What is Cryptocurrency?
Today the blockchain is emerging as the next technology that will truly change our world. Companies are appearing daily with business models to provide blockchain related services to the world or to specific industrial or service sectors. Many of these companies also create their own cryptocurrency. Some use this ICO (initial coin offering) to fund their startup, for some the coin is a part of their business model and intended to be used for future exchange and for some (the majority) it’s used to buy Ferraris and new houses on the beach. Many ICOs are money grabbing schemes with no utility.
Rather than jumping right in with coin/company reviews, we want to ensure that if you are new, we do our best to help you get involved and not robbed. Our goal is to lessen your fears as much as possible. For seasoned investors, much of this may be boring. It is important to us that everyone understands that all investments carry risk. Crypto can change your life, and the world you live in for the better. It can make you rich beyond your dreams. It cannot cost you everything unless you risk everything. You control your downside. For those who get into Crypto thru an ICO the likelihood you could lose your money is far higher than if you invest in one of the premier coins like Bitcoin or Litecoin. We will be reviewing and rating coins here that some of you may invest in. Getting in on the ground floor is an awesome opportunity with ICOs since the discounts available give near-instant gains. (Bitcoin was $.0012 initially, and is now $15000ish, imagine if you spent $10 on their ICO? You'd be set for life. It’s important that you understand the basics if you are going to put savings at risk, and weeding through these ICOs is necessary to be able to make the smartest-possible investment.
There are approximately 15-million current Crypto investors worldwide. Very few of us fully understand the space. If you meet anyone who tells you that they do, run like hell. For the new investor in Crypto, the rules and hazards can be downright overwhelming and terrifying. How do I buy it? How do I store it? How do I sell it? Are there taxes? Am I too late? And above all, who do I trust? We will try to answer these questions for you.
Crypto has enormous upside. Technology and innovation evolve in stages. If we use the 1-10 scale as a benchmark, then Crypto/Blockchain is still in the middle of phase 1, not the end of 7. I spend much of my time begging my dearest friends to invest. Those who have invested recently have seen their money double our more.
The Big Crypto Currencies like BTC, LTC, ETH, XRP, etc. represent relatively safe havens for beginners and experienced investors alike. Think of them like the DOW industrials of Crypto. This is where most folks buy-in and where the majority of my money is. Ease of access is probably the number one reason this is so. Anyone can open a Coinbase account and begin buying crypto with absolutely zero understanding of Blockchain technology, or what is or isn’t a reasonable investment. No prerequisite of understanding is both, the pot of gold at the end of the rainbow and the quicksand in Crypto.
There are two basic ways to make money in Crypto. Buy and hold. Buy quality coins. Put them away and forget about them. Or you can trade. Many people come to Crypto to buy and hold. They recognize the volatility and opportunity. They begin selling high and re-buying low. There can be more to it than this, but in its most basic form, this is trading. There is a third way, and that involves the utility behind some of these coins as well. They may give you a discount at your dentist, or allow for a faster internet connection for FREE while you hold the token.
Once you enter the Crypto trading world you will find numerous exchanges for buying and selling. You might quickly educate yourself and become a full trader, setting limit sales and making hundreds of dollars each day trading a moderate portfolio. If you want to learn and understand Crypto and Blockchain so you can find the one coin that will go from $.01 to $1,000 and make a $100 investment into $10,000,000 then you will need to learn to evaluate ICOs. Do not start buying ICOs because some guy your cousin knows did and now lives on an Island. The odds of throwing a dart at the ICO gameboard and hitting an ICO winner is about the same as hitting the lottery. Having said that, there are ways to pick winners. That is why we are here. As we move forward we will be applying standard tests of new and existing Cryptos and the companies that issue them.
If you trade you will find that many exchanges will handle the majority of common coins. None will provide you access to all of the 3000 current coins, and those being released daily. If you want to get some idea of the size of Crypto go to www.coinmarketcap.com where you can see the top 2000 coins and all stats about them, just not quite as transparent as we'd like. Here, transaperency is key to finding a worthwhile investment!
If you are going to trade you will discover that you need accounts on several exchanges to get into the action. You may have to buy one coin on one exchange and use another exchange to buy another coin to move to a third exchange to get the coin you want. (Sounds tricky, right?)
An example of “hard to get” is Ripple. (XRP) Ripple has the second largest Crypto market cap, but can be damn near impossible for the beginner to buy. When buying, remember that as it goes mainstream this coin will run as high as $20 or more in 2018. Ripple is supposed to be listed on Coinbase soon, which will give easy access to everyone. This listing will raise the price, and combined with the utility and real-world use of the coin - makes it one of our favorites.
If you buy Ripple, you basically have two choices for storage, an exchange or a wallet. Ripple wallets generally suck. (Toast wallet decides when it wants to send or receive.) Exchanges are not secure because you do not have your Keys. (backup and secret word recovery phrase) If the exchange loses your money in a hack or rogue agent attack, it’s lost for good. If however you have your coin in a wallet on your phone and you have your keys and you’ve backed up your wallet you can recover your money. I’m going thru a dispute with an exchange right now for this exact reason: Trust me, nobody wants to give you your money back.
Remember, with crypto you do not have physical money. You have a digital representation of a coin stored at an address on the blockchain where the record of your money lives forever. Lose the address and you lose the address to your money. So save your keys. Also, if you don’t use a password on your phone, you should start now. Set your phone to auto lock at 10 seconds. If someone gets into your phone they can transfer all your money in seconds. Use the password option on every wallet you have. Encrypt them, save that file on a thumbdrive and put it in a safety deposit box. Use a VPN for your internet connection, and in a perfect world: Buy a Trezor or Ledger wallet - which are thumbdrive-like tools which let you store your coin safely and encrypt it for you.
Many of us keep the majority of our token/s in our own wallets and transfer it into exchanges to make trades. I have several wallets on my phone and laptop, as well as hard wallets in a safe deposit box. Nothing is safer than a hard wallet. (Trezor, Ledger Nano S) Generally, after I make trades I move my money out again. Yes, you will incur transfer fees, but your money is safer. I personally never send large amounts of coin in single transactions. I will send 1/10 of a bitcoin to ensure the transfer speeds and that everything is working. Then I’ll send the balance in one or more transactions.
There are wallets for everything. Some handle all the Ethereum based coins and some handle just one or two coins. Wallets for XRP (ripple) are inherently problematic. The safest storage is a hard wallet that supports XRP. The Nano S is my favorite. While there are dozens of wallets to store Bitcoin, there are only a couple for the second largest Crypto coin, XRP. And for my money Ripple/XRP may emerge as the US dollar’s digital equivalent. But that’s for later.
You will also hear the terms White paper and ICO a lot. A white paper is like a Stock prospectus. It’s a written explanation of the company, how it’s structured, how it intends to operate, what services and products it will supply, how it will make money, how the cryptocurrency will work, the market the company intends to service and the technology. The tech is exceedingly hard to understand unless it’s what you do. Understanding the business model is just half the story. In my experience, the more techie the white paper is, the more likely it’s total bullshit. We will be providing some great examples of the good, the bad and the ugly in the coming days.
Beware of the ICO
An ICO happens when the new company begins selling or releasing coin to the market. If you are going to find that penny to a million dollar crypto you will need to learn to pick the crumbs from the bums. You will need to read White Papers. You will need to read lots of white papers and understand reviews like this: (http://syscoin.org/whitepaper.pdf)
Don’t get caught in the “I have to have it” frenzy and buy disaster simply so you can buy something. I recently read a white paper where the owners told everyone in clear English that if you bought the coin they had no obligation to you, that the coin was not tied in any way to the success of the company, it did not represent any claim on the company or its owners, and whether or not the owners shared with the coin holders was entirely their choice, and that they could issue another coin any time they chose to. And people still bought it.
Something that we notice here, is that the majority of legitimate companies will give away FREE coins to new adopters whether you plan to investin their ICO or not. The reason is simple, creating a demand for their supply. If a company is willing to give you $1-100,000 (Yes, we've gotten $100,000 for free.) then chances are they pass the legitimacy test.There are people who claim Crypto is a bubble. The real currencies have logical stories, great models, existing tech and markets, proven need and mass utility. Sadly, for every good one, there are hundreds of scams.
Crypto is not a bubble. But it can be a self-inflicted wound. If you buy into these money grabs you are not merely setting yourself up for disaster, you are making the scams possible and ensuring that more will follow. And every time people have cheated it feeds the narrative of Crypto’s detractors. Spend the time to find sound investments and you will have few regrets, but will walk away much more informed and will 'get an eye' for the positive utility versus the bull.
There are some rules to Crypto and trading. The Blockchain is the most secure technology ever created by man. It’s safer than burying a can in your backyard. After all, CRYPTO comes from the word CRYPTOGRAPHY: crypto is how we ended World War 2. That same tech has spawned the biggest cryptocurrencies. Cryptocurrency is not like a bank, which protects your money. The Blockchain requires that you be responsible for your money and security. If you do everything by the rules you have zero fears. If you break them, don’t be surprised if you wake up one day and its all gone.
Please read our piece on taxes for a start. Do not keep large quantities of coin on an exchange. Keep your coins in a wallet and transfer what you want to trade to an exchange: if you even want to trade. Do not use a wallet that doesn’t give you your public/private key and/or recovery words. Always Always ALWAYS write your secret security words on a piece of paper. Do not screenshot them Do not keep them in a file on any device. This is the part of crypto that goes back to crypto basics. Don't write something down where a middleman can get his hands on it.
Our system and why we created it:
As you look to enter the exciting Crypto investment world, you must make informed decisions. Can you figure this out by yourself? In many cases, the answer is yes, much of it. Remember, use common sense. If it looks like a duck and quacks like a duck it may not be a duck, but no one is going to fault you for thinking it’s a duck. Some coins are not scams but fail anyway for business reasons. Some scams are perfectly written, perfectly played and may fool everyone. But in Crypto if it has all the signs of a scam it is a scam and you may pay a horrible price for thinking its an eagle and not a duck.
The majority of coins/tokens that are scams are actually pretty obvious if you read the White Papers. Always read the White paper of any coin you are thinking of buying. Some of them are so blatantly schemes that you should run away laughing. One of the problems today with Crypto is peer pressure. Your best friend bought a coin because his friend made a bunch of money on it and he/she is sharing the great opportunity with you. This happens with newbies as well as to people that have been in Crypto for a while. Not here. You may come to us with a coin that’s gone from $.01 to $3.00 in 4 months. Rest assured we will put that coin thru the same review that we put any ICO thru.
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