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get-rich-top-9-reasons-to-invest-in-crypto

Top 9 Reasons Why People Invest in Crypto

May 31, 2022/0 Comments/in Cryptocurrency /by Wallet Squirrel

Cryptocurrency the urge to invest in crypto has grown in popularity over the last several years. However, a fair proportion of the general public still wonders why it is causing such a stir. Among so many questions, one that particularly stands out is “Is investing in cryptocurrencies worth it?” The answer is an emphatic yes. To give you a better idea, we are narrowing down the reasons why you should invest in crypto:

Cryptocurrency the urge to invest in crypto has grown in popularity over the last several years. However, a fair proportion of the general public still wonders why it is causing such a stir. Among so many questions, one that particularly stands out is “Is investing in cryptocurrencies worth it?” The answer is an emphatic yes. To give you a better idea, we are narrowing down the reasons why you should invest in crypto:

1. Crypto Is The Future 

Even if you do not like the idea of moving away from paper currency, it has become inevitable. As crypto has started gathering more limelight, we have realized that eliminating paper money from the equation is adding to the efficiency of business transactions. 

There is a significant distinction to be made regarding this paradigm shift. That is to say, there are a greater number of cryptocurrencies available than we require, and they are fighting with one another not only for users but also for the attention of speculators.

2. Simple To Get Started 

The concept of cryptocurrency and how to invest in crypto may appear complicated. But it is very simple to get started with this type of investment. All you need to do is to follow a few simple guidelines. In the beginning, it is best to keep your cryptocurrency holdings to a very tiny portion of your overall investment portfolio. 

There are a wide variety of tokens to select from. For example, you can buy Ethereum, Tezos, Ripple, Tether, etc., to diversify your portfolio. Do your study and learn about the ones that spark your interest. At the same time, you need to keep in mind that many cryptocurrencies have historically attracted speculation and had price spikes before flattening out and disappearing. Once you have taken these factors into account, open up an account with an established cryptocurrency exchange and deposit a few dollars to get a feel for how the market works.  

3. Robust Security 

Due to their reliance on blockchain security, cryptocurrencies are more secure than traditional payment methods. This is hands down one of the biggest upsides of cryptocurrencies. The hash rate is a significant factor in determining the level of crypto security. If the hash rate is high, it will take a lot of computer power to hack the network. With the highest hash rate of any network, Bitcoin is the most secure cryptocurrency on the market. Though you might have heard about incidents related to crypto hacks, they are often the result of individual mistakes.  

4. Minimal Transaction Costs 

Physical financial institutions like banks charge fees and taxes on all digital transactions. To be fair, all of this makes sense because they have to pay salaries to their staff, rent out properties, and pay their bills. However, cryptocurrency transactions are a different deal. Since cryptocurrency transactions are conducted on online platforms, they result in lower transaction fees. This is one reason why more and more companies are embracing cryptocurrencies. 

5. Provide Hedge Against Inflation 

When it comes to protecting against inflation, gold and real estate were the go-to assets. During times of inflation, the value of these assets has remained stable or even increased. You may protect your funds against inflation’s devaluation by investing in these items. Despite this, there has been a continuing trend of investors showing less interest in gold. Even if it is still a good long-term investment, the returns are not what they used to be. In addition, moving and storing it is a hassle, and after the 2008 market meltdown, real estate has also taken a beating. As a result, only a select few can afford to invest in it. Enter cryptocurrencies!

Because of its restricted coin supply, cryptocurrency is a good inflation hedge. Take the example of Bitcoin. There is a hard cap of 21 million bitcoins that Satoshi Nakamoto put in place when he launched the world’s largest cryptocurrency. Since then, almost 19 million bitcoins have been created, with only 2 million to go. There is no way to raise the supply of bitcoin by changing its source code, as this will result in the creation of an entirely new blockchain.

6. Ensure High Liquidity 

If you are still undecided about whether or not you should invest in crypto this year, we have got another reason for you to do so. Bitcoin and other cryptocurrencies are easy to buy and sell, which refers to their high level of liquidity. On top of that, buying and selling cryptocurrencies is not just for wealthy individuals, large corporations, or financially savvy experts. In today’s market, crypto trading is extremely accessible. You can enter the market for as low as a few hundred dollars. 

7. Ultimate Asset Control 

Another enticing feature of crypto is that it enables investors to claim complete control over their assets. As mentioned earlier, crypto-assets do not require a centralized body to acknowledge ownership. Safeguarding your private keys is all that is required for you to have complete control over your cryptocurrency holdings. In times of crisis, retaining one’s assets without fear of bank failure means a lot. It is the only valuable asset that allows its owner to flee a war-torn country with billions of dollars simply by recalling a 12-word passphrase. 

8. Remarkable Industry Growth

In our lifetimes, cryptocurrency has been one of the fastest-growing markets. By the year 2021, the total value of the worldwide cryptocurrency market was $1,782. According to the well-documented report, the market is set to grow at a whopping CAGR of 58.4% between 2022 and 2027. There has been an increase in the use of digital technology in a variety of businesses. High-speed internet connection is becoming more commonplace in everyday life, which is a positive sign for the market.

9. Brief Processing Time 

Peer-to-peer crypto transactions are now possible thanks to blockchain technology. In other words, you do not have to worry about long wait times or financial institutions getting in the way of your sending or receiving of money. The vast majority of processing is completed in milliseconds.

The Final Verdict 

Cryptocurrency has been a buzzword for quite some time. Every now and then, we see one or the other cryptocurrency dominating all the news platforms across the world. Yet, when it comes to how to invest in crypto, many people seem to have ambiguity about it. Hopefully, going through this article would have given you much-needed clarity about what makes cryptocurrencies an appealing investment option.  

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/
how-to-buy-an-nft

The Metaverse: Everything I Learned on How to Buy an NFT

April 12, 2022/0 Comments/in Cryptocurrency /by Wallet Squirrel

Now that we got that out of the way, let us jump into how I went about hunting, researching, and finally purchasing an NFT. I spent months searching for a project I believed in enough to make an investment. There were also some mistakes made along the way.Before we even start talking about how to buy an NFT, I have something to get out of the way. While I have learned TONS of vital information about the NFT world, I am not an expert in the NFT world. This world is very complex, broad, and sometimes scary. Please before jumping into any project, do your own research and due diligence.

Now that we got that out of the way, let us jump into how I went about hunting, researching, and finally purchasing an NFT. I spent months searching for a project I believed in enough to make an investment. There were also some mistakes made along the way.

This is your chance to learn from my mistakes.

The Hunt

Many months ago I started researching the metaverse and NFTs. After my research on what the heck NFTs are, I decided I wanted to buy one. The next question I needed to answer was, “What kind of NFT do I want?”

As I mentioned, the NFT world has a lot going on right now. There are so many different genres and types of NFTs. I had no idea how complex this would be.

  • Artwork (JPEGs)
  • GIFs
  • Gaming
  • Collectible Items/Trading Cards
  • Music and Media
  • Virtual Fashion/Avatars
  • Real-world Assets

Utility Is a Must

One thing I knew was a must, was my NFT had to have utility. This means if I was to buy a JPEG, it had to provide more than just colored pixels. The NFT had to also provide real value on top of looking pretty. An NFT with utility can mean a lot of different things. Some give you voting rights within the project to help direct the project’s next steps or some give you access to real vacation homes (like a timeshare).

As time goes by, the utility can get bigger and better as well. That is why it is nice to be part of a project that has voting rights. Other utility projects can gain you real cryptocurrency that can be exchanged for USD. There is a whole wide world of really neat utility out there.

Where I Landed

As I mentioned earlier, I spent months trying to find the perfect NFT project for me to buy into. I looked at hundreds of different projects within the different types of genres I listed above. During my search, I kept a shortlist of projects that I liked. One night while I was reviewing, I noticed ALL but one of the projects on the list were gaming-related. As a gamer, it made sense that I would be attracted to these types of projects.

Having a passion for games made it an easy choice.

Finally, I had an NFT type to focus on. I was now excited to start digging into the projects.

Due Diligence

I started doing my due diligence on how to buy an NFT. I went through each gaming project one by one looking at various items.

  • Project Roadmap – Is it clear with a vision, complete, and has realistic goals?
  • Doxxed Team Members – Is the team anonymous or not? Could you do research on the team and previous projects?
  • Team Actions – How has the team performed so far? I think of this quote, “It’s not what you say that defines you, it’s what you do.”
  • Community – Is there a positive, realistic, active, and large community around the project?
  • White Paper or Articles – Has the team released a white paper or articles explaining the project?
  • AMA’s – Has the team done talks about the project on Discord or Twitter Spaces? How do I feel about the project after listening to the project?
  • Utility – Does the NFT have value beyond the pixels?
  • Cost – Does it fit within my budget?

This took a while but at the end of my research, I found a project that I really believed in, Troverse.

https://walletsquirrel.com/wp-content/uploads/2022/04/3hoofCT-Imgur.mp4

Why I Liked Troverse

Troverse is an open-world survival space game that has tons of potential to grow into something special. The possibilities for NFTs are endless such as voxels, space suits, ships, buildings, etc. The best and most valuable NFTs were put on the market first though, the planets. Troverse minted 10,000 unique planets that build the foundation of the game.

Here is what I saw in Troverse while going through my due diligence list.

  • Project Roadmap – The roadmap is complete even though there are some large gaps between the planet mint and the alpha release of the game, Q1 2022 to Q3 2022.
  • Doxxed Team Members – The team is partially doxxed and they have previous work released on Steam.
  • Team Actions – The team has always followed through with their words. In fact, they tend to outperform expectations. This gives me the impression the team is very smart, innovative, and creative.
  • Community – There is an awesome Discord community that is very engaged and supportive.
  • White Paper or Articles – There is no white paper yet which is somewhat concerning. The reason given for this is they are still putting the finishing touches on the gameplay. Not releasing the white paper allows for more flexibility to fine-tune things in case they find an issue with play.
  • AMA’s – Yes, the developers have done several AMA’s and I liked what they had to say.
  • Utility – Each planet owner can earn real income from the game. When someone mines minerals on your planet, you get a portion of those minerals that you can use for trading, selling, or building other NFTs.
  • Cost – The cost for me was a little pricey but I had the funds. I believe in the project long-term.

A lot of NFT projects end up being flipped quickly. This is not the case for the planets within Troverse. They are the initial NFT for a very large project that is going to take time to get fully developed, the beta release is Q4 2022. For a traditional investor nine months seems like nothing but in the NFT world, this is a LONG time!

I believe Troverse will be a pioneer in the NFT gaming space.

How to Buy an NFT

Mint

Minting is the release of a brand new NFT or NFT series into the market. I like to think of a mint similar to when a new music album is dropped. The major difference is that NFT projects have a very limited supply such as 200,000 unique tokens or as low as 888.

So how to buy an NFT by minting? Well most importantly, you need to get to know about the project before it is ready to mint. Why? Because a lot of the high-demand projects can sell out within minutes. For example, the Azuki project sold out in four minutes!

Getting in at Mint can be very tough. Because of the high demand, most projects have a whitelist (WL) that you need to be on in order to get in on the mint. Basically, the project will allow the people who got WL to mint (buy) the NFT first at the mint price. There will be a timeline for this buying phase which afterward, they will open it up to the public. In my experience, you do not want to be part of this public mint as thousands of people will be trying to purchase the last 200. This can make GAS fees skyrocket (more on this later)!

While WL makes sense, I hate it. To get WL for most projects you need to grind to gain status within a Discord channel or get lucky in a giveaway on Twitter. I tried to grind once then realized why am I working so hard for a project that should be trying to win me over.

This is one reason why I loved Troverse. Sure, yeah, they had the grinding for the WL but those people got the second pick. Troverse set aside 7,000 planets for a public reverse dutch auction. Then they did the WL mint phase with 2,700 planets. Anything that remained went to a general public mint. The reverse auction was something new that no one else had ever done (though a lot of projects are now copying the idea).

Learn other terms for the metaverse in our Metaverse Glossary.

Second Market

Unfortunately for me, I found Troverse too late and missed the public auction. For me, if I wanted to invest in the project, I had to buy a planet on the second market. The two most popular markets are Opensea and Looksrare. Here you connect a cryptocurrency wallet such as Metamask.

There are several ways to get crypto into your wallet. Metamask allows you to deposit using a debit or credit card ($30-$40 fee). Or you can purchase cryptocurrency using Coinbase or Binance and then transfer those funds to your wallet. I opted for the latter because at the time it was cheaper ($5 Coinbase fee + gas fees for the transfer). Now with funds in your wallet, you can use them to purchase any NFT you can afford.

In the current NFT market, purchasing on the secondary market is usually more expensive. For me, my planet cost triple what the mint price was. It turns out I could have waited a couple of days to get a cheaper price but that’s okay. The price could have gone up instead.

https://walletsquirrel.com/wp-content/uploads/2022/04/tjSjx7Q-Imgur.mp4

Lessons Learned

Yes, I made a stupid mistake when I was learning how to buy an NFT (more about that next) but I have also learned a lot from others as to what you need to watch out for. The NFT world is booming right now. A lot of people are making a lot of money during this boom. This boom will also attract some people trying to take advantage of people. This is something you need to watch out for.

Rug Pulls (Scams)

A rug pull is when the person behind a project simply vanishes after the mint. They take all of the resources with them and you lose everything even the NFT that is supposed to be yours.

I had this happen to me with a GIF project called, Invisible Doodle Friends. For fun, I wanted to get into a low supply project with the remaining $100 I had leftover after purchasing my Troverse planet. I found the doodle project on Twitter, it looked legit (they always do). I made the mistake of letting FOMO settle in because they were minting right then and the price was perfect. After five minutes of research, I decided to mint.

The rug pull didn’t happen for another few days after they did the reveal and the GIFs were just JPEGs. After word got out about it being a scam, the creator pulled the rug from underneath the 2,222 people that purchased.

For me, I only lost $60. I came out with an awesome learning moment to share with you as well.

Liquidity

Remember, NFTs are not liquid investments like stocks or most cryptocurrencies. You need to find a buyer which can take a while. This was something I didn’t think about until I started getting deep into my research.

Bad Teams

There are teams out there that are not scammers but they are not good developers or project managers. Before purchasing, do as much research on the project’s team members as you can.

One competing space project to Troverse did their reveal a few months before Troverse. The results were not good. The graphics ended up being horrible and the value of the project tanked.

High GAS

GAS is the cost to process the calculations to complete your transaction on the blockchain. When there is a lot of demand, the prices go up. If you are trying to compete to get one of those last 200 NFTs in a mint, the price of GAS is going to skyrocket. Be prepared to speed a lot of extra money just for that mint.

Oh yeah, if someone beats you out with a higher GAS price, you still lose your GAS money. You do not get it back. Pretty silly, right?

Unless you are very experienced with how to buy an NFT and have good funds, I would avoid these bidding wars. There are a lot of very large whales out there.

Concluding How to Buy an NFT

Overall, the NFT world is a very fun place. It is perfect for those people who enjoy collecting and flipping/trading items they have collected. I once heard that the NFT world was the perfect place for sneakerhead collectors.

I am glad I jumped into the space. It is something that interests me and I would kick myself if I didn’t give it a try. My adventure hasn’t been perfect and neither will yours be. That is okay. Sometimes it is okay to make mistakes as long as you learn from them.

I don’t think I will be putting more money directly into NFTs though. My issue is with the lack of liquidity NFTs don’t have. I want my investments to have a little more liquidity. I still want to invest in some more gaming projects though so I will find ones that have a coin that I can purchase such as Star Atlas or Axie Infinity.

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/
metaverse-terms-you-should-know

The Metaverse: Terms You Should Know to Get Started

January 11, 2022/0 Comments/in Cryptocurrency /by Wallet Squirrel

When I started researching the Metaverse late last year, there were several moments when I was completely lost. After many hours of research I have decide to put together a Metaverse dictionary to help us all out learn about this new world. #metaverse #blogging #cryptocurrencyWhen I started researching the Metaverse late last year, there were several moments when I was completely lost. This was because I ran into terms such as minted and DOA that I had no idea what they meant. I am sure I am not the only one so I have created a dictionary of metaverse terms that you should know to get started. 

My goal with this dictionary is to create an easy reference of various metaverse terms to help make our journey a lot easier. Some of the terms are more simple than others. I wanted to create a very robust dictionary that is meant for everybody ranging from the earliest newbie to the more experienced. 

Last thing, as I continue my exploration in the metaverse and stumble upon new terms, I will be adding them here. This list is not static. It will continue to grow. Be sure to bookmark this article so you can use it too!

Did I forget a term? Let me know in the comments below!

Metaverse Terms You Should Know

Augmented Reality – Also known as AR is a digital interactive experience within the real world. Typically this is used to enhance the user’s experience within a game or application. Think of Pokemon Go.

Blockchain – Blockchain is a decentralized ledger that is often stored in blocks that are chained together. Bitcoin and Decentraland are all built using blockchain.

Blockchain Gaming – The games have aspects within them that use the decentralized blockchain. These aspects typically revolve around cryptocurrency or non-fungible tokens. Think Axie Infinity or Sandbox.

Cryptocurrency – A decentralized digital currency that is built using blockchain. Prime cryptocurrency examples are Bitcoin or Etherium.

DAG Technology – To put it simply, Directed Acyclic Graph technology is kind of a competitor to Blockchain. Instead of using and stringing together a series of blocks, DAG does not use blocks. It is a network of individual transactions linked to multiple other transactions which don’t need to be chained together with blocks. This allows for cheaper, more efficient, and quicker transactions. 

Decentralized Autonomous Organization – Also known as DOA, is a form of investor-directed venture capital fund. DAO was launched back in 2016 after a crowdfunding event. It set out to provide a new decentralized business model for organizing various enterprises. (Wikipedia).

Gas Fees – This is the fee that it takes to complete a transaction on the blockchain. These fees are in place because cryptocurrency miners are required to complete transactions by solving complex mathematical problems. The first miner to solve the problem is paid for the use of their resources. This is paid by the gas fee.

Hashgraph – Considered as a competitor to the blockchain, Hashgraph is a distributed ledger technology. Hashgraph is patented so it is not open to use like blockchain. Hashgraph is a more advanced technology compared to blockchain because it is more efficient. 

Internet of Value – A concept that is said to be brought forward by Ripple where value moves and is exchanged freely like information is in the current internet. 

Layer-2 – Layer-2 references a technology or network that sits on top of a blockchain protocol. This is usually done to improve efficiencies and scalability. One example is The Lightning Network. 

Non-Fungible Token – Also known as an NFT is a unique digital item. There are endless possibilities of what an NFT can be. The key aspect of what defines an NFT is they need to be unique, non-fungible. They also need to use a token to verify its uniqueness by using blockchain, DAG, Hashgraph, etc. Some examples include a JPEG of a fish, a piece of clothing in Sandbox, a Satellite in a virtual space game, or even a plot of land. 

You can read more about NFT’s in our What The Heck Are NFTs article.

Meatspace – The real world, planet Earth, that we physically live in/on. 

Mint – The release of a new NFT out into the market is referred as minted. Think of when a new album would drop in stores. 

Rug Pull – When a creator of an NFT simply vanishes off the web. They take all of the resources with them and you lose everything. 

Security Tokens – Security Tokens are digital liquid contracts for fractions of assets that have value. Examples would be stocks, real estate, and even a car. This is an area that the meatspace meats the blockchain market because these contracts are preserved on the blockchain ledger. 

Smart Contract – These are transactions or computer programs that are set to run on the blockchain when predetermined conditions are met. Smart Contracts help remove the middle man because they automate the execution of an agreement. 

Staking/Yield Farming – Simply put, Staking/Yield Farming is when one party lends out cyptocurrency to another party in exchange for interest or other rewards. 

Web 3.0 – The next generation of the internet. It is considered moving to the decentralized metaverse will be the next phase of the internet, Web 3.0. 

Virtual Reality – Also known as VR, is a simulation that immerses the user into the surroundings of the program they are running. Typically the user will wear a headset such as an Oculus for this immersion. 

Other Metaverse Term resources

There is so much in the metaverse that revolves around the blockchain and other similar technologies. If you are hungry for more information, I recommend taking a look at these resources to continue your research. Happy reading!

  • Gemini Cryptopedia
  • Investopedia
  • Coinbase Learn

 

If you are looking for other ways to earn more money each month but the Metaverse does not seem like your cup of tea, then I recommend hopping over to our Ways to Make Money page. Here at Wallet Squirrel, we are all about finding new ways to make money each month to get us to financial freedom. We have compiled a massive list of other ways for you to earn more money.

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/

The Metaverse: 11 Ways You Can Make Money in the Metaverse

December 14, 2021/1 Comment/in Cryptocurrency, Earn Extra Money /by Wallet Squirrel

One question I have had about the Metaverse is, "How can I make money in the Metaverse?" I am a big tech nerd so having another side hustle is something that is only getting started is something that interests me greatly. So, let's take a look at potential side hustles in the metaverse to see how we can make more money.One question I have had about the Metaverse is, “How can I make money in the Metaverse?” I am a big tech nerd so having another side hustle that revolves around technology really piques my interest. So, let’s take a look at potential side hustles in the metaverse to see how we can make more money.

1. NFT Art

The NFT art market is on fire right now! If you do a quick Google search for “NFT art” you will quickly find a news article about a piece of NFT art selling at a new record price. Recently, I saw that someone bought a Bored Ape NFT for about $50 a couple of years ago and they just sold it for $1.8 million!

The idea is to buy some NFT Art and put it in an art gallery within the metaverse. Obviously, your goal is to buy the art for cheap and sell it for a lot.

2. Voxels

What is the heck are voxels? I had no idea until I started writing this article. Yay for learning new things!

Voxels are actually pretty cool. They are the “materials” used to create other items within the metaverse. Think of them as a 3D pixel that can be combined with other voxels to make buildings, clothing, cars, and other metaverse items.

If you are familiar with the game Minecraft, you are very familiar with voxels.

There are stores that are selling voxels to others. This is a prime business model to make money in the metaverse.

The next two ways to make money in the metaverse are wild to me.

3. Construction

There are now metaverse construction companies! Say what?!?!

One company, Voxel Architects, is even making $300,000 per project to help others build buildings within the metaverse. I guess you could look at these construction firms as a new generation of website developers.

4. Real Estate

Real estate has been booming for the major virtual world metaverses such Dencentraland and Sandbox. Because of this, virtual real estate companies have been popping up. You can start helping people list their plots of land and make a nice commission off that sale.

5. Advertising

Just like in the real world, you can create advertisement platforms in the metaverse. People are building advertisement signage on their buildings and so on. Also, real work companies like Nike are building their own little corner of the metaverse to help with marketing for their items.

6. Parcel Rentals

Just like in the real world, people can rent out land or space in a building within the metaverse. Sometimes people will buy land but don’t know what to build so they will rent it out to other people.

I think this is a viable place to start for people who want to start their own store because virtual land is SUPER expensive!

7. Games

Gaming is a massive industry. There is no doubt that will be true in the metaverse. There are platforms being built that are MMORPGs with their own currency and land. Also, you can build games within existing metaverse platforms like Decentraland and Sandbox. People have built arcades with classic games or even casinos. I think building out these games will take a lot of technical knowledge compared to something like building clothes.

I suspect there will be a gaming boom once more virtual reality is introduced within the metaverse. I can imagine bowling alleys, laser tag arenas, and even ax throwing as major destinations.

8. Online KTV (Karaoke)

Apparently, karaoke is a big thing in the metaverse. There is no doubt doing karaoke with friends is a silly but absolute treat. Sadly, it is tough to get everyone together at once. With karaoke in the metaverse, everyone can get together no matter where they are.

So how are you going to make money in the metaverse with karaoke? Well, you can start your own karaoke bar or you can create music NFTs to sell to other karaoke bars. Also, you could start other types of places such as virtual trivia nights or speed dating.

I think there are a lot of opportunities beyond karaoke.

9. Virtual Clothing

Yep, you can buy virtual clothing for your avatars in these virtual worlds. People are making clothing for people to buy so they can customize their avatars. In fact, a cryptocurrency investing firm just bought over $2 million in land within Decentraland’s fashion district just so they can sell virtual clothing.

Someone will need to make the clothing for them to sell. Will that be you?

As we learned in our ‘What is the Metaverse‘ article, sadly, you can’t take your clothes with you from one metaverse to another. But! These clothing pieces are NFTs as well so you could turn around to resale your avatar’s clothes for more money.

10. Collectibles

Just like trading cards (these are in the metaverse now too) or beanie babies in the real world, there are also collectibles in the metaverse. Collectibles range from clothing to a sword to a car and even up to a yacht. These collectibles are all also NFTs so they are unique and cannot be replicated. People are constructing collectibles, out of voxels, that fit within their world to sell on the open market.

11. Data Science

As a data & analytics person, I can only imagine the data these metaverses are collecting on people. Just like in today’s internet, websites can see every click you make on a webpage. I am sure they are doing this same data collection along with where you visit most and so on.

It is easy to say that data science is being used for advertising. It is also used for market analysis. Store owners and landowners want to know more about the people visiting their little slice of digital space. Also, people will want to perform market analysis on others so they know the proper pricing of products or land.

Data Science teams can buy the data from metaverse platforms and put the data into easy-to-digest reports for their customers. This allows the customer to make data-driven business decisions to make more money on the metaverse.

Conclusion

I think there are a lot of really cool opportunities to make money on the metaverse. These are only some of the ways someone can make money in these virtual worlds. I’m sure we will see more unimaginable creative ways to make money on the metaverse in the next five to ten years.

Personally, I also find these ways to make money in the metaverse a little surreal. We are seeing new industries in the real world being founded for a virtual world. It is really cool to see!

Really the metaverse is like today’s internet but in a three-dimensional digital world instead of our current flat web pages. Metaverse architecture firms are just like web developers for today’s internet. A real estate firm is just a domain name provider like Go Daddy. And a virtual world like Decentraland is basically just a web hosting provider for your land plots and buildings like Bluehost is for your web page.

Making money in the metaverse not sounding like the right side hustle for you? Well, check out our Ways to Make Money page. Here we list out 70+ side hustle to help you earn more money.

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/

The Metaverse: What The Heck Are NFTs?

December 10, 2021/0 Comments/in Cryptocurrency /by Wallet Squirrel

Seriously though, what the heck are NFTs? Even spelling out what NFT stands for, non-fungible token, doesn't help. In fact, I might be more confused now.Every morning, I hop on Twitter to do some mindless scrolling to see what is important to the Twitterverse today. I mostly get nothing out of this time but sometimes I get some good tidbits for my fantasy football team. Recently though, I have been seeing a lot of tweets about people buying a bored ape NFT or meme selling as an NFT for $500,000. These headlines just keep flooding my news feed day after day and all I can think to myself is, “What is an NFT?”

Seriously though, what the heck are NFTs? Even spelling out what NFT stands for, non-fungible token, doesn’t help. In fact, I might be more confused now.

To continue on with our metaverse series, let’s take a look at what NFTs really are. For me personally, this article really helped me understand what NFTs are. I’m not biased or anything though. 🙂

What Does NFT Stand for?

As mentioned earlier, NFT stands for non-fungible token. Really, this doesn’t help define what an NFT is.

Let’s start at the basics then. Non-fungible stands for, “a unique digital identifier that cannot be copied, substituted or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership” (Merriam Webster).

As an example, something fungible would be a US dollar bill. That dollar bill can be replaced with another dollar bill that has the exact same meaning and value. On the flip-side, something non-fungible would be a plot of land in a neighborhood. Sure all of the land plots are exactly one acre in size but each one is slightly different. One plot might have 20 trees on it when another only has 5.

Lastly, token refers to the blockchain aspect of where NFTs are part of. Most NFTs are built on top of the Entherium blockchain. This token is the unique identifier that records its ownership. Crazy enough, it records and holds all of the ownership history. That’s right, you can hop into an NFT listing to see who has owned it in the past and how much they bought it for. Pretty cool, right?

Copy and Paste Issue

An awkward thing is you can copy and paste NFTs. Back in February 2021 a 10-second clip by Beeple sold for $6.6 million.

Spoiler! You can right-click on that clip and save it to your computer’s desktop.

Wait, what?!?! How is that possible? Well, you can copy a digital file as many times as you want, including the art that’s included with an NFT. Think of this like buying a print of the Mona Lisa. At the end of the day, you might have a copy but it is still not the original.

Think of it this way. Before the blockchain, you could take a JPEG, make a copy of it onto a flash drive, and then copy that JPEG over to your friend’s computer. Those copied JPEGs are the exact same as the original on your computer. There is no difference between them at all. Your friend could take that JPEG and take credit for it. There would be no way to tell that your JPEG is the original. If your JPEG was an NFT tied to the blockchain, you would be able to see that yours is the original plus all of the history for the NFT.

Pretty cool, huh?

Why Are NFTs So Special?

People are treating NFTs as digital collectibles or even virtual plots of land to build virtual buildings on to sell virtual goods from. They are unique pieces of work that cannot be replicated.

NFTs can be:

  • Digital Art
  • Digital Trading Cards
  • Music
  • Virtual Land
  • Tweets (So weird)
  • Memes and GIFs

There are so many more outside of this list such as buying digital clothes for your avatar in Decentraland. I am sure there are so many more ways NFTs will be special that we have not even thought about yet. Personally, I hope they find some better reasons to buy an NFT because I am not going to be buying any digital hats anytime soon.

Where Can I Buy An NFT?

Digital-artwork NFTs are sold on specialty web markets such as Opensea, Rarible, and Zora.

NBA Top Shot is a virtual trading card NFT site while Cryptokitties is a Pokemon-like digital collecting app.

You can also jump into a virtual world like Sandbox or Decentraland to find all of the above plus real estate or collectibles for your avatar. Even in some virtual worlds, you can buy a spaceship! So cool!

Another thing is you don’t have to buy an NFT directly to invest in them. Some of these virtual worlds have their own cryptocurrencies that you can invest in outside of the world. For example, Decentraland has the coin MANA and Axie Infinity has the coin AXS.

Can I Even Do Anything With My NFT?

Good question. What can you do with an original piece of digital art? Well, some people are printing them and hanging them in their house or office but that would not be the original. To display the original like an art gallery you can use a digital screen. The wild thing is we are starting to see physical galleries display NFTs instead of traditional art. But you are also seeing virtual NFT art galleries pop up in virtual worlds like Decentraland.

Remember NFTs are more than just art pieces. People are buying virtual land, an NFT, to build NFT shops so they can make more money. Recently, a company bought land in Decentraland for over $2 million so they can create a virtual clothing store to sell for people’s avatars.

To me, this just blows my mind!

For many people, the appeal is to buy and sell items. I look at this similar to trading cards or rare coins. People are buying NFTs at low prices and taking advantage of the current climate to sell them at higher prices.

What’s Next?

This is the million-dollar question. Well, trillion-dollar question. Where will these NFTs end up in several years? Will they go to the wayside with your beanie babies? Or will NFTs become a new normal for buying art, music, collectibles, or something completely new that we can’t even imagine yet?

Personally, I think we are just in the beginning with what NFTs and the metaverse can become. It will be fun to see where this technology goes in the next five years. I see there is a lot of opportunity for growth and innovation.

The real challenge is to find where that growth and innovation are going to come from.

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/
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The Metaverse: What is the Metaverse?

December 3, 2021/0 Comments/in Cryptocurrency, Earn Extra Money /by Wallet Squirrel

What is the Metaverse? I think that is a question a lot of us asked recently when Facebook announced they were changing their name to Meta as they have decided to drop $10 Billion into developing their own platform for the metaverse. I was one of those people that found myself asking, "What is the Metaverse?"What is the Metaverse? I think that is a question a lot of us asked recently when Facebook announced they were changing their name to Meta as they have decided to drop $10 Billion into developing their own platform for the metaverse. I was one of those people that found myself asking, “What is the Metaverse?”

As I dove into answering that question, I realized there is not a simple answer compared to if you asked what the color of an orange is. My pursuit for an answer has turned into a massive rabbit hole that I don’t see an end to. Every turn I take there are four more tunnels to go down.

What is the Metaverse?

So what exactly is the metaverse? I have heard and seen several different definitions such as “the metaverse is like the real world but on the Internet” or “the metaverse is a place to interact with the virtual world.” Technically, these definitions are not wrong.

Ultimately, the metaverse is a grouping of virtual platforms brought together to create the metaverse. Like the internet, the metaverse cannot be created by one group. Many groups need to come together to create their own contribution to the metaverse. Think of it this way, did Google create the internet itself? No, millions of people contributed to creating the internet as we know. The metaverse will be the same way.

Here are the two best definitions I have found. The first is from NFT artist Jason on the Metaversable podcast.

“The metaverse is kind of like the real world except for it is on the internet and it is anything you want it to be and you can shape it at will provided you have the tools to do so.” – Jason known as 0xBanana 

The second is from Facebook (Meta).

“The ‘metaverse’ is a set of virtual spaces where you can create and explore with other people who aren’t in the same physical space as you.” – Facebook (Meta)

The metaverse is more than just games and social interactions, it is also a digital economy. It is a place people can buy, sell, and trade goods such as NFTs and virtual land. With the use of blockchain technology and cryptocurrency to support these digital economies, some have become really large such as Sandbox and Decentraland.

So What’s the Big Deal?

There are several technologies that help make up the metaverse such as virtual reality (think of a social game on the Oculus) or augmented reality (think of Pokemon Go). People can also interact with the metaverse in more simple ways as well such as just playing a game like Fortnite on your Xbox or Axie Infinity in your web browser.

The metaverse is considered to be the next generation of the internet, Web 3.0. What is Web 3.0? Good question, here is what I found,

“Web 3.0 represents the next iteration or phase of the evolution of the Web/internet and could potentially be as disruptive and represent as big a paradigm shift as Web 2.0. Web 3.0 is built upon the core concepts of decentralization, openness, and greater user utility.” (Investopedia).

While Web 3.0 is supposed to represent decentralization, openness, and greater user utility, I personally think greed will get in the way but who knows. I have a feeling that a lot of wealthy people that were able to get into the metaverse early are the ones that will control it.

Hopefully, I am wrong. Maybe my subconscious has Ready Player One locked in the back of my mind creating this pessimism.

Can You Transfer Your Items Between Platforms?

So far we have learned that the metaverse is made of up many different platforms and each can have its own digital economy. This introduces a whole new way to purchase digital items for your digital life. But what happens if you build this awesome life on one platform but want to go to a different platform? As of right now, you cannot go from your “house” in one platform to hang out with friends at a digital putt-putt course in another. The hope is that eventually, the metaverse will be a place where all of the platforms “talk” to each other allowing you to move throughout all of them.

While this sounds really cool, I am a little skeptical if this will really happen or not.

There are technical issues that make transferring items between different platforms extremely difficult. For example, if you want to transfer a hat from Decentraland (a platform with smooth rendering) to Sandbox (a platform with blocky rendering, think Minecraft) it would be a challenge for the receiving system to rerender the hat. How is that hat supposed to look in Sandbox compared to Decentraland? The creator of the hat NFT, yes that hat you bought is an NFT, would need to create renders for all of the platforms.

There are other issues such as formatting and so on that need to be figured out. It has been said that transferring an object from one platform to another is the most difficult challenge to overcome in the metaverse.

Examples of Platforms Within Metaverse

A list of examples of platforms within the metaverse could go on and on. For the purpose of this article, I plan on trying to narrow down a list that shows you what kind of platforms contribute to the metaverse is. This will hopefully help answer the purpose of this article, what is the metaverse.

Virtual Worlds

These worlds are like the real world but on the internet. Create your own avatar which becomes you. Within these virtual worlds, you can walk around, interact with others, shop as if you were in a store, buy/sell/trade items, build things, play games, and so on!

  • Decentraland
  • Star Atlas
  • Bit Country
  • Sandbox
  • Starl

Games

Fortnite and Warcraft are probably the most commonly used examples of metaverse games. These are worlds you can submerge yourself in while interacting with other players. In some games, you can even earn crypto. So cool!

  • Axie Infinity
  • Fortnite
  • Warcraft

NFTs

NFTs are complex in themselves and warrant their own article. They make up the pieces of art, collectibles, virtual land, your avatar, and so on. You can purchase NFTs in a lot of places such as within a virtual world or on a traditional website such as Opensea.

Is the Metaverse Here to Stay?

I wish I had a crystal ball to tell you but this is an impossible question to answer. The metaverse is something to explore and keep an eye on. The metaverse really could be the future. Some major and respected investors are saying this will be a multi-trillion-dollar opportunity. Cathie Wood, one of those investors, thinks this will reach every sector of our economy “in ways that we cannot even imagine right now.” (Business Insider).

On the other hand the metaverse could disappear as quickly as beanie babies did in 1994.

Where to Get Started?

Embrace the rabbit hole! Because of how broad and abstract the metaverse is, it took me a while to finally start to understand what it is as a whole. There are so many parts to the metaverse that it is difficult to grasp an understanding quickly. Sure, I just put together an awesome summary of it but reading about the metaverse is different when you are actually exploring it.

I recommend jumping in and playing around. I signed up for Decentraland and a couple of other metaverses to get some hands-on experience.

As you explore, be safe though. This is a new world that A LOT of people are flocking towards including scammers. If the deal seems too good to be true, it probably is. Just the other day, a photographer I follow posted on Twitter that someone stole his photographs and was trying to sell them as NFTs on OpenSea. Wild!

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/

Is Crypto Mining Still Profitable in 2021?

August 12, 2021/in Cryptocurrency /by Jimmy Olsen

With Bitcoin (BTC) becoming a trillion-dollar asset class and still rising in 2021, more people have become interested in learning how to mine cryptocurrency. But Bitcoin mining can be a costly process, in terms of both expensive computer hardware and software, as well as the energy it takes to keep that mining equipment running. This article will explore whether Bitcoin mining is worth it in 2021, and what some alternatives might be. With Bitcoin (BTC) becoming a trillion-dollar asset class and still rising in 2021, more people have become interested in learning how to mine cryptocurrency.

But Bitcoin mining can be a costly process, in terms of both expensive computer hardware and software, as well as the energy it takes to keep that mining equipment running. This article will explore whether Bitcoin mining is worth it in 2021, and what some alternatives might be.

Why Bitcoin Mining Exists

Bitcoin mining is the process by which new bitcoins are brought into existence—a process that is capped at 21 million BTC, according to the Bitcoin protocol. As time goes on, mining Bitcoin becomes more difficult, as more miners compete for the next block reward. Today, mining Bitcoin as an individual is rarely profitable unless someone has access to extra low-cost electricity.

Recommended: How Does Bitcoin Mining Work?

The Bitcoin Mining Process

Every Bitcoin transaction gets recorded in a giant public ledger called the blockchain. When a new Bitcoin transaction gets executed, it gets sent to the miners (aka Bitcoin users) for verification.

This verification involves a mathematical proof of work, created by trying billions of calculations per second. Once the complex mathematical problem is solved, the transaction is confirmed and added to the blockchain, and the miner/s who solved it get rewarded with new Bitcoin.

As more bitcoins are mined and the supply of new bitcoins drops, the amount of bitcoins released with every new block diminishes over time. This is known as Bitcoin halving. Generally, the value of Bitcoin soars after periodic Bitcoin halving.

While Bitcoin mining may seem lucrative, to do so effectively requires specialized machines built and tuned specifically to mine cryptocurrencies. It also requires space to house and cool these large, energy-sucking machines that run round the clock.

The mining market is dominated by large companies who secure large warehouse facilities to house their army of ASIC mining rigs. Some of these companies might run mining pools that smaller miners can contribute to in order to get a piece of some block rewards in exchange for a small fee.

Bitcoin Mining Pools

Due to the high cost and rising difficulty of mining Bitcoin, most miners today use something called a mining pool. Participating in mining pools is considered by many to be the only way for smaller miners to make any profit today, and even then it can be difficult to recoup the costs of equipment and electricity.

With a mining pool, individual miners pool their resources together with other miners, improving their chances of mining a block and earning the Bitcoin rewards. When a block gets mined, the rewards are then split up among the different miners in proportion to the amount of computing power (known as hashing power) they contributed.

Mining pool owners typically charge a fee for maintaining the pool. There are several different pools to choose from, each with their own structure.

Factors To Consider When Choosing a Mining Pool

After securing the Bitcoin mining equipment and electricity required for mining, a small miner will need to find a suitable mining pool. There are a few important factors to consider:

• Fees: Most, but not all, Bitcoin mining pools charge fees. The fees are taken from the reward payout and generally range from 0% to 4%.
• Pool size: The larger the pool, the more frequent the payment, as more hashing power equals more blocks being found. This also means that the payouts are smaller since rewards are shared between more people. On the flip side, smaller pools payout less frequently but in larger amounts.
• Security and reliability: Miners might want to find a mining pool that they can trust won’t steal users’ funds or get hacked. Joining established pools with long histories may help to reduce these risks.

How to Mine Bitcoin on Your Own

When Bitcoin was first created, the computer power required for Bitcoin mining was enough for the computer-processing unit (CPU) of an average laptop computer to handle.

Over time, the calculations have become more complex. Today, mining can mostly only be accomplished with advanced Application Specific Integrated Circuit (ASIC) machines, created specifically for mining Bitcoin.

And yet the hardware needs of Bitcoin mining is constantly evolving, as older machines become obsolete. An ASIC that was powerful enough to be profitable six months ago might not be able to produce enough coins to match the cost of electricity needed to run that same ASIC today. When this happens, miners must acquire new, more advanced hardware.

If you plan to try Bitcoin mining on your own, here are some things to consider when purchasing equipment:

• Equipment cost
• Electricity cost
• The time it will take to recoup equipment costs
• How BTC price fluctuations might impact profitability
• The frequency with which you will need to buy newer, more powerful machines and sell old ones

How Long Does it Take to Mine 1 Bitcoin in 2021?

The amount of time it takes to mine one whole bitcoin varies, and depends largely on the amount of hashing power a miner contributes. In general, the more hashing power, the faster a block will be solved, resulting in the miner reaping the block reward in the form of newly minted bitcoins.

Mining difficulty is another important variable. The lower the difficulty, the greater the odds of finding a new block.

When prices rise, this gives more people motivation to mine for coins. Then, as the Bitcoin hash rate increases due to more miners coming online, the difficulty adjustment (which happens every two weeks) tends to rise upward.

When prices fall, the opposite tends to happen, as the costs of bitcoin mining equipment and electricity rise in relation to the value of the coins being mined. As hashing power comes offline, the difficulty tends to adjust downward.

How Many Bitcoins Will Be Mined in 2021?

Currently, there are about 900 new bitcoins being mined every day. If this were to continue to be the case throughout all of 2021, then about 328,500 bitcoin could be mined this year.

The interesting thing to note is that more people mining Bitcoin does not lead to an increase in the number of coins being mined. The block reward is currently set at 6.25 (this will remain true until the next Bitcoin halving), and one block gets mined roughly every 10 minutes. Increased competition for blocks leads to a higher hash rate, but the number of new coins being minted remains the same.

Alternatives to Mining Bitcoin

For those who choose to undertake the cumbersome task of mining crypto, the best cryptocurrency to mine might be the one with the lowest difficulty and highest price.

Of course, these dynamics are in a constant state of flux, so the best cryptocurrency to mine today might not be the best one to mine tomorrow.

Historically, the only time altcoin miners have made significant profits has been when they were mining lesser-known, cheaper coins in the weeks and months before a large increase in prices, or an “alt season.” This has happened twice so far—once in 2017 and again in late 2020/early 2021.

Smaller altcoins tend to have lower difficulty, making it easier to mine more of them in a short amount of time.

Making significant investments in altcoin mining can be likened to buying a lottery ticket. The odds of success are slim, but the payoff could be sizable for a few fortunate individuals.

Is it Worth Mining Ethereum In 2021?

Some might say that mining Ether (ETH), the token that powers the Ethereum network, is worth it in 2021 because this might be the last year anyone can do so.

Recommended: Ethereum Investing 101: What is Ethereum and How Does It Work?

Ethereum developers are working on an upgrade to the network called “Ethereum 2.0.” This upgrade will change the consensus mechanism for Ethereum from proof-of-work to proof-of-stake. The first phase of the upgrade began in December 2020 and the final phases are planned for periods throughout 2021 and 2022.

While it’s still possible to mine ETH so long as the network uses proof-of-work, doing so will no longer be possible with proof-of-stake. Instead, only those who hold large quantities of ETH will be able to stake their tokens and become “validators.” Validators will have a chance at winning the next block rewards, with the highest odds going to those with the greatest amount of ETH staked.

The Takeaway

Anyone looking to make a side hustle out of Bitcoin mining is likely to be disappointed. The days of profitably mining crypto by oneself have long since come and gone, though other opportunities like mining pools are another way for individuals to get in on crypto mining.

But Bitcoin mining is not the only way for an investor to grow their crypto holdings. An easier way to build a crypto collection is by using SoFi Invest® crypto trading. Members can invest in crypto like Bitcoin, Ethereum, and Litecoin, knowing their crypto is kept secure from fraud and accessible for trading through the SoFi app.

Find out how to invest in crypto with SoFi Invest.


SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).

2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.

3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.

For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or pre-qualification for any loan product offered by SoFi Lending Corp and/or its affiliates.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments.
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sofis-crypto-guide-for-beginners

SoFi’s Crypto Guide for Beginners

February 6, 2021/2 Comments/in Cryptocurrency /by Jimmy Olsen

Curious about crypto? Since cryptocurrencies are volatile and involve a high degree of risk, it can be a good idea to do some research. Learn the basics with this crypto guide. #crypto #investing #money Curious about crypto? Since cryptocurrencies are volatile and involve a high degree of risk, it can be a good idea to do some research. Learn the basics with this crypto guide.

What is Cryptocurrency?

Cryptocurrency, often abbreviated to “crypto,” is any type of decentralized, digital currency that’s based on cryptography. IIf you want to understand cryptocurrencies for beginners, these three principles—decentralized, digital, and cryptography—are key.

Decentralized means that the currency isn’t issued by a central authority like a government or bank. The currency is instead possessed, exchanged, and governed by those who use it.

And it’s digital, meaning that crypto isn’t based on dollars or coins or gold. Instead, the currency is generated by a mathematical process done by a network of computers. This same network is then used to process and exchange the currency all around the world.

Cryptography refers to the mathematical and technical tools used to ensure that each unit of cryptocurrency is unique and can’t be copied. Cryptocurrency was designed to solve a problem in computer science: How to verify that a digital object is unique, and has not and can not be copied without using a central respiratory or databases. The technology used in cryptocurrencies, known as a distributed ledger, is based on cryptographic techniques. Cryptography is the field of communicating in codes that can be translated by two parties who are communicating with each other but are indiscernible from a third party. This matters for cryptocurrency because holders of it need a way of saying that the cryptocurrency they possess is uniquely theirs.

The “ledger” that records all Bitcoin and Bitcoin transactions is known as the “blockchain.” It was invented alongside Bitcoin as a decentralized way to transact with digital money. On the most basic level, it is the technology that enables Bitcoin to move about the Internet.

While different cryptocurrencies are based on different mathematical processes and have different user bases and networks which support them, they are all based on this principle. This guide to cryptocurrency is intended to be a resource for those just learning about crypto.

sofis-crypto-guide-for-beginners

What are the Different Types of Crypto?

Bitcoin

Bitcoin was created in 2009, making it the first and most widely-known cryptocurrency. It is a scarce asset issued under a predictable schedule, with the rate halving every four years until it stops at 21 million units. Bitcoin is held in digital wallets, which allow its owners to hold, access, and spend them. An increasing number of retailers are accepting bitcoin for their goods and services, but bitcoin transactions also happen on trading exchanges.

What is Bitcoin & How Does it Work? >

Bitcoin Cash

Bitcoin Cash was created in 2017 after some developers became frustrated with the slowdown of Bitcoin transactions (and subsequent higher fees) as Bitcoin’s 1-megabyte data blocks filled up. So they executed a hard fork on the Bitcoin blockchain and came up with Bitcoin Cash, which has a much larger block size of 8MB. For users, that means faster processing speeds and lower fees.

Difference Between Bitcoin & Bitcoin Cash? >

Ethereum

Ethereum is a computing platform that enables decentralized applications to be built. Its programming language is considered to be more flexible than earlier cryptocurrencies and allows transactions to occur in seconds. As opposed to relying on a central company to play gatekeeper and run applications, ethereum utilizes a system of “nodes”—computers and servers that are independently operated.

What is Ethereum? >

Litecoin

Litecoin is based on blockchain technology like Bitcoin, with its main distinction being a faster time to confirm transactions. While Bitcoin’s average confirmation time is around 10 minutes, Litecoin is roughly 2.5 minutes. Litecoin is sometimes considered the “silver” to Bitcoin’s “gold.”

What is Litecoin & How Does it Work? >

How to Invest in Cryptocurrency

To invest in Bitcoin or other cryptos you need to find a way to purchase it and hold it. You typically need to use a specialized cryptocurrency broker or exchange which can convert “fiat” (i.e. dollars or any other standard currency) into crypto and then also securely store your crypto in what’s known as a “wallet.”

But the “why” of crypto investing is just as important as the how.

One reason to think about investing in crypto is diversification. The theory of diversification holds that an investor can reduce the risk of their portfolio by investing in a variety of different assets, or a variety of securities within a certain asset class, or by increasing the number of assets or number of securities they’re investing in.

The oldest crypto, Bitcoin, is just over ten years old, meaning there isn’t much historical data to refer to compared to, say, the S&P 500. But crypto might still make sense to investors as an investment in a new technology or an asset that’s drawing intense interest both as a new way of conducting transactions online and as an investment product.

sofis-crypto-guide-for-beginners

Cryptocurrency Investing Rules and Regulations

While cryptocurrency has become much easier to buy and sell thanks to widespread interest in it from the general public, the cryptocurrency rules and regulations are less well established than they are for other types of assets or currencies like stocks or dollars.

The Securities and Exchange Commission (SEC), which regulates the trading of many financial assets, has basically split the cryptocurrency world into two. Bitcoin is a “payment mechanism and store of value,” i.e. not a “security,” which is the type of financial asset used to raise money for a company, like a stock or bond, and come under much more strict scrutiny from the SEC. Many “tokens,” cryptocurrencies issued by companies to fund or pre-fund a business project, do fall under the SEC’s definition of “security” and thus face much harsher and strict regulation.

But even if the SEC is not as interested in mainstream crypto, the Internal Revenue Service is. The IRS has detailed guidance on the tax implications of buying and selling Bitcoin and other cryptocurrencies that should be reviewed before investing in them.

Is Buying Crypto Safe?

One of the biggest concerns with cryptocurrency investing is safety and security. While designed on the principles of cryptography, cryptocurrency—especially in its early days—was beset by hacks and can be more tricky to manage than, say, a bank account.

To store crypto securely, an investor needs to use a crypto wallet, a software program for managing the assets. But even if you have software you trust, you will be relied on to store and remember and secure a password that only you know. This is frequently an issue with crypto, as people who forget their passwords essentially have had their assets stranded.

To get crypto into the wallet itself, investors need to use a crypto exchange. How crypto exchanges work is that they provide a platform for buying and selling crypto—either by exchanging one type of crypto for another, or, more typically, using fiat money to purchase or receiving fiat money for crypto you sell. Even as crypto exchanges grow in popularity and more sophisticated security systems are designed, hacks and instances of theft still continue to take place.

SoFi secures all crypto holdings from fraud or theft—so your holdings are protected.+

This article originally appeared on Sofi and republished with their approval.

+SoFi takes security seriously across all of the brand’s products. SoFi Invest uses a number of tools to secure crypto holdings against theft, including two-factor authentication, SSL encryption, partnering with trusted exchanges like Coinbase to complete transactions, and not sharing personal information about our members with crypto trading partners and custodians. Before you purchase crypto through SoFi Invest, it is important to understand the volatility of its value, and therefore its inherent risk. There is a minimum of $10 to buy or sell crypto. SoFi will apply a markup of up to 1.25% for each crypto transaction. For more information, visit SoFi.com/crypto.
This is not an offer, or solicitation of any offer to buy or sell any security, investment, or other product.
SoFi Invest® The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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Can We Finally Say Cryptocurrency is Over?

August 13, 2018/0 Comments/in Cryptocurrency /by Wallet Squirrel

I first heard of Bitcoin on June 17th, 2013 featured on the “How Stuff Works” Podcast. The podcast was great and they dived into what Bitcoin was, a bit about how blockchain worked and how if it caught on, it could vastly change the way we use currency.

I was intrigued, but I compared it to the trend in multiplayer games like World of Warcraft where people were gathering in-game coins in exchange for real money. It was only worth something while the game was popular.

I admit, I thought the idea was a bit ridiculous.

I could have bought Bitcoin at $100

When I first heard about Bitcoin in June 2013, the price was around $100 per coin.

That’s right, if I bought 10 bitcoins for $1,000 at the time and sold at their peak of $19,783 per coin in December, 2017. I would have now nearly $200,000.

Do I regret my decision? No

I regret nothing and still continue to hold zero coins of any kind. Would it be nice to have $200,000, absolutely, but assuming the entire world would accept a new currency is silly. Here’s why.

Why I never believed in Cryptocurrency

Nothings Hack Proof

Bitcoin which uses Blockchain to create an incredibly long receipt of user transactions. The longer the blockchain receipt, the harder it is to hack because it needs an extraordinary amount of processing power. So Bitcoin uses the longest receipt to verify who has how much Bitcoins because it’s assumed impossible to hack.

Well that’s not the only way to hack Bitcoins and other cryptocurrencies. In June 2018 the cryptocurrency exchange company Coinrail was hacked. The hackers stole 30% of the exchanges total cryptocurrency, or $35 million US dollars (source). Plus once that money is gone, it’s gone and nearly impossible to track unlike bank records. Oh, and it’s not insured by any goverment agency.

It’s not an isolated case. Japan’s Coincheck was hacked resulting in a crypto loss, South Korean Youbit was hacked twice requiring bankruptcy and others continue to be hacked (source). With no physical footprint, your money is just gone if hacked.

Let’s face it, we live in a hack-happy world. Each time an Exchange gets hacked (happens more than you think), the price of Cryptocurrencies lose major value. Yikes.

It skyrocketed due to media attention, now that’s gone

Bitcoin has literally zero real value. It’s only worth what we say it is.

That being said, in 2017 where it had one of its largest rises in price, Bitcoin thrived on all the media attention and the FOMO “Fear Of Missing Out”. Bitcoin has a finite supply of coins and everyone wanted one as the price rose.

However, that FOMO is gone and media attention has staggered. With the lack of these 2 qualities, Bitcoin’s price has tumbled from its $19,783 high to its current price of $6,363. It’s maintained a fluctuation of $8,000 – $6,000 through most of 2018.

Since Bitcoin is unregulated, no other influences will really affect the price. There may be a few spikes, but no quarterly reports or conference calls like a company or government agency, since it’s unregulated, will help the currency get anywhere back up as it used to be.

Bitcoin isn’t special, now a dime a dozen

The idea of Bitcoin was to be a central currency for everyone to use. However now there are well over 1,658 cryptocurrencies in existence (source). So 1,658 cryptocurrencies grabbing for our attention. Anything special about Bitcoin is now lost in a sea of other coins fighting for dominance and frankly, none of them are winning. It’s safer and easier to give up and forget about crypto.

Conclusion

Reports continue to come in of Bitcoin hacking, and the media attention & FOMO are gone while 1,658 other cryptocurrencies exist. Everything that made Bitcoin special is gone.

It’s over. If you’re holding out hope that your Bitcoin or other cryptocurrencies will make a dramatic comeback. It’s my opinion you’re wrong.

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/

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