Cryptocurrency: Why Is Everyone Talking About It And How Can It Make You Rich?
Cryptocurrency is the latest buzz word in the investment world. Here’s a quick look into what you need to know about investing in cryptocurrency.
When I acquired my first bitcoin, I hadn’t a clue what cryptocurrency was or what I should even do with it. I got into cryptocurrency by chance. I was writing articles for a bitcoin company and they wanted to know if they could pay me in Bitcoin (just one of the 900 over cryptocurrencies in the market).
At first, I was like, “is this some kind of scam?” But I decided (without doing much research) to say, “why the heck not?” and got my first payment in bitcoin (BTC). At the time, a quarter of BTC (what I was owed) was worth about RM250 (about S$80). Three years later, it is worth RM7,700 (approx. S$2479 at the time of writing).
Seeing as how the Ringgit has depreciated to embarassingly low levels and doesn’t look like it’s going to recover to previous levels anytime soon, to say that I am relieved I chose to be paid in BTC over MYR is an understatement.
So, what’s cryptocurrency and current cryptocurrency trends?
Simply put, cryptocurrency is digital currency. And like everything in the digital world, you can’t physically touch it. But you can see it. Kind of.
What you will see is the balance of cryptocurrency in your digital wallet (more about this here) or if you manage to access the blockchain (a publicly available online ledger with every single transaction EVER of the cryptocurrency recorded), you will see a bunch of numbers.
How does one go about investing in cryptocurrency?
The first thing you should look at is buying a coin. Since bitcoin is one of the most common cryptocurrencies out there (and with the longest track record), start with that.
You can either go to a local bitcoin ATM or sign up with a local bitcoin exchange like Luno.
Signing up with Luno is easy. Just put in your bank details (and don’t worry, it isn’t a scam and is regulated by the Singapore authorities).
An exchange like Luno not only allows you to buy and sell bitcoin, but also to securely store your bitcoin in its wallet.
When you buy a bitcoin, you can see a key (which is like a code of numbers and alphabets) in your wallet. The wallet works a bit like your online bank account would—you need a password to enter, you can see how much bitcoin you have in there and you can transfer and receive bitcoin through it.
Should you start investing in cryptocurrency now?
The first thing I have to say about investing in cryptocurrency is that it isn’t for the faint-hearted. In March 2017, BTC was worth US$1,079.75 and then peaked in August 2017 at US$4,764.87 before dipping slightly to US$4,349.29 just a month later in September.
In the same period, Ethereum (another cryptocurrency) was valued at US$50.45 in March, peaked at US$368.70 in June before falling to US$254.36 in September.
You should be well prepared to weather through extreme volatility if you’re going to invest in cryptocurrency. An uptrend may not stay positive for long. Don’t expect it to behave like more traditional investments. Its cycle is still highly unpredictable, so be sure to manage your expectations accordingly.
Did you enjoy this article about investing in cryptocurrency? Share your thoughts with us in the comment box below.