October 28, 2020
The bitcoin, everybody knew the existence of this cryptocurrency but never thought it would rise to the occasion that it has been doing for the past year. The bitcoin was worth pretty much nothing and has grown out to be worth more than 17.000 dollars and still counting. Not only the whiz kids and tech geeks are investing in the Bitcoin and other cryptocurrencies, but also your run of the mill consumer is taking a shot. Is this a good or a bad thing? We spoke to one of our own crypto geeks at 42workspace to pick his brain!
What do you think about bitcoin?
Bitcoin and other cryptocurrencies have the ability to revolutionize many different processes around the world. The blockchain allows it for limitless technological applications this in comparison to the majority of other cryptos. The Bitcoin is relatively limited in functionality but is currently creating a massive market awareness. If you take ethereum for example, you can essentially create smart contracts that can be implemented in real life scenarios (e.g. decentralized shipping of goods or lending of funds). Bitcoin, however, only really provides the ability to conduct transactions and store wealth. The issues with the scalability of Bitcoin now mean that transaction fees are very high and transaction speed is often slow. Bitcoin was the first cryptocurrency in the world, so it bears the banner and paves the way for all other cryptos.
Do you have any preferences when it comes to cryptocurrency?
When trading cryptos, it is important to realize that the value of Bitcoin directly influences the value of all other coins and tokens. Because of that, it is smart to always hold a certain percentage of a portfolio in Bitcoin. Aside from that, finding promising coins and tokens just requires good research and often also allot of patience.
Do you think anyone could invest in cryptocurrencies?
I think theoretically anyone could invest in cryptocurrencies. Since the market is still young and finding its direction, there are many opportunities to make profitable investments. At the same time, cryptos have been developing under the radar for years, and are only now hitting the mainstream adoption. What this means is that early investors have an incredibly large advantage over anyone starting today. Moreover, the faster bitcoins’s growth, the more likely that increasingly large price corrections will follow in the near future. So, to conclude this answer, anyone can invest in cryptocurrencies, but gaining a good understanding of the market and its behaviors is essential!
Where should they start?
I think the best place to start is just by reading and immersing yourself into the world of cryptocurrencies. When you understand the technologies on a basic level, it becomes easier to take good investment decisions. A good starting point is to look at the current top 10 coins by marketcap.com and pick one or two to start reading about, before making an investment.
What do you think about ICO?
ICO is a very hot topic at the moment and can be great, but are also very unregulated. There have been many scams in the past months. As a result of a lack of regulation in the industry, the investors participating in ICO’s are essentially very unprotected. Having said that, there are also many very solid ICO’s with exciting projects and great profit potential. As mentioned before, the main differentiator is doing research and being aware of what it is that you are buying.
What can you do with all these crypto currencies?
The majority of cryptos are designed to fulfill specific functions in society. For example, bitcoin’s original function was to act as digital cash. As a result of high fees and relatively slow transaction times, it is now increasingly seen as storage of wealth instead.
Would you invest in a Bitcoin or other cryptocurrencies? Let us know!