobile, but this takes time even with a special graphis card (using your mobile it takes a lot of time) . Pro: you can mine many different coins. Con: It is slow, especially if like me, you only mine when you put on your computer. My reasoning is that if I put on my computer doing stuff, browsing, read facebook, playing games or whatever, I can mine in the background and after a year I should have a bit of return. So far I have mined a total value of €5 per month (not a huge amount I know). So it is more of an hobby. It can go faster if you buy special equipment, like an antminer. Pro: an antminer is faster. Cons: You can mine only one coin. It takes a lot of electricity (like a washing machine). The cost of one machine can be, depending on the coin you are going to mine, something like €1500-€3000. That is quite an investment.

If you consider buying an antminer to mine bitcoins, my advice is don’t. You are too late. It is better to do the option below, cloud mining.

The other option of mining is cloud mining. Now this also has some risk, because is the cloud mining company, you want to invest in, reliable. Again read reviews, what do users say on various forums. Some cloud mining companies offer a one-year contract to mine a coin, where others offer a life-time contract. A life-time contract means the life-time of the miner. So until it breaks down. With a one-year contract, if the miner breaks down they will use another. After about 6 months depending on the value of the coin you can have your invested money back. After about a year you can have doubled your investment. That is if you sell. You can also re-invest in the same coin, as soon as you mined an amount, to get a higher revenue in the end. There are a few coins that can be mined through cloud mining, depending on what the company offers, such as bitcoin, ethereum, zcash, monero. There might be more, but I do not remember them are this moment.

A note if you buy one or more crypto coins, regardless of the value, as long as you have not sold the coins, you have not lost your investment. But before buying look what the price did over a long time-frame and buy at a low.

I hope I have given some useful information. A last advice be careful especially when you just started with trading. Do your homework. There is a lot of information out there, read and learn and only invest money you are willing to lose.

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