Top 10 Cryptocurrency Questions and Answers!

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Top 10 Cryptocurrency Questions and Answers!

1. What are cryptocurrencies like Bitcoin, Ripple, Ethereum, and Dash?

Digital currencies such as Bitcoin and Ripple are like electronic money issued and managed by users. Servers setup by entrepreneurs and companies handle all the transactions while exchanges like Coinbase and CoinHako allow changing fiat currency like USD and SGD to cryptocurrencies like Bitcoin which provides the real value. Bitcoin is currently accepted as payment for goods and services on thousands if not millions of websites worldwide with continuing adoption every day. Cryptocurrencies are also a popular choice for the black market because of relative anonymity and ease of use compared to using credit cards and bank accounts. Digital currencies are also very popular in countries like China where moving wealth out of the national economy and into the global market is difficult. There is also news that the Singaporean Dollar Tokenized Through Ethereum’s Blockchain by the Monetary Authority of Singapore

 

2. Cryptocurrency value and where can I see it?

https://coinmarketcap.com/ has a list of cryptocurrencies ranked by the value of 1 unit of that currency times the cost on an exchange to buy it which equals the market capitalization. For example, 1 Ripple today is worth US$0.165 on Poloniex and Bittrex as I write this. With 38,291,387,790 Ripple available, that means in theory to buy every Ripple at the market price today would cost US$0.165 times 38,291,387,790 which equals a total market capitalization of $6,328,532,534. As you can see these numbers are all really fiction because the price moves all the time as does the quantity available meaning no one is going to actually be able to buy all the Ripple in the world with $638 million. Still, the market capitalization gives a rough estimate of the total value today of a digital currency.

 

3. Why get involved with digital currencies?

With the ability to transfer money in just few seconds to anyone in the world with a Bitcoin wallet without any fees, digital currencies likeBitcoin make sending and receiving money 10 times easier than using wire transfers, PayPal, or Western Union. Digital currencies are just like cash meaning for merchants receiving payments this way guarantees you actually get the money whereas with processing credit cards using Stripe or PayPal there is no guarantee the customer actually paid because of the ability to easily to a chargeback with almost no chance for the merchant to win. I believe that money in the future will be primarily transacted from user to user with digital currencies meaning that buying even a little bit today may be the biggest investment opportunity going forward and an ideal retirement plan!

 

4. Worst part about using cryptocurrencies?

You have to exercise 101% diligence when dealing with Crytos. There will be no ‘DBS bank’ staff to help your recover your passwords or money. Common mistakes include:
Losing your password or make a mistake in the transaction and you lose it just the same as if you lost your wallet or mailed cash to the wrong address.
Cryptocurrencies can be extremely unforgiving when it comes to making mistakes because many wallets are only locked with a password with no hope of getting back in if the password is lost. To make matters worse, they are relatively easy to steal compared to say robbing a bank. For example if your wallet is unlocked on your computer or your account is open, anyone that has physical access to your computer and knows how to make the transaction could easily clean your whole wallet out with a few clicks the same as they could taking the cash out of your wallet. Law enforcement at less than the NSA level is not likely to be able to help out either unless the thief is sloppy beyond belief because it is easy to move any cryptocurrency through some kind of anonymous transaction that makes tracking it nearly impossible to those without access to the real time global electronic monitoring system which no one is going to allow use of to track down some stolen cryptocurrency! So, the onus is on you!

 

5. Which cryptocurrency is best to buy today?

The best cryptocurrency to buy is one we are willing to hold onto even if it goes down. For example, I believe in Ripple enough that I am willing to hold it even if it goes down 99% and would start buying more of it if the price dropped. I have no intention of selling and am continuing to invest for the long term because of various factors like it is relatively cheap and yet with high market cap! One of the most expensive mistakes I made starting out with buying Bitcoin, Ethereum, and other altcoins was to buy with the belief that it should go up and therefore make me money. When it actually went down, I got into fear and anger because the real reason I had purchased was just to make money which obviously was not working out in the short term as the price dropped. Naturally I could only take this pressure so long and sold down low to “cut my losses”. Buying into any cryptocurrency with the expectation it should make money quickly is a guaranteed way to be miserable because even if it goes up, then the pressure is on as to when to sell? I am currently only buying Bitcoin, Ripple, Ethereum. With fiat currencies, the government issuing the money and the people using it determine the value. Would it be a good idea to buy into whatever country’s currency was hot today or recently up or had the best features? Obviously that would be a huge risk. The same with digital currencies. Just buying in on hype or to make money will produce little joy even if the price goes up. Buying in with the intention to become a long term user of that currency and to participate in its development and growth is the best opportunity. Therefore, I suggest and am practicing only investing in digital currencies where I am willing to go through the good times and bad regardless of the price.

 

6. When to sell a cryptocurrency?

That depends on your convictions, really. If you think all these is a bubble, get out before the bubble burst. If you have a mid-term or long -term goal, sell when it it hits your target price. So, general investment and trading practices can help you benefit from cryptocurrency. In the end, it is all about your phycology – greed and fear. On the other hand, the day may come when cryptocurrency becomes mainstream; with the possibility of replacing fiat currency. On that day, you may NEED cryptocurrency to buy and sell certain goods and services. So, you may need to use it regularly.

 

7. Where are the best websites to use for changing fiat like USD and EUR to digital currencies like Bitcoin, Ethereum, Ripple, and Dash?

I use Coinbase.com with Poloniex.com as my next best option for buying and selling Bitcoin, Ethereum, and Ripple to USD because I can make direct transfers from my bank account and quickly move Bitcoin into an exchange where I can then buy anything else.

 

8. What exchange is working the best today to buy altcoins?

Coinbase and CoinHako is where I am buying and selling most of my Bitcoins and Ethereum because the transactions are fast. To buy other coins like Ripple or Dash, I transfer my Bitcoin from Coinbase and CoinHako to Poloniex.com.

 

9. When to invest?

The ideal strategy to me seems to be to invest consistently over time because this minimizes the impact of volatile prices. For example, if you decide you want to invest in Ripple but are not sure if the price will be up or down later, buying in every month instead of all at once is often an ideal way to go forward because if the price goes down, you get a better deal next time. If the price goes up, you got a good deal buying in initially. If you feel the price is absolutely a great deal today, then buying in all at once can be a good strategy when combined with an ongoing investment plan to continue buying more in the future. I bought into Ripple in small chunks and then bought more as the price dropped right after I bought it. Today the price is up more, I can take some profit if I want. Then in price re-tracements, I buy more and repeat the cycle. But, on the whole, I just buy and hold for longer term for Ripple. In summary, investing over time is ideal because it helps account for the up and down prices more effectively.

 

10. How about day trading crypto?

While profits are possible trading cryptocurrencies, so are losses. If you are a master in FX, or Foreign Exchange trading, then cryptocurrency trading is the similar but more volatile and crazy. Trading with FX or Cryptocurrency with proper experience or training is like driving a car without a valid license. You may win once in a while but ultimately, you will crash.  The systems are setup at the highest level to capitalize on the ups and downs with almost no risk and are great for consistently taking money from ordinary traders like me when I thought I was smarter than everyone else while allowing just enough good things to happen so the game continues to be played. Avoid trading on all levels or risk the consequences of losing a lot of time and money overall even if initially or occasionally big success comes. Unless, of course, you are a master trader 🙂

 

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Happy Cryto-ing