A classic story. Around the turn of the year 2017/18 – some time early January, I had some time and money left and didn’t know where to invest, got a tip, saw the Moon and invested in Cryptos.
1. Before investing my money, it would have been smarter to get some information on where I put my money and consider the possibility of a total loss!
2. Instead of being enthusiastic and naive I should’ve observed the market and invested only small amounts of money, preferably on a monthly basis, to balance the market fluctuations.
In order to invest in Crypto assets, you first have to register at a Crypto exchange (for example Coinbase), which exchanges traditional currencies (Euros, Dollars) to Cryptocurrencies (Bitcoin, Etherum).
Then to another one, that trades the assets you want (p.ex. Binance, where you can exchange Bitcoins to EOS for example). But that may change in the near future.
Considering my assets:
At least I only took assets with the biggest market cap, but I didn’t know exactly what I was buying there.
3. It makes sense to get sufficient information on the various Cryptocurrencies before making a purchase, there are some serious differences.
Then came the crash of Cryptos.
4. Watch out: what goes up, must come down…and vice versa.
But that was an experience I’d had before with my shares and the worst thing you can do in this situation is to realize the loss and to sell the assets.
So I kept them, of course so far and into the future. Meanwhile, there’s a term for this behavior on the scene: I’m a HODLER (hold on for dear life).
5. Conclusion: If possible, no losses realized by sales
Well, afterwards I got busy and learned about what I had invested in. According to my understanding, there are the “pure” Cryptocurrencies on one hand like Bitcoin and Litecoin and Monero – they are comparable to money.
On the other hand there are assets (tokens). Their value consists of a secure platform on the internet based on block chain technology, for example Etherum or EOS. It’s like an operating system (IOS / Windows), but decentralized and basis for decentralized applications (DAPPs).
From my point of view the key advantage and the positive development of DAPPs is due to the fact that because of decentralized data flow all the valuable information remains in the hands of transmitter and receiver and no longer goes to central providers such as Google, Facebook etc. where it might get analyzed and even misused.
I think an even more successful development of the block chain for the future is IOTA.
IOTA serves as a secure communication platform in the world of Internet-of-Things, which means that this project attracts the robot und automobile industry in particular, and calls for more efficient processes.
I’ve invested in all three fields (currencies, platform tokens and IOTA) and realized from the investment point of view that one field is particularly interesting: the platform tokens.
Here the idea is that the manufacturer of the DAPPs rewards investors (token holders) with so-called airdrops. I.e. when a new DAPP is released, the manufacturer distributes part of his tokens to the token holders of the respective platform.
You can compare this to a dividend in case of shares or to a kind of rent to the owner of a token platform share.
The DAPP token value is calculated according to the value of the respective application. As most DAPPs are still under development and not yet accepted by many people, the value is still low, but I think that can and will change – it´s only a matter of time.
6. My opinion: better to invest more diversely in future solutions, so the chances are higher for profitable investment if one of the solutions is successful.
7. Platform tokens are very interesting in my opinion, as the value of your investment increases automatically due to DAPP airdrops (dividends / rent).
In addition to the above you can also stake some tokens.
Here it is important to understand what buying platform tokens means: buying computing power, i.e. CPU, RAM and network bandwidth. You can make that CP available to others, for example programmers of DAPPs.
If you do that, staking is another form of income – in addition to the airdrops. However you have check carefully, how and on which platform to do it. This is like a business and it doesn’t work automatically.
My general view on the value of block chain and the Cryptos:
For all values in the range of block chain and Crypto assets it is mandatory that the majority of people sees a value in it. People do not necessarily have to understand the technology, but the products developed from the block chain have to be suitable for mass production and thus accepted.
In the industrial world that has been recognized already and solutions (IOT) have been developed. But in terms of Cryptocurrencies and DAPPs there’s still some development work to be done as well as efforts in marketing to be taken, aiming at introducing and explaining the opportunities, guarantees and benefits the block chain technology can provide.
Yet another point of view on the amount of time I’ve spent on the topic:
Attention! It is addictive! You might be trying to look at your cell phone all the time for news and current rates!
You may do that – but if the topic takes over and you keep focusing on it, other areas in your life will suffer as well as your environment. That’s nothing new, just like any other addiction – I just want to mention it.
The whole text is rather abstract and I would like to approach people who are not very technically experienced and thus encourage a mass adaption.
And: this is no financial advice, just a subjective review.