So, I’ve been hearing a lot about Cryptocurrency lately. How about you?
I heard that it is the future of money. It is going to revolutionise the financial system as we know it. ‘Bitcoin‘ and ‘Monero‘ are apparently the new gold, and of course the most common rumour: we better all invest before we miss the boat!
Now, I’m not usually someone who gives in to popular trends too easily. You’re talking to the girl who started watching ‘Friends’ in 2018… a whopping 14 years after the series ended.
It’s not that I’m anti-trend hopping per se either. It’s just that for me to buy into something new I really need to see a purpose for it. So, that means I really do need to understand how it works or, at the very least, what it does.
I can’t say I knew either of those two things about Cryptocurrency. That is, until about a week ago, when I decided to start looking into this mysterious thing named Crypto for short.
Learning about Cryptocurrency – What does it do?
However, I’ve been somewhat resistant to listening to him. Mainly because up until recently I didn’t actually know what cryptocurrency was good for.
I mean… was it money? A program? Technology? Something I could use? Something I could store? How would investing benefit me? What was wrong with the good old paper money I have now?
This whole concept around money that isn’t money really can be quite confusing. Especially when you don’t have someone spelling it out for you.
That being said, if you know where to look, I’ve found there are actually quite a few resources starting to spread information on cryptocurrency to the public.
The one that I started with was Chris Stead’s ‘What is Cryptocurrency: Your Complete Guide to Bitcoin, Blockchain and Beyond‘. At £1.99, it wasn’t a huge gamble to buy, and after having read about 1/3 of it, I’m convinced it was a very fair price.
The main thing I learnt from reading that book, alongside opening a Coinbase account, is this:
Cryptocurrency aims to solve problems.
Predominantly financial problems, but they don’t have to be. Apparently, Cryptocurrency could solve problems for almost any institution in the world, with the right development.
I found out that the technology that lies behind Cryptocurrency (something called a blockchain) allows developers to create intricate systems that have the potential to completely change the way we run business today.
Take a look at this introductory video (1:25 mins) for Stellar Lumens as an example:
Now, I don’t know about you but when I first saw that video I was pretty impressed.
I mean, wouldn’t that be great? Lower fees and faster processing of money transfers to loved ones? Global application? No need to see if there happens to be an overpriced Western Union nearby?
I had no idea that Cryptocurrency had the potential to fix issues like these. I was definitely intrigued after that though.
Creating a Cryptocurrency portfolio
One of the key golden rules I have read up on again and again is: Never invest anything in Cryptocurrency that you are not willing to lose.
As I am not currently working for an employer, I can’t really say that I’m particularly liquid. However, I am pretty good at organising the money I do have and as such I decided to take the plunge.
I decided to invest 200€.
Deciding not to put all my eggs in one basket, I also decided to diversify my Cryptocurrency portfolio a little. As I was googling to learn about the different currencies available, I came across the article: 5 Best Cryptocurrencies to Buy for 2019. The best part – they even had a section describing why these were best for beginners!
Watching my portfolio dance
The first day I had my portfolio I must admit I was a little bit worried. I have never really invested in anything (except myself) before in my entire life. Moving into something as volatile as Cryptocurrency, therefore, seemed quite risky to me.
It didn’t help that my investments were going down, down, down all day either. All three of them! Looks like I didn’t buy at a particularly opportune moment. Had I just made my first rookie mistake?!?
Instead of immediately pulling out though, I decided I would just hold on to my Cryptocurrency for the time being and see what would happen. The worst that could happen is the value would go down, but it wasn’t like I could lose any more than the 200€ I invested by doing nothing.
I was playing with the idea of day trading some of the money, as I read up on various techniques that could potentially make money going up as well as down. However, I figured I wanted to see what was happening on a day to day basis first. I also had to learn how to physically trade too. Going in completely blind has never been my style!
Interestingly, as I watched the portfolio across a number of days, I started seeing some patterns throughout the day. I would see a dip in value after midnight my time, but almost always saw an upswing between 2-4pm. At first, I wasn’t quite sure where this came from, but by this point I am almost certain it coincides with US trading times.
I also read up on a little bit of Crypto news, which showed that the largest upswing my portfolio experienced (up from 204€ to 234€ in a two/three day time span), was likely linked to Facebook and Binance ventures influencing investor moves. This was super interesting to learn, as it got me exploring different Crypto news sites thereafter. Nobody said this was going to be straight forward, but it sure is interesting!
Playing with the portfolio
For now my little portfolio is still waiting for me to make a move. I haven’t quite decided what I want to do with it yet, but I have a few ideas.
For one, I think I would like to invest in a few lesser known currencies which I like the look of. I realise that they may not become profitable, but I kind of feel like I would like to support the ideas and technology behind them. Even if it’s only for a short span of time.
The other thing I would like to learn how to do is actually trade the currencies. This can be done using ‘normal’ money like the USD or EUR currencies, or between Cryptocurrencies. (It could also potentially help buy and sell me in and out of the lesser known currencies at a profit, which could help me explore the diversity of technology available even more!)
I have decided I may use around 50€ of my current portfolio for that, or invest another 50-100€ into the portfolio and let my current spread sit as it is.
Either way I must say I am very happy I have taken the dive into this world now. It has forced me to do some investigation and learn more about it. Something I have wanted to do for a while. Moreover, the more I learn about it, the more I think that there is a good chance this technology could really become something great one day.
It’s different for sure and definitely still developing, but I like the basic concept. It is open source, benefits from decentralisation and has such a low barrier to entry almost anyone can join and benefit from it.
It also doesn’t hurt that the market seems to be on an upward swing right now. Who knows… maybe Cryptocurrency could be the millennial version of investing in a house?
I have yet to see my bank, pension or savings account offer me a 17% return in a week. Let’s see what happens from here on out though – hopefully only great things!
Question: What’s your experience with Cryptocurrencies so far?
I’d love to hear from you below! 🙂