It’s 2019. Cryptocurrency is becoming more and more mainstream, and the markets are rebounding. With this, there is a whole wave of fresh new investors coming into the crypto sector. Many of us forget what it was like coming into crytpo investing for the first time. This new mix of investors will contain experienced investors from other avenues, and people who have never invested a single dime. Some are interested in blockchain technology, and some have heard the stories of Lambos and 18 year old millionaires. “Kids” (in their eyes) who got rich overnight.

Because of this, I decided to put out a blog to go over the basics, and give a little bit of guidance. Some of this might seem basic, or like common sense to the experienced investors. But I want to cast a wide net to make sure I’m covering the needs of the many. If you already know the 101’s you can skip to the setup and investing section.

Bitcoin price 2017

Don’t Invest Money You Need

Never invest money you need right now, or can’t afford to lose! I’ll say this again. Never invest money you need right now, or can’t afford to lose! I know this should go without saying, but I see it all the time. “I really need this to pay my bills this month”, or something similar, is common chat in many of the telegram rooms. This comes about because people who have never invested jumped into Cryptocurrency after hearing stories of 1000% gains in a month. All investments carry a risk, and nothing is guaranteed. Investments also take time to mature. If you’re investing in an ICO, or a new project, you probably will not be able to sell immediately. The project will need time to develop, gain exposure and liquidity. Have patience, and understand the risk.

Support Your Crypto Projects

I see it time and time again. People invest their hard earned money into a project and when it doesn’t launch on their schedule, they start bashing the project. By doing this you are literally devaluing your own investment. Often times this is caused by someone who should have read the paragraph above. They were looking for a quick buck. They didn’t take time to read the whitepaper. Or they didn’t understand the status of the project before investing. They FOMO’d in, and are disappointed that the project is not yet at a place for them to exit. BTW, FOMO means (Fear Of Missing Out). So they start saying scam. You can read my definition of a scam in this article. If you invested in the project, you should want it to succeed. Therefore you should be an advocate.

Take this site for example.

UPDC didn’t ask me to put together a website about their project. They don’t direct me on what to write. And they don’t compensate me when I release an article. I put this together because I believe in the project, and I want to spread the word. Now you don’t need to put together a site, or make a video. But there are ways we can all advocate for the projects we invest in. Simply not bashing, or spreading FUD is a good start. For those that don’t know, FUD means (Fear Uncertainty and Doubt). FUD is spread around as fact in many crypto communities.

Read the Whitepaper

I can’t stress this enough. If you are interested in a project you should read the whitepaper before investing. And I mean really read it and understand the project. As someone who has spent a lot of time reviewing crypto projects, I’ve read hundreds of whitepapers. There are a lot of whitepapers that are nonsensical information. They try tricks like dumping a bunch of highly technical stuff in them, that most people wouldn’t even start to understand. A good whitepaper should lay out (in easy to understand language) what the project is about. The concept, the status, and the plan. You shouldn’t need a PHD to understand a whitepaper. An example of a great whitepaper is this one from UPDC. It is easy to understand, and you should be able to understand what you are investing in. Know your investment before you make your investment!

Now Let’s Talk About Investing in Cryptocurrency

Bitcoin (BTC) is generally your first crypto. Bitcoin (for the time being) is what drives the crypto markets as a whole. The market tides rise and fall with Bitcoin. And Bitcoin is what most (altcoins) are paired against. Meaning, in many cases you need to buy Bitcoin and use that Bitcoin to buy other coins/tokens. This is starting to change, and it is easier to buy some other cryptos with Fiat. The easiest way to enter the crypto market (especially in America) is through Coinbase.

Crypto Investing 101 - Coinbase
Crypto Investing 101 – Coinbase

A couple years ago Coinbase only offered Bitcoin and Ethereum (ETH). However over the last 1.5 years Coinbase has added more cryptocurrencies, which you can buy with Fiat (the money in your bank). At the time of this post you can now buy 14 different Cryptocurrencies on Coinbase.

Cryptocurrencies on Coinbase
Cryptocurrencies on Coinbase

You Don’t Have to Buy a Full Bitcoin!

This is something which confuses some traditional investors. I’ve heard, “I don’t have $8,000 (current price) to buy a Bitcoin”. You can buy any amount of Bitcoin (provided you cover the fees). Well technically you have to buy at least one Satoshi. The satoshi is currently the smallest unit of the bitcoin currency recorded on the block chain. It is a one hundred millionth of a single bitcoin (0.00000001 BTC). The unit has been named in collective homage to the original creator of Bitcoin, Satoshi Nakamoto.

That means you can buy $10, $50, or even $291.95 in Bitcoin; and you will own whatever fraction that comes out to be. This same rule applies with all crypto. Once you buy a cryptocurrency, it will be held in a Wallet.

There are 5 types of Crypto Wallets.

They are: Web Wallets (Coinbase and other Exchanges), Hardware Wallets, Paper Wallets, Mobile Wallets, and Desktop Wallets. This is a good article describing the types of wallets. If you buy on an exchange your Crypto is on a web wallet until you move it to a different wallet. A word of advice. If you are holding large amounts of Crypto, and are not actively trading it, I would advise moving your crypto off of the web. Hardware and Paper wallets are the safest places to store your crypto (if you’re not looking to use your crypto anytime soon).

There are some exceptions. For example, UPDC holds their tokens on their exchange. They are safe, and in the event of a major hack they have safeguards in place which makes your crypto safe. The team has told me that there are plans in the future to open this up, but that is a ways away. Liquidity has to come first. Crypto Wallets (excluding exchanges) have a Private Key, and a Public Key. Exchanges give you your public key. NEVER GIVE OUT YOUR PRIVATE KEYS! The public key is the address you have people (or yourself) send whatever cryptocurrency to.The Private Key is for you to access the wallet. If you give out your private key, that person can take your Crypto. And there is no recourse. If you lose your private keys, you will likely be unable to access your crypto. Just Google “Lost Bitcoin Private Keys”.

Ok You Have Bitcoin, and Want to Buy a Different Cryptocurrency

If you have found a Crypto project that you are interested in, you will need to see what it’s paired with and where you can buy it. This will tell you what cryptocurrency you should buy in order to purchase the coin/token that you are interested in. For example. If I wanted to buy UPDC on their exchange. I would need to buy Bitcoin, transfer that to the UpStake Exchange, and buy UPDC with my Bitcoin. At least for the time being, there are plans to pair against 4 – 5 cryptocurrencies in the near future. You would go through a similar process if you wanted to buy Tron in order to Gamble on the upcoming Moolah Gambling dApp. In this case, you would need to buy Bitcoin on something like Coinbase. You would then need to open an account on a separate exchange which pairs with the Tron (TRX) token.

I’d recommend Binance for this! Binance is the largest crypto exchange in the world. You would transfer your bitcoin (BTC) to your Binance bitcoin public wallet address, and then execute a trade against the Bitcoin/Tron pair. And now you own Tron (TRX).

Binance - Tron Pair

There are real world applications for Cryptocurrency outside of just investing. Some can be used as payment for items. Some can be used for entertainment. For example, you’ll be able to Gamble with Tron (TRX) on the Moolah Crypto Gambling dApp (by UPDC). And other crypto is used as a utility for a dApp (Decentralized Application). A DApp has its backend code running on a decentralized peer-to-peer network. It’s important to understand what the project you are investing in does.

I hope this article has helped you understand the Basics of Investing in Cryptocurrency. You can see the basic resources for Crypto Investing on my Cryptocurrency Tools page.

First, let’s start out with a simple definition of what a Store of Value is…

What is a Store Of Value

A store of value is an asset that maintains its value without depreciating. Gold and other metals are good stores of value as their shelf lives are essentially perpetual, whereas a perishable good is a poor store of value due to its propensity to decay. Interest-bearing assets, such as U.S. Treasury bonds (T-bonds), are very good stores of value because they generate interest income and their principal balances are backed by legal contracts. Other stores of value, such as, real estate and fine art, have proved their consistency over time. 

Bitcoin as a Store of Value

There are multiple arguments both for, and against, Bitcoin being a Store of Value. Many “traditionalist” argue against Bitcoin as a Store of Value. Due to it’s volatility. Or that it’s “not real”. However, there are arguments the other way. There is a good article titled “What Gold’s History Teaches Us About Bitcoin As A Store Of Value” that you should read.

Now Let’s Talk About UPDC as a Store of Value

If you look at UP Digital Currency, or the UPDC Token, you’ll notice some very promising arguments for UPDC becoming a legitimate Store of Value. Possibly even more so than Bitcoin (BTC). First, it doesn’t depreciate. Because of the way that the UPDC token works, it is protected against the the volatility of the market. People can’t short it, or manipulate the price. It increases at a fixed, and steady rate. All of which is well defined, and documented in their whitepaper.

UPDC Price Schedule

Furthermore, there is a limited supply which slowly diminishes over time through the process of “burning tokens” at the point of transaction. The more transactions that take place, the faster UPDC tokens are burned out of circulation. As the tokens gain utility through the ecosystem, the velocity of use will result in improved liquidity.

What is the Token Burn Mechanism?

Tokens are burnt from the supply on the execution of token burn function via the UPDC smart contract. Currently, a UPDC token burn event occurs in the following situations. With the possibility of more scenarios as future projects are released.

  • 1% of the tokens sold are burnt on the execution of a successful exchange transaction (exchange version 1.0).
  • 90% of the tokens that it took to create the Edge is burnt when the edge is created/purchased with UPDC.
  • 10% of the daily dividend pool on all UPDC tokens that are wagered through once live.
Interest or Dividend Income

One of the examples above listed Treasury Bonds as a good Store of Value because of the interest payments. In much the same way, UPDC will payout a form of a dividend through the process of staking. More on that in a later post about and other future projects.

But What About Liquidity?

Since we’ve covered the fact that UP Digital Currency (UPDC) can’t depreciate in value. There will be people who will argue that the current lack of liquidity means that UPDC can’t be counted as a Store of Value. Now, this could be a valid argument in the current environment. But it doesn’t necessarily remove UPDC as a Store of Value, even in it’s current state. Reviewing other assets which are considered Stores of Value like real estate, fine art, collectibles, and even livestock (in some cases). You’ll see that those listed items are not always easy to sell. While these items may be inconvenient to trade daily or store, and may vary in value quite significantly, they rarely lose all value. So, this basically throws the liquidity argument out the window. And, in my opinion, only strengthens the case of UPDC being a Store of Value.

My Conclusion

UPDC is still in it’s early stage, and reminds me of Bitcoin (BTC) back in it’s early days. Don’t we all wish we picked up 10,000 BTC when it was worth about $0.01, and it was hard to use/sell! Unlike Bitcoin, UP Digital Currency can’t go down in price. The only risk to UPDC is liquidity. However, you can still sell it, and the company will be releasing Exchange 2.0 in a few months which will make this process much easier. All this combined makes me quite excited to be an early adopter of UPDC. I get to sit back and watch the project mature, and my holdings increase in value.

Buying UPDC Tokens

If you are interested in researching, or purchasing, UPDC you should go to their website to learn more about the project. Remember to ALWAYS research any investment before purchasing. You should read the whitepaper, and make sure you are comfortable with your decision.

All investments carry risk, and you should never invest money that you can’t afford to lose.