Cryptocurrency: Why I Started and Where It’s Headed

The Basics of Cryptocurrency

Cryptocurrency in its basic form is a decentralized unit of currency that seeks to solve an issue or problem. This is done so in a manner that requires no central authority but relies on a team of individuals to manage the network. There is more nuance to the idea of a cryptocurrency recently. Especially as altcoins move away from decentralization and provide more centralized forms of minting or network management.

I gained most of my knowledge of cryptocurrency from my curiosity in technology and learning how a blockchain operates. There’s a lot of information on how the blockchain works on the internet. You can gather information through YouTube videos, Wikipedia articles, social media, discord channels, etc. Understanding the technology behind Bitcoin is essential to being able to discern between legitimate projects and projects that provide no real value to the cryptocurrency ecosystem. Along with this, I have taken courses online to gain a deeper understanding of the network and how it operates. I have learned a lot over the past 4 years through simple trial and error.

Getting Started with Cryptocurrency

Getting started in Crypto is easier nowadays than ever. With markets like Coinbase allowing direct investment into crypto via debit or bank transactions, it’s a good opportunity for retail investors to buy and hold cryptocurrency on an exchange. This will allow them to become more involved and interested in the projects. Then, you will begin to understand more of the network and coin offerings out there. This will make you better able to diversify your investments and use decentralized exchanges to explore the more niche coins available.

Once you have established a good amount of cryptocurrency and understand the networks, you’ll rarely have to cash out into USD. This means that you are basically working from within a cryptocurrency ecosystem. I believe that this is where your understanding and worldview opens up. You will begin to have a deeper understanding of the systems and projects behind these tokens.

The amount of time that I invest into the markets depends on how quickly the market is evolving. When I hold a long-term position on it, I prefer to spend less time on the project as I believe it will be successful. Therefore, I’m less worried about the day-to-day price movements. If I’m taking a short-term position, I will tend to monitor developments in the market with more scrutiny. Overall, I like to keep my finger on the pulse of the market without spending too much time looking at charts or news articles.

Types of Cryptocurrency to Invest In

Currently, I am investing heavily in AEC coins such as Monero. I think it’s one of the most undervalued cryptocurrencies. The public perception of Bitcoin is shifting away from being a pseudo-anonymous coin to the reality of a public ledger closely monitored and controlled by large mining farms. Along with this, I have positions in Bitcoin, Dogecoin, Ripple, Labra, and Ethereum.

DOGE is an interesting experiment in the power of social media and is a good introductory point to cryptocurrencies. I’m curious to see what the reaction will be from the greater public. Especially as people become more aware of the volatility of the crypto market. However, anything is possible for the future of DOGECOIN, as we are in unchartered territory. ETH is also a coin that provides real-world value and use-case through decentralized apps and smart contracts. Once the network is upgraded and the high gas fee issue is solved, it will prove to be one of the most valuable coins on the market.

My personal return on investing in these cryptocurrencies has been around 1.7M in the past year. I’m continuing to hold as I still believe the market will experience exponential growth moving forward. The majority of those earnings have been from Dogecoin, Ethereum, Ripple, and Bitcoin, as well as a few short-term “experiments” in Safemoon and ElonGate.

Cybersecurity Concerns With Cryptocurrency

Cybersecurity concerns are always important whenever you are dealing with any type of technological system. Even at a personal level, I think you should have some understanding of the basic tenets of cybersecurity. This is important as you will need to protect your private keys at all times to prevent crypto theft.

Overall, cybersecurity depends on your threat model and what you can do to negate any attacks. If you are simply buying and holding coins, then you will have a much different threat compared to someone who is operating in an environment where cryptocurrency is illegal or frowned upon. There is always the possibility of a bug in the blockchain, however, this is unlikely. The fact that Bitcoin has been around for 10-11 years with no serious vulnerabilities is a good sign that the network is solid.

Altcoin Markets

I believe that the recent price movements to certain altcoins are related to speculation and social media. However, this is confined to the crypto market considering the recent activity within the stock market. Saying that it is “unwarranted” is sticking your head in the sand and ignoring the driving force behind this speculation. I cannot make a prediction on the price of any market currently, as there were many people calling for a correction in all markets in 2018/2019. Nevertheless, the music continued and people would have missed out on serious gains if they liquidated their positions back then.

I would not classify altcoin markets as overbought at this time. While there is a significant amount of market share in Bitcoin, the overall public knowledge of cryptocurrency continues to grow. I believe that people are starting to realize that crypto does not start and end with Bitcoin. Many issues within the Bitcoin network commonly solved with altcoins. Naturally, investing in a cryptocurrency you believe in is important, especially for long-term holds.

Final Thoughts 

My current hot take on cryptocurrency is that if you’re looking for a long-term investment in crypto other than Bitcoin, then Monero is worth looking into. Monero solves a lot of issues from the Bitcoin network such as high transaction fees, centralization of the network with ASIC miners, and the public blockchain. Monero is at the place that Bitcoin was at 5 years ago. It will continue to grow as people realize the value of the coin. It is also currently used as a currency online which will continue to increase its demand.

Signing off,

Brennan Balzi