Dear Happy Investor, by now everyone is known with the blockchain. From an investor perspective we should wonder why to invest in blockchain. The blockchain technology is very promising. However, it is still a very immature investing market. High risks and extreme volatility. Why should we want this if we can also choose for other, safer, investments? In this article we will explain the potential benefits of blockchain investing. We also explain how to invest in it.
What is Blockchain?
Blockchain is a revolutionary technology that enables the creation of decentralized, incorruptible databases. These databases are stored on multiple computers around the world and record every transaction that occurs in them.
As these transactions get validated by a consensus protocol, they become difficult to change or alter. This makes blockchain extremely secure and tamper-proof, which makes it an ideal technology for many applications ranging from currency exchange to electronic voting systems.
The main advantage of blockchain technology lies in its decentralized nature—there is no central server or authority that manages this database. Instead, multiple users maintain and control the entire database via various consensus protocols like proof-of-work (PoW) and proof-of-stake (PoS).
When anyone on the network wants to add a new block to the chain, all computers run mathematical algorithms and compete with one another to validate that block using PoW or PoS protocols.
Why should we invest in blockchain?
Blockchain technology has the potential to transform a wide range of industries in the coming years. Some of its most promising applications are in financial services with defi coins, supply chain management and healthcare, among others.
Here's why we should invest in blockchain now:
- It can streamline business processes and reduce costs. Blockchain technology is highly automated, which can help businesses save time and money by streamlining processes. For example, banks can use blockchain to streamline the process of processing loans and other financial transactions.
- It can improve security and mitigate fraud. Blockchain's decentralized ledger system makes it tamper-proof, which could help businesses prevent fraud. For instance, in the healthcare industry, blockchain could be used to secure patient records and prevent medical identity theft.
- It can create new opportunities for businesses. Blockchain's decentralized nature opens up new opportunities for businesses to interact with customers and partners in novel ways. For example, a business could use blockchain to create a loyalty program that rewards customers for their repeat business.
Overall, there are many compelling reasons to invest in blockchain technology today. Whether you're an individual investor or a business leader, understanding its potential benefits can help you make the most of this emerging opportunity.
However, the big question is how to invest in blockchain for long-term success. It is not yet proven to be a sustainable long-term investment. Investing in stocks, for example, has proven to generate 8 – 10% yearly average return. And advanced investors can even achieve much higher returns.
How to invest in blockchain
Many people are interested in investing in blockchain, but don't know how to get started. The good news is that there are a number of ways to invest in blockchain technology, and one of the easiest ways is through crypto brokers. Crypto brokers are websites that allow you to buy, sell, or trade cryptocurrencies. They act as middlemen between buyers and sellers and usually charge a small fee for their services.
If you're interested in investing in blockchain technology, then using a crypto broker is a great way to get started. Here's a step-by-step guide on how to use a crypto broker to invest in the blockchain. Note: crypto investing is not for beginners.
1. Choose a reputable broker
There are a number of different crypto brokers out there, so it's important to do your research before settling on one. Look for a broker that offers a variety of different cryptocurrencies, has a good reputation, and an easy-to-use interface.
2. Set up an account with the crypto broker
This is usually done through the website of the broker (although some brokers offer apps or mobile versions). You'll likely need to provide some personal information, such as your name and address, in order to create an account. Some websites may also require you to submit additional documentation in order to complete your registration process.
3. Deposit money into your account with the crypto broker
Most platforms accept payment via credit card or bank transfer, although there are also some that accept Bitcoin or other cryptocurrencies. Once you've deposited money into your account, you'll be able to use it to buy, sell, or trade cryptocurrencies.
An important thought is that a crypto currency stands for a crypto project. Like how a stock stands for a company. Therefore, select only the cryptoprojects with the most potential in the long run. It is not obvious to determine this, because important factual criteria such as fundamental analysis on profitability is not possible. This significantly increases the risk, as it tends towards speculation.
4. Start buying, selling, or trading cryptocurrencies
This is the fun part. Crypto brokers typically have an interface that allows you to buy, sell, or trade a variety of different cryptocurrencies. You can usually place orders to buy or sell at a specific price, or set up trades to exchange one cryptocurrency for another.
It is very important to determine your investing strategy in blockchain. There are different investing strategies. For example, you can choose short-term vs. long-term trading. Learn more about crypto trading strategies.
5. Withdraw your profits.
Once you've made some money from buying, selling, or trading cryptocurrencies, you'll want to withdraw it from your account with the crypto broker. Most brokers allow you to withdraw via bank transfer or credit card, although some may also offer cryptocurrency withdrawal.
If you invest in blockchain it is very important to take profits. It is an exciting yet high-risk market with extreme volatility. It is possible to lose significant amounts of money. Hence you should only invest with money you can afford to lose. Also, take profits and don’t become greedy.
That's it! These are the five simple steps that you need to follow in order to use a crypto broker to invest in blockchain technology.
Of course this is just the basic steps. Investing in blockchain successfully is a different story and needs more knowledge and skills.
What blockchain to invest in? 5 Coins with different angles
When it comes to choosing a blockchain to invest in, there is no one-size-fits-all answer. There are now hundreds of different blockchain projects emerging, each promising to revolutionize various industries. However, following five projects are making massive success in the current market. Let us explore one by one.
Note: As long-term investors, we prefer real estate and stocks. Crypto currencies can be interesting as a small addition. We prefer, because of the high risk, ideally to invest max. 5% in blockchain. Can you miss out on returns? Undoubtedly. But it prevents major misery if the crypto market collapses. Moreover, a small investment in high-risk assets can become worth a lot. This is called asymmetric investing as explained in our capitalist exploits review.
Bitcoin is a cryptocurrency and a payment system, first proposed by an anonymous person or group of people known as Satoshi Nakamoto in 2008. Bitcoin is decentralized, meaning it is not subject to government or financial institution control. Transactions are verified by a network of nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Bitcoin can be used to purchase goods and services online, or traded for other cryptocurrencies or traditional currencies. As of February 2015, over 100,000 merchants and vendors accepted bitcoin as payment. Bitcoin is often considered the first true cryptocurrency, and is also the largest in terms of market capitalization. Due to its popularity and wide adoption, it is often considered the gold standard for cryptocurrencies.
One of the leading PoW blockchain platforms, offering smart contract functionality and transaction speed that is unrivalled within the blockchain ecosystem. It provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes.
Ethereum also provides a cryptocurrency token called "ether", which can be transferred between accounts and used to compensate participant nodes for computations performed. The beauty of Ethereum lies in its ability to execute smart contracts. Smart contracts are essentially pieces of code that can be run on the Ethereum blockchain and executed automatically when certain conditions are met.
Cardano is a cryptocurrency built on its own unique "Ouroboros" consensus mechanism. With a strong focus on security, reliability, and scalability, Cardano has received praise from the crypto community and could be an interesting choice for those looking at long-term value growth potential over short-term gains.
Cardano was created by the team behind Input Output Hong Kong (IOHK), an engineering firm known for building cryptocurrencies with a focus on security and scalability. The Cardano project is led by Charles Hoskinson, who also co-founded Ethereum. In other words, there's a lot of experience behind this coin.
Another key feature of Cardano is its multi-layer architecture. This design allows for different layers of the network to be upgraded separately, which makes it more flexible and scalable than other cryptos with a single-layer design. For example, if the transaction processing layer needs to be upgraded, this can be done without affecting the other layers of the network.
While not as popular as other privacy coins, Zcash offers strong anonymity guarantees with zero-knowledge proofs that are built on top of a cryptographic protocol called zk-SNARKS or Zero-Knowledge Succinct Non-Interactive Argument of Knowledge. This allows users to verify transactions without revealing details about the sender, receiver, or transaction.
Monero is another popular privacy coin that uses CryptoNote to anonymize data. Since all transactions on the network are encrypted, it offers a high level of anonymity for users and has been adopted by the deep web’s dark markets like Alpha Bay. This makes it a good investment opportunity since its main use case has not yet been realized on mainstream cryptocurrency exchanges.
Read more about new crypto with potential.
What are your thoughts about investing in blockchain? Let us know in the comments below!