Over the past decade with the introduction and growth of social media and online communication tools the required working skills also became more and more digital. This rapidly changing trend to a more digital services economy has also created a lot of new online opportunities. One of these new opportunities is starting an online business and earning a decent income with it.
Also, the traditional offline world has been facing some new online developments which could be disrupted in the near future. The financial world, for example, has been challenged by the introduction of a new form of digital money called cryptocurrency. Although this new technology is still in its infancy it has been on the news many times already.
Proven fact: investing in this new technology could be very profitable and as an online business owner, this new technology could be a good opportunity to invest in. So what is this new technology called cryptocurrency all about?
Cryptocurrency what is it
A cryptocurrency can be defined as online digital money. This kind of money uses cryptography as form of security. The use of cryptography is very important because this technology offers the security against falsification and double spending.
The most important property of a cryptocurrency lies in its decentralized form. This decentralized property uses a Blockchain network of computers and has no owner. This Blockchain technology can be described as a distributed ledger enforced by a disparate network of computers. The main difference compared to fiat money used by our banks today is in its deflationary form.
Fiat currency has no limit in the circulation of money and central banks all over the world use this inflation mechanism to print more over time. Cryptocurrency however, has a limited supply and you can say its deflationary. Another important difference is the central owner ship or the lack of with no central governance. This is the most important feature of cryptocurrency and is theoretically immune for government intervention or manipulation.
Bitcoin and other cryptocurrencies
Satoshi Nakamoto, the infamous founder of bitcoin, launched this first Blockchain project ever back in 2009. This person is quite mysterious because until today nobody exactly knows the identity of this person. There are a lot of rumors going on in the Bitcoin community and insiders think it could also be a group of people.
As of writing, there are over 17.62 million bitcoins in circulation with a total market value of around $87 billion. This new kind of internet money is a relative young market and this comes with a lot of price fluctuations. Bitcoin has a lot of competitors which are called ‘altcoins’. One of the most succeeded out there are Litecoin, Ethereum, IOTA, EOS or Cardano. Today there are literally thousands of cryptocurrencies in existence, with a total market capitalization of over $170 billion. Currently, Bitcoin has more than 50% of this market value.
How to start as a cryptocurrency investor
Investing in something new it doesn’t matter what kind of asset you choose comes with a certain level of risk. What I aim to do in this article is providing enough simple and clear information to make that risk as low as possible. Hopefully, I will give you the best chance of getting some great returns and will save you from deadly losses in this rapidly moving space. Most online business owners don't have the time to trade, but if you are more interested in trading rather than investing, I’ll recommend this article about being a Bitcoin trader.
First of all I want to start with an explanation of some terms and acronyms which are commonly used in this cryptocurrency space. This could save you some time when doing your own research. Some of the most commonly used ones are;
- Altcoin - this simply means alternative coin. The term applies to any coins which were launched after the success of Bitcoin - usually trying to target any perceived limitations that Bitcoin may have. Since Bitcoin was the first, any coins that came after are known as Altcoins.
- Token - crypto tokens, like tokens in the real world, are generally used to represent something else. In the real world the usually represent or replace real money or cash. In the crypto world they can represent a variety of assets or utilities.
- Crypto Currency Exchange - a crypto currency exchange, or sometimes known as a digital currency exchange (DCE), is a business and/or platform that allows users to trade crypto currency for other assets. Such as conventional money or other crypto coins.
- HODL – A slack used by the crypto community which means to hold you coins rather than selling it to make a quick profit.
Now that I have given an thorough explanation of some common used terms and background information we are ready to enter the next level as a profitable investor. So how can you be profitable in cryptocurrency investing as an online business owner?
Return on investment in 2019
The last year wasn’t very good in the perspective of a cryptocurrency investor. The total market has been in a decline for the entire 2018 and is currently recovering from the lows. Q1 of 2019 has just ended and a lot of analysts are thinking of reinvesting into this market again. In this part of the article, I will give you some examples of a possible return of investments when you did this at the start of 2019.
Bitcoin started the year at 3737 US dollar and is currently priced at 5597 US dollar. That means that the price of Bitcoin has already increased by 49% since the beginning of 2019! Can you imagine if you made a 1000 US dollar investment in Bitcoin at the start of 2019, it would be worth 1500 US dollar nowadays.
This BNB Coin is a new coin introduced by Binance exchange in July in 2017. Currently, it ranks number 7 at Coinmarketcap and is currently one of the hidden gems in the market. BNB coin started 2019 at the price of 6.07 US Dollar and is currently priced at 23.81 US Dollar. This means that the price of BNB has already increased by 392% since the start in January 2019. Just picture: If you invested 1000 US dollar in BNB coin back then, it would be worth 3920 US dollar today!
As you can see the possible ROI can be very high in this market but to find the best opportunities one has to do some research and watch the markets closely. Also, as an investor, it is important to hold onto your investments rather than selling it for a quick profit.
Investing in cryptocurrency comes with high risk, but also with the right setup and investment strategy, the rewards could be amazing. With this being said I hope I have given you enough information to start as an investor into cryptocurrency. Currently, at the start of Q2 in 2019, there is enough opportunity in the markets to start buying some Bitcoin or any other crypto. If you are an European native there is a nice opportunity now to start buying with EURO or GBP. For more information go to Binance Jersey.
Keep in mind that investment always brings some risk and do some thorough research before you start to make any big investment in this highly volatile market.