Crypto is money but a different kind of money. Unlike your dollar or naira that’s of stable value, Cryptocurrency can grow or decrease in value. However, the value is depended on factors of commerce like demand and supply – which makes it volatile and at the same time potentially more valuable than normal money.
Since both are money, let’s look at which of the money is better for you. Here are a few list of things to consider:
Before we continue, if you missed the introduction go back and go through it first. Here is the table of content to help you navigate through the entire course from any part of this lesson.
So, this lesson and the other lessons will focus on teaching you WHAT TO DO. So much theory will be overlooked and the focus would be on practical. This lesson one is just to give you that familiarity as a first timer.
Among the things you will be learning in lesson 1, you will also get to understand the following:
Let’s start with giving you a clear view on Cryptocurrency as money, different from your normal or fiat currency. Fiat currencies are money issued and controlled by governments. An example is the US dollar and Nigerian naira.
Here’s what you should know about Cryptocurrency in comparison to fiat currency.
Let’s start with control of your money. One of the huge benefits you get with crypto is that you are in control of your money. No government has control over your crypto.
That’s why they don’t like crypto, because they can’t control your money. You don’t have control over your dollar or naira, the government does, and they can change the exchange rates as they want.
Crypto is the future of money. As much as governments don’t like it, crypto will eventually take over the monetary systems of the world. The earlier you start growing your crypto money the better for you.
The reason for the high adoption of cryptocurrency, which of course would continue, regardless of government disagreements, is the fact that crypto value grows. If you have 10 crypto today and it’s worth $10, the value have the ability to increase or even decrease in the future. But that’s not possible with your normal or fiat currency.
Let’s look at value creation. Your normal money doesn’t just increase in value overtime, it can only increase in value when compared with another currency, like the value of naira to dollar.
For cryptocurrency, it’s value doesn’t rise only in comparison with another crypto. The value is control by demand and supply. The value of another crypto doesn’t necessarily affects it that much, excerpt that what may affect Bitcoin price for example can equally affect Ethereum as well.
For example, Bitcoin price some years back was worth $0.1 per 1 Bitcoin. But today, the value has grown to as much as $60,000 for 1 Bitcoin. If you had bought 1 Bitcoin then, it is worth much more now.
If you have money in the bank, you can invest it into savings to earn more money and the percentage can be so small. But with crypto you can earn as much as 100 percent monthly on your crypto savings.
For example, if you staked (saved) $1,000 worth of some cryptos, in 30 days you could end up with $1,000 return. That’s why many are rushing into crypto Investment. Even if you get 10, 20 or even 50 percent per month, it’s huge compared to anything the bank can ever offer you.
Your money in the bank is actually a waste of investment. The right place to save your money is in crypto.
One of the reasons many are being discouraged about Cryptocurrency is the issue of security. Thieves are everywhere, even in the banks. In fact, the worst thieves are those in the banks who have access to your money.
In crypto you are the only one that has access to your money. Before anyone could steal it, it’s either you let them into your wallet ignorantly as many have been doing or you foolishly handed over the keys to your wallet to them.
Apart from Crypto being digital money, it’s also a digital asset. It’s a combination of monetary and value assets. That’s what makes crypto different from normal money.
By holding crypto means you are holding a digital asset which has potential to increase in value overtime. By simple demand and supply principle, any crypto can increase its value overtime.
Let’s use Bitcoin to illustrate this simple fact. The price of one Bitcoin is already in the tens of thousands. But the price started from some fraction of a cent some years ago.
The much longer you hold a crypto the more likely it’s value would increase overtime.
You are going to get Rich if you invest in Cryptocurrency but you have to follow some simple guide. Here is my guide to help you succeed:
There’s really nothing much to explain about coins and tokens. So, I’m not going to waste your time with bogus explanations. Coins and tokens are relatives – almost the same but slightly different.
The value of a Cryptocurrency is not improved because it’s either a coin or a token.
But here’s what makes the difference, and that’s all that should matter. A coin is a Cryptocurrency that has its own Blockchain. While a token is a Cryptocurrency that’s built on another Blockchain that’s not its own. However, a token can migrate or upgrade to become a coin.
A smart contract is what defines the trade in a Blockchain or crypto project. It’s a legal agreement that’s electronically programmed to execute the agreement of a binding contract. These programs are set to run or execute an agreed contract when certain conditions are met.
A crypto smart contract helps you understand how a token project would work, what’s possible in the project and who’s responsible for certain functions of the agreement, and what’s the benefit when certain conditions are reached.
In a simple more clear way, a smart contract is what makes Cryptocurrency project possible and trustworthy.
First, let’s understand Blockchain. The best way to understand Blockchain is to look at what a Blockchain can help you achieve.
However, a Blockchain is simply a digital ledger of transactions. But let’s look at the different types of Blockchain networks, which is more important for an investor. Here’s a few of them:
A wallet and an exchange are not the same. Don’t mix them up. Although both can work together and can be used to store cryptos, but they are not the same.
Let’s look at some of the main difference between them.
A wallet can be a physical device, program or service which holds access to your cryptocurrencies.
Crypto wallets don’t technically store your crypto, but they store the public and private keys that’s required to buy cryptos – while also providing digital signatures to authorize the transactions.
There are different types of crypto wallets, but here are a few that I recommend:
However, for this class I’m going to be using Trustwallet as my preferred wallet. So, go download it on Google Playstore or IOS platform.
A crypto exchange simply facilitates the transaction of cryptocurrencies with other assets like digital and fiat currencies. They act as intermediaries and marketplace for buyers and sellers of Cryptocurrency assets – while they make money through charging commissions and transaction fees.
There are two main types of crypto exchanges:
The centralized ones are under the preview of government and requires to follow some business legislative rules like KYC (know your customer) requirement by law. They are also required to register and be legalized in the countries of operation.
But a decentralized exchange is completely the opposite of a centralized exchange. They are simply gateways to access, buy and sell crypto assets. They may not hold your assets or require KYC process.
There are many crypto exchanges in the world, here are a few of them:
Although, this is all there’s to know about crypto investment. But it’s a starting point. As you make progress in this lessons you will learn more. And the more you get involved into Cryptocurrency market you will learn even more by experience.
Don’t limit yourself and don’t stop learning. Cryptocurrency market is very dynamic. Things equally changes regularly. You have to keep learning to keep updated all the time. As long as you stay in the crypto space you will not lack knowledge.
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