When I started researching how cryptocurrencies work, I realized that it was quite a long and different world for each coin. Learning how everything worked would take me time, and I wanted to start investing at that precise moment.
For that reason, I started with the most basic lesson: how can I lose money there.
You don’t lose money in the cryptocurrency market if you don’t sell your coins, buy in a suspicious place, or violate any security laws. You do not lose money in the stock market if you invest in solid companies and do not sell your stocks.
It sounds too easy to be true, right? Some of you will tell me that currencies or stocks are too volatile, and they can drop until the point you could have less than the 50% of your investment.
But as long as you have your coins or stocks in your account, the prices may change over time, but you will always have the same amount invested.
You can have 5 shares of Netflix that you bought at $400. If the share goes down to $5 or up to $1000, you will have the same 5 shares of Netflix.
And something that reading about the history of all investments over time has taught me is that eventually, the market always goes up.
The image above shows the S&P 500’s performance of the 500 biggest companies in the U.S. over the last 90 years. As you can see, even there are dips, the overall trend is that the market always goes up.
And the same happens with cryptocurrencies:
If you saw in 2018, buying a bitcoin at $ 19,000 would have been crazy. Currently, I would have liked to have made that decision even if it was at the highest price 3 years ago.
“The only way to devalue your money is by leaving it in a bank account. “
So you don’t have to know 100% how a stock or coin works to make money with it, as long as you know how you can lose money on that investment and create a good strategy to invest in without having to worry.
“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
One of the things that cost me more money was the daily trading and trying to get out of investment fast to take the profit.
It happened to me with the stock market when I decided to do daily trading from 9 am to 12 pm only with technical analysis and with cryptocurrency with Doge and Shiba when the hype was almost over.
And now I know I lost because you need specific skills, knowledge, and timing to make money in this way. If you will make it a daily strategy to make money fast, the only thing you will get is to lose everything.
You don’t need to get out of investment fast, so don’t do it.
There is not a formula to get rich quickly. Taking advantage of opportunities and doing it without the proper analysis is just gambling.
If you are consistent, you will stay in the game. But if you start making random decisions to get money quickly or based on speculations, then there is a big probability of fail.
“It’s virtually impossible for average investors to predict whether the market will go up or down in the short term.”
No matter what “coach” and “experts” say on the internet, no one ever knows when any stock or fund will hit be in the bottom or when it will rise. So if the only information we have for sure it’s that at one point it will raise again, the best thing we can do is take it to the long term.
My recommendations if you are going to start doing it is:
- Look for the shares and coins that have a good promise or a solid idea. If you are going to buy ghost companies or meme coins, make sure they are from reliable pages that you can maintain for a while and that it is money that you are not going to use at the moment.
- Use applications that allow you to hold without commissions and that the movements are cheap or free. The software I used to do daily stock trading had very high commissions if he didn’t sell before 5:00 pm, so I always had to make quick moves even if I was losing.
- Find a way to make more money with the stocks and currencies that you currently have if you are going to hold them for a while, so you can generate more money while you wait for your price.
I think one of the most overrated advice is “don’t put all your eggs in one basket.”
For me, the more investments I have the more I will have to learn and watch to the point where I don’t even know where and why I started investing in something.
Concentrating your investments decreases your overall risk because where you tend to be in trouble is if you have to watch 35 or 40 shares and coins.
If you start paying attention to one single investment, it has all your attention. You will learn how it works when it goes down, when it will rise, and when to invest.
“Put all your eggs in one basket and watch the basket carefully” — Mark Twain
The way I applied this advice was to read and research a specific company or currency and then start investing in it a small amount of my money monthly to the point where it leaves me a good amount of profit.
This has helped me understand how the investments I am making work and have the certainty that something is going to generate the desire profits.
The problem with buying when the market is “low” is that you never know when you are in the deep. So if it keeps going down you will be disappointed or angry that you didn’t wait any longer.
But investing is not about getting the best entry and exit; it is about being consistent enough so that no matter when you exit, you are winning.
So something that helped me a lot to earn money is to set a schedule for my investments. Every month on the same day I buy stocks and currencies no matter what price they are at.
This application helped me understand how much I could earn with a coin if I decided to buy a specific amount every month for a year:
According to the image above, if I had decided to buy $100 ADA every month without considering the price, now I would have $6662, 455.2% of my investment.
I am no longer stressed by the current price or having to wait for the “perfect moment” that will probably never come, and I’m sure it will pay off eventually.
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‘Overlooked’ Part of Senate Infrastructure Bill Renews Worries From Crypto Lobby
The $1 trillion infrastructure bill, which passed in the Senate in early August and is expected to be approved by the House, is the gift that keeps on giving.
At first, it was about roads, bridges, and clean water. Then a pay-for provision promised to give American crypto users new tax reporting requirements. And now there’s a new twist.
A report published today by the Proof of Stake Alliance (POSA), an advocacy group that counts Coinbase Custody and as members, details an “overlooked” amendment to the tax code within the 2,700-page bill that will make it a felony to incorrectly report receiving cryptocurrencies, , or other digital assets.
Writing in his role as an advisor to the POSA, law professor Abraham Sutherland details how the infrastructure bill amends Section 6050I of the tax code. The amended section 6045 that caused so much consternation when it made it through the Senate changed the definition of “broker” to cover those handling cryptocurrencies.
Industry lobbyists and cryptocurrency advocates such as the think tank Coin Center argued that the bill as written would force miners and validators on other networks to file 1099 forms for the people whose transactions they were processing—even though they lacked the personal information needed to do so.
Section 6050I, on the other hand, deals with the tax reporting requirements of those who ultimately receive the cryptocurrencies. While Americans must already report their crypto gains to the IRS just as they would with other investments, Sutherland says the amended provision goes much further: They must tell the government who sent it, including reporting social security numbers, when the value of the digital assets is more than $10,000. Not doing so within 15 days constitutes a felony.
This raises at least two issues. First, as Sutherland notes, it’s just as unwieldy as the section 6045 amendment: “This provision demands the impossible because the digital assets might not be ‘received’ from a person whose personally identifiable information can be verified and reported—including cases where the digital assets are not ‘received’ from a person or entity with a tax ID number, period.”
Second, as Sutherland alludes to and as Coin Center Research Director Peter Van Valkenburgh hammered home in a blog post, it might just be unconstitutional. The tax code currently mandates that people report such information to the IRS when they receive $10,000 in cash. That passes Constitutional muster because the bank acts as a third party; otherwise, authorities would need a warrant under the Fourth Amendment. But in cryptocurrency, a peer-to-peer transaction doesn’t have a third party.
Writes Van Valkenburgh: “One person to a two person transaction is obligated to collect a load of sensitive information from her counterparty and hand that to government officials without any warrant or reasonable suspicion of wrongdoing.”
Though he writes that Coin Center usually doesn’t “object to equal treatment of cash and cryptocurrencies,” in this case the “provision is a draconian surveillance rule that should have been ruled unconstitutional long ago. Extending it to cryptocurrency transactions would further erode the privacy of law-abiding Americans.”
Sutherland also calls into question the process by which the amended IRS code will become law—via a bill on completely unrelated topics. “A statute creating felony crimes for users of digital assets should be debated openly, not quietly inserted into a spending bill,” he wrote.
Avalanche (AVAX) bumps to near $70 after reveal of $230 million fundraise
High-speed blockchain Avalanche jumped to highs of $68.30 today after several influential crypto investors revealed the close of a private funding round involving $230 million worth of AVAX tokens in June, CryptoSlate learned in a release.
The Avalanche Foundation, a non-profit that oversees the development of the Avalanche blockchain, disclosed participants in the multimillion-dollar funding round were led by PolyChain Capital and Three Arrows Capital, and included R/Crypto Fund, Dragonfly, CMS Holdings, Collab+Currency, and Lvna Capital.
What a day! Just one of the many major initiatives the @AvaLabsOfficial team has been working on.
— Jay Kurahashi-Sofue 🔺 (@jayks17) September 16, 2021
What happens to Avalanche now?
Proceeds from the private sale will be used to support the burgeoning Avalanche ecosystem—one that has been positioned as a top contender against Ethereum for its high speed and low fees.
Part of the funds will be funneled to support DeFi (decentralized finance) projects on Avalanche as well as enterprise applications through grants, token purchases, and other forms of investments.
Avalanche’s smart contract is able to execute Ethereum Virtual Machine (EVM) contracts, making it possible for developers to ‘reuse’ their codebase if they have a working/testnet product on the Ethereum blockchain.
Converting assets on-chain using a ‘bridge’—a way for two separate blockchain to communicate with and transfer value between each other—are also simple as applications querying the Ethereum network can be adapted to support Avalanche by changing API endpoints and adding support for a new network.
Meanwhile, the news caused a surge in AVAX prices last night. The token jumped 30% to over $68.30 to set a new all-time high, reaching a $14 billion marketcap and becoming the 12th-most-valuable cryptocurrency by that metric.
At press time, AVAX continues to trade above its 34-period exponential moving average, a metric used by traders that determines asset trends using historic prices. It has been been in a gradual uptrend since breaking the $15 mark in late-July, and has returned several multiples to investors in the past three months alone.
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Can NFTs impact the economic livelihood of artists in developing nations?
- Aversano deployed the first NFT portrait photography.
- The total sales volume of NFTs in the art segment rose from $64 million to $774 million.
- NFTs ensure an artist is paid royalty whenever their art is used.
Aversano, an artist known for deploying the first-ever NFT portrait photography, says he sold more than 100 NFT portraits between February and June. He said the sales earned approximately $130,000 within five months. The Twin collection in which he sold the 100 portraits are photographs of twins, which he says are in memory of his fraternal twin.
What are NFTs?
NFTs are non-fungible tokens which are real-life assets that are sold on digital platforms. The viability of NFTs depends on the uniqueness and the utility of possession. This means that tokens can only be relevant to an owner if he can prove ownership of the token. The tokens can range from unique pieces of art from artists to current assets like cars. The digital platform gives an easy and availed proof of ownership.
Non-fugitive assets are made more desirable by the fact that they are unique and one of a kind. This makes them very valuable.
According to Statista, the total sales volume of NFTs in the art segment rose from $64 million to $774 million within a record period of 30-days (August 15 – September 15, 2021). The chart below shows the fluctuation of NFT sales per 30-days period between April and August.
How can NFTs make artists’ lives better?
As the digital world takes significant steps ahead, more investors try to get a niche to explore the same fruits. When Jack Dorsey sold his first tweet at $2.9m, it started a buzz on and around NFTs. Not only for the amount of money fetched but the ‘absurdity’ of buying a tweet when there are millions of them already. However, there is much more to it. It brought about the concept of owning a one-of-a-kind piece of art which for sure is an advantage to artists.
First, NFTs guarantee immutability to the artist. There is uniqueness where the artist has complete copyrights on his art. This is enabled by the ID or metadata issued to an artist to prove possession of the art. It is offered to give essential data about the piece of art.
Second, there are no intermediaries during the trading of art on cryptocurrency platforms. Once there is an interested party, they are connected to the individual artist who lays out the asset’s guidelines to change possession. This is advantageous to the artist since transactions are done on his terms. It also keeps in place his profile and reputation as an artist. The artist also cuts the marketing cost and the issue of art brokers.
Next, there is exposure for the artist. When trading NFTs, artists are at ease to do collaborations with other artists. This is a guarantee as the platform is a haven where artists can interact and flourish while teaming up with even more significant expertise in different fields. Apart from collaborations, there is a world market availed. Geographical borders or any particular divisions do not limit the crypto platforms. Once an artist avails art on a digital platform, the piece is available for everybody.
One other factor pulling artists to NFTs is smart contracts. This is a feature that keeps a contract in code form. It works best for decentralized platforms. Smart contracts are programmed to suit an investor’s interest in trade.
For example, smart contracts can be used by artists dealing with NFTs to store data or be used to get royalties each time the piece of art changes possession. This means that the artist keeps reaping from the art long after the sale. A smart contract can be programmed to work without involving a party to set it up time and again.
On the other hand, since the buzz around NFTs began, more people are trying to get into the trade in an attempt of minting. This is leading to flooding in the market and the uniqueness of NFTs diluting. However, this is not a guarantee for the near future failure of NFTs. Artists can reap much from the NFTs.
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