NOWADAYS, most of the people are engaged in cryptocurrency trading. There’s nothing wrong in investing as long as you know the risk it will take.
As I wrote my introductory article, it is important to remember that before we start investing, we need to first know the basics of finance. Many of us skip this important step. Skipping the fundamental steps may affect your investment accounts.
Basic foundation in finance is simply like building your house on a solid foundation so whatever storm may arrive you are still able to continue achieve your goals. We need to follow and undergo a process.
Let’s define cryptocurrency.
Cryptocurrency obtains a digital or virtual currency that uses an online ledger with strong cryptography to secure electronic transactions, which makes it nearly impossible to counterfeit or double-spend.
In today’s economic status, cryptocurrency is becoming known and becoming used to barter and exchange goods or services. Do you need to learn digital asset? Even if the most known person in the world recommended the use of a digital asset, you still better know what it is. When are we able to position ourselves to adapt change, even if we do not know if this digital currency will be actually our tool to exchange of products and services?
Many cryptocurrencies are decentralized networks based on blockchain technology—a distributed ledger enforced by a different network of computers. A defining feature of cryptocurrencies is that they are generally unissued by any central authority, rendering them theoretically immune to government interference or manipulation.
Before getting involved in this kind of investment, do your research. Remember any investment involves risk. Many financial gurus say, “invest only what is in excess of your financial need and saving or what you can afford to lose.”
The first blockchain-based cryptocurrency was Bitcoin, which remains the foremost well-liked. Today, there are nearly 10,000 alternative cryptocurrencies listed with various functions and specifications. Some cryptocurrencies are clones or forks of Bitcoin, while others are new currencies that were built from scratch. And, as far as I know, Filipinos wants to create their own cryptocurrency soon.
Blockchains, which represent organizational methods for ensuring the integrity of transactional data, remain essential components of many cryptocurrencies.
Cryptocurrencies allow secure payments online, which are denominated in terms of virtual “tokens.” These are represented by ledger entries internal to the system. Investors can make money with cryptocurrency by mining Bitcoin, or merely selling their Bitcoin at a profit. All cryptocurrency must be listed on the Coin Market Cap. All cryptocurrencies that possesses it’s owned blockchain called “coin,” examples of which are Bitcoin, Binance and ETH. A cryptocurrency that doesn’t own a blockchain and is just using the blockchain of an ETH Binance is called a “token.”
I would like to share the steps that I made as a beginner in the crypto world.
First, I make my own research about cryptocurrency. After understanding what cryptocurrency is, the second thing I did was I started a virtual account or trial account to trade cryptocurrency. I started the virtual/trial account for three months before considering a real account. Before you start on something make sure you know the risk it will take, think seven times before proceeding.
While you are in a practicing mode of trading, the third step I did was keep on learning how to trade and constantly be updated in the news. Once you are absolutely doing good in practice mode, the fourth is you may start trading little by little on your real account. But again, my strategy may not be applicable for you. I just want to share what I did at the beginning.
In this world while we are living, we need to adapt to change. Adapting to change doesn’t mean you conform to the pattern of this world. You are positioning yourself for expanding the vessels to become a channel of blessings.
You got through the first year of the pandemic crisis. It means you already adapted to the change for almost a year. Congratulations!
Let me tell you this, as a registered financial planner, before doing investing make sure that you know the purpose of what you’re doing. Without the specific list of goals, it may lead you in the wrong direction. You must know and do the basics of finance. Once it is clears, always set a time frame for your goal to do financial planning.
Rodora Mendoza is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 90th RFP program this June 2021. To inquire, e-mail [email protected] or text at 0917-6248110.