Last week I finally made the plunge and invested in cryptocurrencies. I’ve be aware of cryptocurrencies since the launch of Bitcoin in 2009. I had developer friends who mined and traded Bitcoin – but it seemed to be for fun more than anything. In the past couple of months I began looking at the different cryptocurrencies in more detail. In particularly I wanted to answer for myself: Do I think this is the future of currency?
- I think that the current financial system is inefficient and bloated.
- I think the blockchain, or the underlying distributed encryption network that takes the place of financial institutions in crypto-transactions, is a game changer with many applications beyond currency trading.
- I think that the concept of a decentralized financial system lends itself to doing global business more freely and openly.
- It’s still early. Again, I’m banking on the mainstream adoption of cryptocurrency. While it isn’t the very beginning, we still have not reached a point where Amazon, as an example, accepts Bitcoin as payment (though overstock.com does!) Earlier this summer, Infosec madman John McAfee claimed that one Bitcoin will be worth USD$500,000 in three years. Jim Cramer, of CNBC has been quoted as saying that one Bitcoin could reach $1,000,000.
- Instability in the political systems
- As a marketer of technology, I feel it is my duty to dig into and understand new technologies before they reach the early majority. So this is also an experiment for me.
Bitcoub's low of $1,800+ yesterday simply could not be maintained. In the long term Bitcoin moves above $500,000 within three years. Bets?
— John McAfee (@officialmcafee) July 17, 2017
My Cryptocurrency Investment Strategy
Since I’m banking on the long term, mainstream adoption of cryptocurrencies, I am not interested in get rich quick schemes or strategies. As such, I am slowly building up my investments in a few of the commonly traded cryptocurrencies like Bitcoin, Ethereum and Litecoin. My hope is to build up these investments over time, take any gains and start looking at some riskier short-term opportunities in alternative cryptocurrencies or Altcoins.
My Investment Tools
Greenaddress is a web Bitcoin wallet with desktop and mobile applications. With Bitcoin being my “base currency” that I will use to trade for others, I need a safe place to store them. Greenaddress provides multi-signature transactions, and recovery which provides additional security. Additionally, the Greenaddress wallet is accessed via an extremely long and secure mnemonic phrase.
Coinbase also provides a digital currency wallet, but I use it for it exchange services to buy my Bitcoin. This exchanges trades exclusively in Bitcoin, Ethereum and Litecoin. I was attracted to Coinbase because of its simplicity. Coinbase provides a simple user interface that is easy to navigate for noobs.
It is important to note that Coinbase has had some controversy. One example is their decision to not support the Bitcoin fork, Bitcoin Cash which should have provided each Bitcoin holder with an equivalent amount of Bitcoin cash. By not supporting Bitcoin cash, Coinbase theoretically has taken ownership of it’s customer’s Bitcoin cash.
Bittrex is also a exchange that trades 190+ cryptocurrencies. I plan on using Bittrex to trade in some the aforementioned Altcoins.
Cointrackr is a super simple, yet effective quick glance of your cryptocurrency holdings. I have Cointrackr saved on my bookmark bar on Chrome, and I just reload the page every once in a while to see how my portfolio is performing.
The Bad Crypto Podcast
The Bad Crypto Podcast has been a great source of basic cryptocurrency knowledge for me. The podcast started earlier this past summer and it started by explaining the most basic concepts of cryptocurrency, the blockchain and how the whole ecosystem works. I’d suggest listening to the first ten episodes before making your first crypto-trade.
Reddit can be a great source for live updates on crypto markets. While there is a lot of good information there is an equal amount of crap, so you’ll need to check multiple, reliable sources before acting on anything you read on Reddit. Here are some other good subreddits to follow:
- Bitcoin Subreddit
- BitMarket Subreddit
- Bitcoin Mining Subreddit
- DashCoin Subreddit
- Litecoin Subreddit
- Namecoin Subreddit
- Altcoin Subreddit
- Ethereum Subreddit
Let’s Stay in Touch
This is just the beginning of my crypto-journey and I fully intend on documenting my learnings. Subscribe to my mailing list for news and updates as I navigate the world of cryptocurrency.