Crypto & Risks
Here we are again, me writing about the crypto market and hopefully someone reading about it. Today I wanted to write about some risk factors that may come with trading in the crypto market. How are bitcoins/altcoins going to be viable, who are behind them, and how do they gain value.
How is Crypto Viable?
Getting into the crypto game right now is volatile. Just like any other market that deals in trade. Each coin has a story and a reason it is on the market. Bitcoin is well known as the first blockchain that was created back in 2008 and it was created so that the government could not decrease its value by creating more. That is the beauty of cryptocurrency. It has a finite number of coins in the market.
Having only a finite amount makes it impossible for inflation by creating more of the same thing, as an example I am going to throw out USD. We are currently in a state of major inflation due to our government. Items that were once easily obtainable are no longer accessible because of inflation.
Cryptocurrencies will have a major impact on everyone being able to access everyday items. That is how bitcoin/altcoins have viability. As the USD inflates and causes serious issues with people being able to obtain everyday items, crypto provides a way for people to purchase and trade for items.
As another example of cryptocurrencies’ viability, companies that are well known are accepting them for payments. Overstock.com partnered with Coinbase so that they could accept crypto as currency to purchase items on their website. As more altcoins hit the market, I personally believe that more businesses will accept crypto for payments.
The best part about all of it is there are no international exchanges. People do not have to pay exchange fees when purchasing items with crypto. The best part about Bitcoin and Altcoins is the fact that they are decentralized.
What does that mean in retrospect to the world? It is controlled by the people and businesses that trade and accepts crypto as currency. It cannot be controlled by any Government. This means we as the people control what happens with this currency. Not the Government
Who is Behind Crypto?
As I dive deeper into the crypto world, I learn more about what is available. Coinbase has a great program when a new coin hits the market and is available to trade on their platform. It is a Learn and Earn program where you learn about different coins.
I recently just learned about a new coin called Render and it is specifically a coin for blockchain-based GPU processing. If you want to learn more about this new coin specifically, I suggest opening an account or logging into your current one. You can click on any of the links in this blog, and they will direct you to Coinbase.
There are many different companies/people behind numerous altcoins. As I stated in a previous blog, the crypto market is a lot like the trading market. Once a coin is ready for the market the company/person that is providing the blockchain will take it public for trade and mining.
The most popular altcoin currently is Shiba Inu, and it came into fruition on the crypto market as a joke to outrank Dogecoin. They are both known as meme coins, the difference is Doge has its own blockchain and Shiba is built on the Ethereum blockchain. Shiba is one of the rarities of the meme tokens because it was created by an anonymous creator that goes by Ryoshi.
Even though this blockchain coin was built anonymously, it is one of the most browsed coins on the market and recently has seen a 35% increase in its worth. It has seen this increase because of its use of smart contracts. This allows users to lend, stake, and earn passive incomes.
Getting back to the basics, who is behind all these coins? Creators, investors, and regular people who are trying to give back. People who are trying to make the world a better place by providing better resources, and paving the way for decentralized currency.
How Does Crypto Gain Value?
Moving forward with the last paragraph; crypto gains value with the increased community involvement. People and creators around the world provide access to decentralized money, meaning no transaction fees (banks) and no international exchanges. Is there a negative to this, well, yes. Crypto has been frowned upon because of its lack of regulations and its use being connected to illegal and criminal activities.
Although people have used it for negative gain, I use it to help provide for my family as a stay-at-home mom. But, how does it gain any value? As with the trade market, it is all supply and demand. Crypto runs off a supply and demand, it needs a balance of both to have any consideration of value for potential growth.
Who creates this supply and demand? We do, the people who are investing, mining, and trading are the people keeping the value high. The more it is written, talked about, and traded means more people are being brought into the trade. This will continue to help it grow in value.
How can this help you? Well, just like the stock market, do research into the value of the different coins available. Buy low and sell high, looking into patterns, financial charts, or you can do what I did and build a mining rig.
I hope that your curiosity propels you to move forward on your crypto journey and learn more about the market. I also hope that this blog helped you to look deeper and do more research. I know I only covered the basics of its viability, who creates it, and how it gains value.