Money Making Beginners Guide to Cryptocurrency - Ajeet Kumar (best english books to read for beginners .TXT) 📗

on a device that you only connect to the Internet for transacting in cryptocurrencies, there's still a risk of loss if that computer is damaged beyond repair or even if it can still be repaired, the computer technician to whom you'll have it repaired can possibly hack the drive and consequently, your wallet. With a hardware cold storage wallet, the risk of losing your private keys due to hardware damage is much, much lower. Further, using a paper wallet as a backup can help mitigate such a risk. Some of the most popular hardware wallets include Trezor, KeepKey, and Ledger Nano. They may cost a bit, but they're worth the investment.

 

 

Chapter 4: Is Bitcoin dead?

 

 

Because of the rapid rise in value of Bitcoin, especially in December 2017 when its market price quadrupled in just a couple of weeks, and its subsequent price retreat in January 2018, many people were led to believe that Bitcoin's just an asset bubble that has already popped. In other words, they believe that Bitcoin's as good as dead.

 

But while the huge returns Bitcoin and other major cryptocurrencies have generated in a relatively short period of time is reminiscent of the Internet and Holland Tulip bubbles in the past, it's fundamentally different than those two assets. As such, Bitcoin and other noteworthy altcoins have a much brighter future compared to the two aforementioned assets.

 

The following are indicators that Bitcoin isn't dead yet and more importantly, it's going to be around for a long, long while.

 

 

More and More Legal

 

 

Not to say that Bitcoin's an illegal endeavor but what I'm saying is that it's becoming more and more accepted as legal tender. You see, one of the most serious challenges facing Bitcoin with regards to being accepted in the financial services mainstream is acceptance by government monetary authorities (lawmakers and regulators alike), which is hampered by its decentralized and autonomous nature.

Governments hate what they can't control so Bitcoin's not exactly in their good graces - at least not yet. But recent developments in major economies indicate that government acceptance, in general, is becoming more and more likely.

 

Japan announced back in April 2017 that it would officially start treating Bitcoin as a valid or legal alternative payment method and as of 2018, it already is. This has made Bitcoin practically part of the Japanese mainstream financial system as more and more merchants in the Land of the Rising Sun have officially started accepting Bitcoin payments.

 

Other major world economies like Russia and Australia have also released similar statements indicative of Bitcoin being accepted as a form of legal tender in their respective economies soon. As more and more major world economies accept Bitcoin as a legit payment method, the rest of the world is highly likely to follow suit.

 

 

 

 

 

 

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More than just government pronouncements, Bitcoin's acceptance among merchants continues to rise because of the confidence shown by some of the world's biggest companies in accepting payments using the granddaddy of all cryptocurrencies. These companies include Microsoft, Overstock, and Rakuten.

 

But more than just riding on the bandwagon of these big companies, there are fundamentally sound reasons for the rising number of merchant acceptance of Bitcoin. One of them is transaction fees, which are much less than what credit cards charge to its merchants. Other practical advantages Bitcoin as payment has are the ability to reach new customers from regions in the world that are not yet reached by mainstream banking institutions and elimination of chargeback fraud. With the expected rise in mainstream acceptance by merchants, demand for Bitcoin is expected to rise and of course, its price can be reasonably expected to rise over the long term as well.

 

 

Wealth Storage

 

 

 

Remember our discussion in a previous chapter concerning cryptocurrencies' ability to store value and its relationship with functional value? The increasing acceptance of Bitcoin in many of the world's financial markets, particularly in countries that are experiencing economic distress, gives the granddaddy of all cryptocurrencies increasing functional value. In such distressed economies as Bolivia and Venezuela, local currencies' values continue to deteriorate to the point of becoming worthless. In such economies, Bitcoin is becoming more and more accepted as a mode of payment, which means its functional or utilitarian value is increasing. So as their local currencies are becoming less and less valuable, Bitcoin is becoming more and more precious and as a result, is becoming an even better storage of value for citizens of such countries.

 

 

 

Walking Dead...No!

 

 

As you can see, Bitcoin's very much alive and kicking and based on the indicators I've just enumerated, you can expect it to continue staying alive. Bitcoin, being the granddaddy of all cryptocurrencies, has the highest market capitalization and best performance track record, both of which will continue to make Bitcoin more and more accepted in the international financial mainstream. And as that happens, the likelihood of Bitcoin dropping dead will become even more statistically impossible.

 

 

Chapter 5: Cryptocurrency Pre-Holding Strategies

Chapter 5: Cryptocurrency Pre-Holding Strategies

Before discussing how to hodgepodge in more detail, I want to distinguish between two investment methods: long-term approaches and short-term approaches. The short-term approach is defined as more trading, i.e., buying and selling financial assets in the short term, like a few hours, or a few weeks. The long-term approach, also known as buy-end-hold and buy-it-forget-names, is an approach where the time horizons of investments are - you probably guessed it - long. In the long run, I mean at least 1 year.

Holding comes under a long-term, buy-and-hold approach. The short-term approach is part of its advantage of hodling. One of them is time. With a short-term approach, you will most likely have to stay on top of your position so you can time your transaction well. This is especially true for financial assets whose prices are very volatile, such as cryptocurrencies. With a long-term approach, most of the work you will need to do will be before buying your financial assets, i.e. research. After doing your homework, you buy the financial assets that you believe in and forget about them. You only need to update your investment price once a week or once a month. Because your investment outlook is long-term, you will not be affected by price fluctuations in between and therefore, will require only minimal management or oversight.

Another advantage is cost. In the whole world, not even a bucket should be spent for every transaction. But our world is not perfect so you will need to pay a transaction fee for every financial investment transaction. With trading, you'll trade more often, which means more transaction fees.

With a long-term approach, a.k.a. Hodling, the transactions you have to do will be between a few and a lot, which means a low transaction fee.

Now that I have successfully jumped at the chance to significantly increase your chances of hodling.

For better appreciation and understanding, I will divide this issue into two main parts: before and during hodling. We will focus in this chapter before HODLing.

Ask yourself why

Remember what I wrote earlier about how most of your hodling work would be in the beginning, i.e., before you actually move on to your cryptocurrency investments? Good. Let's get to work now! The first thing you need to do is look for your cause.

When you examine the lives of people who have achieved so much in their lives, one common thread that runs through them is awareness of their life purpose. In other words, they know why they are doing it. And most importantly, I assure you that if you examine each of their causes, you will find those causes to be very meaningful or compelling. Therefore, you need to have a compelling reason to hide any financial assets, which in this case is cryptocurrency.

Why is this crucial? Successfully hodling will require self-control and perseverance, especially during price declines, i.e., bear markets. It is during those moments when your emotions can become so overwhelming that they will override all logic and make you do things that you will later regret.

But when the reason for holding someone is very clear, i.e., make money, it is not very attractive. In fact, it is very common and shallow. I'm talking about a deep, Attractive and personal reason. For better help, ask yourself this question, why do you want to make money for this investment? Can you have enough money for your child's college education for 15

years from now? Is it so that you can retire early? Or is it so that you can travel the world until you are 60 years old? The more personal and larger your reasons, the more compelling it can be.

When you are tempted to switch to a risky cryptocurrency that is increasing in value at a steady rate rather than a relatively less risky one but knowing the cryptocurrency you are running you are doing this not to lower your child's risk. Being able to go to college can help self-control and avoid taking excessive risks and gambling your child's future. While you may be tempted to unload your cryptocurrencies as they depreciate in value even though all indicators may point to a brighter future ahead, resisting the temptation to know that you are doing so so that you can retire sooner Can help you actually sell your cryptocurrency at a loss, your market loss is only a theoretical one and can still be recovered.

Minimum Rate of Return

Once you know how much your investments need to make a minimum, it will be easier for you to choose your investment wisely. And sensibly, I mean choosing investments that are neither more secure but more profitable or potentially more profitable but also more risky. When you know how much return you need to complete your hoarding goals, you will put the investment in a better position that will help you meet your goals for the least possible risks.

So how do you know the minimum rate of return? All you need to know is how much The money you need until the end of a certain period, for example, after 5, 10 or 15 years. After that, decide how much money you can keep for the investment. Finally, determine the rate of return based on your expected future value (the amount you need in the future) and current value (your available funds for investing or holding). And when you have determined that, make it a rate that gives you your minimum expected rate and select only those cryptocurrencies whose average annual rate of return is equal to or greater than your minimum requirement.

Risk Appetite

This refers to how much you are willing to lose if your investments go sour. Why is this an important consideration? This is because there is no such thing as a risk free investment and the higher the expected return on investment, the higher the financial risk you should be prepared to take. So it is likely that your investments will not pay you back. And the worst part is that you lose money on your investments, which can be as much as it all. By