Cryptocurrency is a vast and confusing monetary system, and here’s what I learned.
Full disclosure, I am not a finance person. I have never really followed the stock market, never invested, and never truly got cryptocurrency. With this said, I want to explain what cryptocurrency I would invest in from a completely outside perspective.
The first thing is that I want to explain what cryptocurrency is and which ones are out there. My understanding of cryptocurrency is that it is a non-governmental digital currency that’s entirely made in blockchain technology. So there is no authority behind it; it’s worth is solely on the users of the currency and how much people invest in it. It exists solely online with technology that records information to make the entire system almost impossible to hack. The hype comes from the ability of the public to decide what the worth is. It can be used to buy things, but it is used primarily as a way to invest as if you were investing in Google or Netflix.
Here are some cryptocurrencies that are out there that are being labeled as some of the most interesting right now. None of these are my top three, but they all are parties of interest. First, there is Solana (SOL), which focuses on proof of stake and proof of history. It is seen by the company Bloomberg as a “potential long-term rival to Ethereum”. Right now, it’s had some reasonably good growth, but it hasn’t hit the zeitgeist yet.
Cardano (ADA) sees itself as faster than bitcoin and more secure than Ethereum, which has yet to be one-hundred percent proven, and right now, they are having an overall good year, but the past three months have been pretty low on value.
Binance Coin (BNB) is one of the largest in terms of day trading but has had many investigations and breaches in security. It has had some significant growth this year, and the last three months have been a bit of a roller coaster, but it is at a high right now.
There is Tether (USDT) which has the principle of always trying to stay on the exact value of the US dollar. It has even passed bitcoin once in 2019 on the volume of trades daily and monthly. The problem is that because it stays on the value of a dollar, it can’t exceed it.
Polkadot (DOT) has an environmentally friendly spin on the crypto world and an interconnected internet of blockchains. As a result, its market value this year has been on a good trend up.
Finally, Dogecoin (DOGE) is known as a meme created by Tesla founder Elon Musk and is incredibly volatile. The market is all over the place with Dogecoin, and it’s definitely for the risky-minded investor. This year has had tremendous highs and lows; right now, it is at a low.
So after some research and talking to my friend who is in the finance world. My top three choices in order from least to greatest are Shiba Inu, Bitcoin, Ethereum.
Shiba Inu (SHIB) is similar to Dogecoin for it has its roots in meme culture, and if I were to be a little riskier with my money, this is the risk I would take. The reason why is that it doesn’t have one person that can make or break it and that compared to Dogecoin, it is a much more upwards incline in value. My second is the infamous Bitcoin, for it is one of the most stable currencies in the game. It also has the best-staying power as of yet. The only reason it isn’t my number one is that it is super expensive to buy in.
So now I am at my number 1 choice, Ethereum (ETH). While it is second to Bitcoin in market capitalization, it is cheaper to buy in and still has immense staying power. Ethereum is also working in NFT’s which is making it even more profitable.
So, at this point, I have learned quite a bit more about cryptocurrency and can say that this has been a rollercoaster of an experience. There is a ton of research and essential information to understand if you want to have a completely informed opinion and the ability to make decisions on the matter. To make it all the more confusing, everything changes in a matter of moments. You have to be constantly watching the charts and markets to keep up. It is a rabbit hole where you can make suitable investments if you know what you are doing. What makes this part of the investing world even more interesting and consuming is that because of its digital roots, the amount of information just keeps going, and the ability to make a cryptocurrency is relatively easy that it is super important to know what brand is a more serious mainstay and what is a pump and dump meme.
Whatever you do, I want it to be known that I have no finance training, but I think regardless of who you are, you should only invest in things where you would be willing to lose that amount of money for good. Investing in more than what would be financially sound for you is never a good idea, yes good luck can come your way, but it may not; lots of things in life are volatile, don’t let the income that supports you be the same way.