First of all this story is my personal opinion and not a financial advice! Never invest in cryptos more than you can afford to lose and always try to keep them in your own wallet instead of a trading exchange.
Two quotes to start with this story:
Asking these people about Bitcoin is like asking a taxi driver what he thinks about Uber or a horse and buggy manufacturer what he thinks about cars. Their opinions are worth less than nothing. — What Will Bitcoin Look Like in Twenty Years? by Daniel Jeffries
Explaining Bitcoin to a bank feels like explaining what Amazon.com is to Barnes and Nobles — From the documentation The Rise and Rise of Bitcoin
In this post I won’t explain what Bitcoin or Cryptocurrencies are in general. There are enough resources all over the internet which explain it already in a really good way. For example the Youtube channel Cold Fusion:
or watch the Ted Talk from Don Tapscott to understand how the underlying technology, the blockchain is changing money and business:
or if you want to read then I can recommend The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic by Paul Vigna and Michael J. Casey:
Finally to start answering the question from the story Why I invest in Bitcoin and other Cryptocurrencies.
The last few years I thought about investing in companies like Google, Facebook, Apple, Amazon or Tesla for example because I just like how they innovate and make progress.
But then in July this year colleagues were talking more and more about Bitcoins and other Cryptocurrencies and cause I’m a tech guy I said to myself I need to invest at least a weekend to research about this stuff and try to understand what it is and what you can do with it. I was hooked and I decided to go all in into cryptocurrencies instead of buying stocks. I was digging deeper and deeper the rabbit hole and since then I follow some specific news sites, youtube channels and slack channels of different cryptocurrencies and I believe that this whole topic will change the future how we pay and do other stuff, but for now until this will happen we are still in the phase which kind of currency and technology will be the Google, Facebook, Apple, Amazon or Tesla in the future of Cryptocurrencies. So currently it’s the time to support your favorite coins, ideas and invest in them.
There are two things which pop up in my mind when I’m thinking about why I want to be part of this:
And today 22 years later we have companies and their products like Amazon, Facebook, Google and Apple which just rule the World Wide Web and App World.
There where many naysayers regarding to the internet what you can do with it, but today we use it every day for work, for private stuff and so on.
In my opinion smartphones had their mainstream moments when Apple introduced the iPhone. And that was in 2007. But the iPhone was not the first phone which you could use via a touch screen (btw Apple was working first on the iPad before there were working on the iPhone). It was Palm Inc. with their Pilot 1000 and Pilot 5000 (also known as PDA) back in 1996.
There where also many naysayers and people laughing regarding to the iPhone. The best example is Steve Ballmer:
Think about it with which device we interact most of the day. It’s a smartphone.
I have to admit that I remember a situation in 2008 when someone came to me and showed me his iPhone jailbroken and showed me all the Apps and how simple it was to use it with the touchscreen. I just thought “How stupid is this”. Today I think about it twice if someone comes to me and tells me about a new thing and I do my own research instead of directly making an opinion about it without knowing what it really is.
Today Bitcoin and the Blockchain exists only 8 years. And if you look at the number from August 2017 how many internet users have a crypto wallet, we are currently in the same timeframe which the internet was in 1995. So it’s not late to join the ride 😃.
What’s missing right know is the netscape web browser or the iPhone which will bring this technology to mainstream.
I invest in ideas which I think have great potentials for the future. To invest in these ideas the companies behind it make an Initial Coin Offering also called ICO. For example at an Initial Public Offering you can buy stocks from a company and it’s highly regulated. At ICO’s companies present their idea in a white paper, people can buy tokens from the company and they are not highly regulated. The value of these tokens can increase if the idea gets executed well and more and more people buy these tokens.
You can read more about it here.
The important thing is what I’ve learned so far that you have to do your research about a coin or ICO and only invest if you’re behind the idea and opportunities which they provide. So even if others tell you, you should invest in the next big thing X, you should just do your own research and then only invest if you are really behind the idea.
Another reason what I like about cryptocurrencies is that unlike other forms of currency that are government regulated, cryptocurrencies use decentralized technology. That allows you to secure payments and store money without using your name or going through a bank. You are not dependent from a bank anymore. You are just responsible for the coins you hold. In my opinion thats a good thing but if you lose your keys/passwords to access your wallet, you can lose all your coins. So it’s still risky.
Some coins/tokens which I support:
It’s just the first decentralized digital currency and proves that the system can work without a central repository or single administrator. Now since 2009. There are better currencies out there, but I share the opinion like many others that bitcoin is a store of value just like gold.
What Bitcoin does for money, Ethereum does for everything else. Ethereum is a blockchain that allows smart contracts and building decentralized applications upon it’s blockchain. Bitcoin on the other hand is a peer to peer technology and to be used as a form of digital currency. There is a nice analogy of Ethereum as a tcp/ip in comparison to Bitcoin as your email.
In short NEO is the chinese version of Ethereum. It’s like if you compare Amazon and Alibaba. A nice comparison you can find here.
With Verge you can decide if you want to have private or public transactions. You can read more about it here
What most users like is that IOTA has zero transactional fees. There are no mining benefits. Like the name already indicates this currency is designed for the Internet of Things. You can read more about it here and here
EOS is promising to be a new blockchain operating system faster and more scalable than Ethereum that will allow users to build decentralized applications more efficiently. On of the differences to mention are transactions per seconds which can be handled by EOS. EOS will support millions of transactions per seconds while Ethereum under load from real applications is likely to support 10 transactions per seconds. You can read more about it here
The first token which is based on the NEO blockchain. Red Pulse is a market intelligence platform covering China’s economy and capital markets. By creating a global community around a common interest, incentivizing participants to produce truly relevant research and providing technology-enabled analysis tools, they seek to solve the problem that all of us face today: Information Overload.
Simple Token lets you launch your own branded tokens and turn your business into a dynamic ecosystem. For example Facebook could use Simple Token to launch their own branded tokens and let users earn them for creating content or let users buy content with these tokens.
In the end nobody knows how cryptocurrencies will evolve in the next years. One Bitcoin could be worth more than a $1 Million or it can be worth nothing (I believe in the former). But in my opinion I honestly don’t think that Cryptocurrencies will disappear. If Bitcoin or Ethereum won’t succeed then there will be something else that will succeed. But until then I will enjoy the ride and support cryptocurrencies as much as I can.
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