Is it too late to get into Crypto?
There has been a considerable amount of attention on Bitcoin in the news lately. However, from my conversations with people, they still don’t know what to make of Bitcoin or Crypto. I’ve heard it is a Ponzi scheme, it has zero value because it is not physical, it was created by a foreign power to destroy the dollar, and let us not forget the “Elon Musk is Satoshi Nakamoto” theory.
This article will be the first article in many covering Crypto Assets and Blockchain technology. I am attempting to answer some of the questions I have been asked on the subject. As the disclaimer says below, these are my opinions and should not be considered financial advice. However, I hope this article helps clear up some confusion that has been out there regarding this subject.
Let’s take a quick look into just what Bitcoin and blockchain technology are.
What is Bitcoin or BTC?
A white paper named “Bitcoin: A Peer-to-Peer Electronic Cash System” was released in 2008 to the infamous Cypherpunks mailing list. The paper details the use of an electronic peer-to-peer money system to be used for payments over the Internet. This would essentially cut banks and financial systems out of the middle of your financial transactions. For the first time, everyone could have the ability to be their own bank if they so choose. In 2009 the first version of Bitcoin was released to the world and into history.
Who created Bitcoin?
What do we know about Satoshi Nakamoto, the creator of Bitcoin? He never existed. Satoshi was a pseudonym of a person or group that designed, developed, and released Bitcoin. We know that Satoshi mined about one million Bitcoins and never used them. In 2010 he sent his last message before disappearing forever. However, that did not stop the Bitcoin project. The Bitcoin project has continued without him.
What is a blockchain?
Crypto assets, including Bitcoin, are built on a blockchain. A blockchain is an immutable ledger that keeps track of all transactions within the system. Once a transaction has been written, it is there forever. With Bitcoin, when a new transaction is processed, it is sent to a group of “Miners” to verify its legitimacy. The miners are given a cryptographic puzzle to solve that verifies the transaction is legit. The first miner that solves this puzzle gets paid in Bitcoin, and the transaction gets written to the blockchain. Every full node has a copy of the whole blockchain with all the transactions since the first one. If someone tried to change an entry, everyone would know it was not legitimate. This procedure is one of the most secure and redundant systems available.
What is with all these different crypto projects?
If you look around the market, you will see hundreds if not thousands of different alt-coins. Some are clones of Bitcoin or other projects. Unfortunately, some were created as “get rich quick” schemes for their creators. Therefore, you still need to be careful before investing and do your research, just like if you were buying stocks or anything else for that matter.
Below I have a few crypto projects that I believe are interesting or have a bright future. All three are smart-contract based projects:
Ethereum (ETH)
If Bitcoin is digital gold, think of Ethereum as digital silver. A then 21-year-old Vitalik Buterin imagined a decentralized application and smart contract platform. Of course, Ethereum has monetary value, but what makes it is so interesting is the Ethereum Virtual Machine (EVM). The EVM is a decentralized virtual machine environment used for Decentralized Applications (Dapps) and Smart Contracts. All of this is built over an immutable blockchain. I won’t go into NFT’s at this point, but most are available through the Ethereum ecosystem.
Cardano (ADA)
The founder of Cardano, Charles Hoskinson, was one of the original eight founders and CEO of Ethereum. However, Charles had alternative ideas on the way things should go with Ethereum and decided to step away. Later he founded Cardano, a public blockchain and smart-contract platform. I can’t say enough good things about Cardano. They have been taking their time to do it the right way. They recently announced that smart contracts go live on their production network on September 12th, 2021. This is a considerable upgrade that should bring more decentralized applications to their ecosystem.
Polkadot (DOT)
Another Ethereum founder, Dr. Gavin Woods, created Polkadot. Polkadot was created to do a lot of the same things that Ethereum does. Like Charles, Gavin learned from his time with Ethereum and had different ideas on implementing an ecosystem.
Is it too late to get into Crypto, and what is this DCA thing?
It is never too late to get into Bitcoin and Crypto. In my opinion, the best way to accumulate crypto assets is to buy a little each month. This is known as Dollar-Cost Averaging (DCA). It doesn’t have to be a lot, but be consistent. You can even automate the purchase through an exchange to execute every month. So don’t watch the rise and fall, just hold your Crypto.
Think about this. If someone purchased $20 in Bitcoin every January starting in 2013 and ending January of 2021, that would be a total of $160 invested and 1.7 BTC accumulated. As I am writing this, the Bitcoin price is sitting around $45K. That theoretical $160 would now be worth $76,500. Imagine if that was monthly or weekly instead of yearly. Think about the financial gains they could have been made. Dollar-cost averaging doesn’t care about the rise and fall of the price. It just purchases both the highs and the lows and averages it out.
There is a great DCA calculator available at https://dcabtc.com/. This calculator is not just educational but a lot of fun to play with!
In Conclusion
It isn’t too late to get into Crypto. It is a new and rising industry that is extremely early. This is the time you should be researching if Crypto is an investment for you. Even if you don’t want to invest, join a project and get involved!
Reading and Related Links:
The Bitcoin Whitepaper
The Ethereum Whitepaper
Why Cardano
The Polkadot Whitepaper
*** Disclaimer: I do not provide personal investment advice, nor am I a qualified licensed investment advisor. I am a nerd who likes to learn new things and share them with others. All information found here is for informational and entertainment purposes only and should not be considered personal investment advice. While I believe this information to be correct, it may include errors or inaccuracies.
