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The Ups and Downs of Cryptocurrency

By Stacey Stateler


As you’re probably aware, cryptocurrency has been all the rage for people hoping to cash in on some easy money these days. We’ve all heard of BitCoin, but lately, a plethora of new cryptocurrencies have emerged on the market. It’s a scary world to navigate when you’re just starting out, and it’s not for everyone, but it does have its obvious benefits if you play your cards right. There are, of course, obvious risks as well. In this article, I interview two cryptocurrency investors on their experiences within the wild west of the crypto market and discuss a few things you should consider before navigating it yourself.


There’s a lot of jargon when it comes to the world of cryptocurrency, but the gist of its functionality is that it operates on a blockchain. According to the website of the first cryptocurrency, BitCoin, (https://bitcoin.org/en/how-it-works), the blockchain is basically an intricate network of computers that work to all reach the same mathematical conclusion when a BitCoin (and generally any other cryptocurrency) purchase is made. This ensures that the individual BitCoin spender actually possesses said currency, and essentially prevents fraud. Its primary appeal, especially in early years was anonymity. I remember when it first came out, it was mainly known as a new means to acquire illicit drugs under the radar. Since then, of course, it’s been applied for a plethora of other uses as its value skyrocketed.


With the ongoing pandemic and economic downturn, the lucrative nature of cryptocurrency can be tempting for the underemployed, and especially for mothers who may have given up many work hours when the kids have to take school at home. For those brave enough to venture, it could end up rewarding, or devastatingly crushing. One investor became a millionaire by investing in a currency that started out as a joke, called DogeCoin (https://www.deseret.com/u-s-world/2021/4/23/22399296/dogecoin-success-story-investments). Others have taken it way too far and lost more money than most of us can fathom ever having, such as this man, who lost millions when investing became an obsession (https://www.bbc.com/news/uk-scotland-57268024). There was also, of course, the situation in 2018, where the cryptocurrency OneCoin turned out to be an elaborate Ponzi scheme, leaving a trail of victims in its wake (https://medium.com/illumination-curated/onecoin-the-4-billion-scam-ed2e9103e449).


So, where does this all leave us? How can we safely invest in cryptocurrency without being scammed, or going too far down the rabbit hole? One big thing you need to worry about is the service through which you acquire and exchange your cryptocurrency. There are plenty of fraud cryptocurrency wallets and exchange apps out there ready to prey on the naïve novice. One that’s often recommended is the exchange service, CoinBase (https://www.coinbase.com/), which gives you your own crypto wallet to store your currency within its system. Other people choose to go for a separate cryptocurrency wallet, which basically functions as an address, with its own extremely long password to get in. For those who choose to go this route, they can buy a physical hardware wallet, such as Ledger (ledger.com) or a software type one, like Exodus (exodus.com). If you’re worried a currency might be a scam, you should check to see if they have a whitepaper. For example, here is Ethereum’s whitepaper: https://ethereum.org/en/whitepaper/ .


Finally, if you’re worried about getting in too deep, it might be wise to consider investing in cryptocurrency the same way you would gambling, and avoid it all together if you’ve had gambling problems in the past.


With all this in mind, lets now consider the advice of these two cryptocurrency investors: Eric and Lisa, who each have their own varied style in how they play the game.


Question 1: How long have you been investing in cryptocurrency, and how much are you investing?


Eric: Six months and 700 dollars total invested.


Lisa: Two months. 1500 dollars.


Question 2: What is your current favourite cryptocurrency to invest in and why?


Eric: My favourite is Monero, because it’s fully untraceable and private, which is something we’re slowly losing.


Lisa: Polygon Matic. It is a ‘side chain’ token that runs alongside of the Ethereum main chain to speed up transactions and reduce costs. It is a proof of stake coin, so it uses less electricity to validate.


Question 3: What would be the most important piece of advice you’d give to someone just starting out?


Eric: Buy when it crashes and HODL (hold on for dear life). It’s going to be a rollercoaster. Also, NEVER share your seed phase with ANYONE EVER.


Lisa: Do not invest more than you can afford to lose. Look at it like a trip to Vegas.


With these interviews and this article considered, if you want to set out into the world of cryptocurrency, don’t just stop here. Do your own additional research, and be diligent. There is a lot to know, and it will seem intimidating at first. If something seems suspicious, trust your gut and look into it. Large internet communities, like Reddit’s subforum https://www.reddit.com/r/CryptoCurrency/ can help you verify the validity of services and currencies alike. Most importantly, remember that the magnitude the cryptocurrency market has reached is an extremely recent phenomenon; even the experts are new to this, and no one can predict how this will all end up long term.


Photo by Executium on Unsplash

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