Since the correction in the price of Bitcoin since 2018, the question on the minds of most people is that “is bitcoin still worth investing in?”, and even till now there are still some investors who surprisingly still see bitcoin and other cryptocurrencies as an internet scam. Despite all of these Bitcoin has managed to stand the taste of time
There is also is yet another group of people who believe that Bitcoin is the future of the financial world and have been seeking to invest as much as they can in it before they miss the train. If you are one of those who believe in Bitcoin and have been seeking to invest in it but don’t really understand what Bitcoin is about, this article is for you and even if you are a veteran in the financial world this could still prove helpful, because the crypto world is quite different from the conventional financial system, there are some specific things you should know before investing in it.
Commonly asked questions
Let’s start by first answering some common questions people ask about bitcoin; these are questions you might have asked yourself, some of them are:
- If Bitcoin is stored online, what happens if they wake up one day and choose to run away with my money?
Yes, Bitcoin is stored online but unlike other things stored online, it is built on blockchain technology which is decentralized, meaning that no one person can control it. There has to be a consensus of over thousands of computer in the world before any action can be implemented. This is why it is very hard to hack or steal it.
- What is the downside of investing in Bitcoin, if there are any?
Because of the price jump in 2017 many People have jumped into making investments in Bitcoin, but sadly most of the time they jump right back out, because Cryptocurrency is very different, for instance here are some of the cons that make it very different from buying a normal stock:
- The extreme price volatility
- There are no insurance policies
- Minor mistakes -like sending your funds to a wrong address- can make you lose all your funds
These are risks you might want to make consideration for, but it’s perfectly normal as every investment has its own risk. And as the saying goes, the higher the risk, the higher the returns. The good thing is, unlike when you buy stocks; these risks are more under your control and can easily be contained if you treat your investment with care because in the crypto world you are solely responsible for the security and profitability of your investments.
Steps to getting into cryptocurrencies
- Create a Bitcoin wallet.
The first step to getting involved in cryptocurrencies is creating a Bitcoin wallet before any other coin, which can easily be done on trusted sites like, Coinbase.com, Coinmkt.com, Blockchain.info
- Protect your wallet
After creating the wallet and purchasing your coins the next thing to do is to protect it, keep your pin/password and your recovery passphrase in a place that is not easily accessible, by anyone else, somewhere private and safe
- Backup your wallet
This is one of the most important parts of the process, there are many would-be millionaires who are not millionaires today, because they lost access to their wallets or their wallets itself, the best place to back it up is offline (because any device connected to the internet is open to hacking) and make sure you backup is stored on more than one device.
What is to be expected
There is a reason most people are rushing after Bitcoin, it is not mostly for the immediate profits but because they under the direction the world is going, digital. Slowly every day, the adoption of Bitcoin in different spheres financial and governmental is taking place, though it is faster in some region than others. But the point is because of the ease that Bitcoin provides, its worldwide adoption is quite inevitable, which means one day it won’t just be a preferable means of conducting financial transactions, but the most preferred means. Bitcoin gets its value from the people who use it, the more people that use it, the more valuable it becomes, whether or not this would generate massive RIO for persons who have invested in it should be left for time to tell.
Will Cryptocurrencies Gain the Needed Recognition From Institutional Bodies?
Economic analysts are saying there is the possibility that crypto will be floated on the Nasdaq, which should add a credibility stamp to cryptocurrencies and its uses as an alternative to traditional currencies.
Some predict that all that crypto needs is a verified exchange-traded fund (ETF). An ETF would certainly make it easier for people to invest in Bitcoin, but there still needs to be the demand to want to invest in cryptocurrencies as well as mass adoption which should drive its demand to the roof.
A quick check on some facts about bitcoin
Bitcoin being at the forefront of cryptocurrencies and as we already know is a decentralized currency that uses peer-to-peer technology, which enables all functions such as currency issuance, transaction processing and verification to be carried out collectively by the network. While this decentralization makes Bitcoin free from government manipulation or interference, the flipside to it (which could also be considered an advantage) is that there is no central authority to ensure that things run smoothly or to back up the value of a Bitcoin. Bitcoins are created digitally through a “mining” process.
Sneak peeks into the future.
When taking a look at what the governments of various countries are planning around the blockchain technology it leaves us with no doubt that there are endless possibilities in this space, although it might seem challenging, it will make a remarkable impression on technological advancements in generations to come.
In May 2018, the DHS froze an account of Mt. Gox, formerly a large cryptocurrency exchanger. The government alleged that his transactions broke anti-money laundering laws. And in August, New York’s Department of Financial Services issued subpoenas to 22 emerging payment companies, many of which handled Bitcoin, asking about their measures to prevent money laundering and ensure consumer protection.
Despite all of these happenings which could be easily seen as bad publicity for the crypto space, we could see that there has been a major attraction after the announcement of the Facebook-owned coin Libra to launch its own dollar-backed cryptocurrency, there have also been clear indications of interest from some countries such as Bangladesh that has ensured there is effort in sponsoring the training of young graduates in the study of the decentralized ledger technology. This is a clear indication that there are endless possibilities in this space.
The Notoriety of Pump and Dump: Steps to Protecting Your Crypto Portfolio (Part 2)
In our previous post on this subject matter, we were able to establish a solid ground on how the concept of pump and dump also popularly known as P&D began and how it made its way into the cryptoworld. In this segment, we would further dive into knowing how to identify and avoid them.
What they look like
The tell-tale sign of a crypto pump and dump comes from looking at the charts: do you see a coin with a low price in an illiquid market that suddenly bursts in both price and volume? That’s a pump-and-dump scheme at work by the looks of it.
What’s an example of a pump and dump?
Jimmy hears a rumour that a certain crypto coin is about to go to the moon from a scammer on Twitter or Discord; common hunting grounds for pump and dump groups. He sees that the price has already increased, and due to a fear of missing out on profits he begins frantically buying the coin.
Other investors have already been doing the same, and now the orchestrators of the scam know it’s time to dump their bags. They sell all their coins, which causes the market to crash once they are in the clear. The value of the assets dumps and Jimmy is left with significant losses he can never recover from. Then the organizers of the crypto pump and dump group take its profit and move on to the next coin.
While pump-and-dump schemes are an old, well-trodden ruse in conventional financial markets, the old fashioned ploy has found a new playground to thrive – cryptocurrency exchanges.
Cryptocurrency exchanges aren’t fully regulated for now, so these schemes are in a legal grey area. The Commodity Futures Trading Commission offer rewards for whistleblowers who report pump and dumps, but they’re difficult to track and regulators in many countries haven’t acted yet. That means it’s up to you to educate yourself and make smart decisions if you plan on getting involved with altcoins.
How to avoid p&d schemes
Cryptocurrencies are very appealing to first-time investors — it’s easy to get involved, you could make a huge profit, and there’s constant media hype. It’s fantastic that more people are learning about investing. But this is also a magnet for scammers and fraudsters who profit from misconceptions and misunderstandings. Greed is a powerful driving force. When you’re constantly hearing stories of people getting rich from a modest purchase of ICO tokens, it’s easy to be drawn in. Distinguishing between a price rise motivated by intrinsic value and a pump and dump isn’t easy.
It’s clear you definitely don’t want to get caught in the tail-end of a pump-and-dump scheme. If you’re thinking about investing into a coin that’s really getting hyped on the forums right now, but you’re not so sure, go to the charts and check for yourself. Are there abnormalities with the volume? Was the coin’s market super illiquid just a day ago but is now exploding? If you see this sign, your best bet is to stay away—the dump could start any time, burning your investment in the process.
Carrying out your own due diligence
The acronym DYOR (Do your research) first comes to mind when the preceding actions of a proper investment move come to mind. Questions that must run through your mind are questions such as:
Does this sound too good to be true? Because most times it is.
Does this investment have fundamental value? Is this coin in any way useful? Is it solving a real-world problem?
Who made this coin? Research about the team are their details publicly available, do they have relevant experience, track record and are they trustworthy?
Are they promising guaranteed returns, this is a big red flag as there’s hardly any investment that can guarantee this
Am I under pressure to buy fast or spend more than I can afford?
Do I understand exactly what I’m buying?
What does this coin do what are the use cases?
Is this an emotional or logical decision? Emotion makes us susceptible to scam and emotional hack by criminal emotions must always be in check when making investment decisions.
If the price is rising, is there any real justification for it? Has it happened slowly or suddenly?
Would I be comfortable Hodling it long-term?
Is the Source of the information trustworthy? Where am I getting my information from? Am I basing my decisions on a forum or social media posts, what’s the Track record of the sources? And is there any form of monetary inducement influencing the sources of the info?
From the answers to the questions above and your intuition tells you about the investment, you would be able to make a more informed investment decision, it’s never a good idea to invest based on emotions because that’s what scammers target.
The Notoriety of Pump And Dump: Steps to Protecting Your Crypto Portfolio (Part 1)
The relative anonymity of the crypto sphere has led to it becoming a fertile brooding ground for illegal activities such as currency theft, pump and dump schemes amongst others. Back in 2000, Michael Lewis (author of The Big Short) covered the story of a high-schooler charged with stock-market fraud. It was the first time the Securities and Exchange Commission (SEC) had investigated a minor, this also proves that sometimes, reality can be stranger than fiction.
Pump and dump in stocks
If we take the view that markets are rational, it might seem bizarre that a 15-year-old could manipulate stock prices and earn hundreds of thousands of dollars in the process. But that’s exactly what Jonathan Lebed did, from the comfort of his bedroom.
How? Well, if you’re unfamiliar with the case, the answer is simple. Lebed bought a lot of cheap stocks and then posted on finance message boards using multiple accounts, urging others to do the same. Each time, interest in that stock exploded and prices shot up. Lebed then sold his own holdings and moved on. That’s all it took to wreak havoc in the stock market: a bunch of hyped-up messages telling people to buy.
This is the basic template for a traditional stock pump and dump. An individual or group will buy a low-valued stock, often priced at a penny. Then they’ll spread misinformation, claiming the stock is under-valued and about to shoot up in price. If enough investors believe their claims and buy, the price will indeed go up — which validates those claims and attracts more interest. Eventually, the pump and dump organizers sell and the scheme collapse. So that’s how a stock pumps and dump works — which brings us to cryptocurrency.
And now in cryptocurrencies
If you’ve been on the crypto scene for a while, you’ve surely seen no-name coins skyrocket several hundred percents in one day and for no apparent reason whatsoever: these are clearly pump-and-dumps coordinated for quick profits. Even some less-than-promising ICOs, too, have been decried as inherent pump-and-dump schemes. Jordan Belfort, the infamous “Wolf of Wall Street” who pioneered the penny stock scams of the 1990s, is of this line of thinking. He declared as much in recent comments to the press: “[ICO] promoters are perpetuating a massive scam of the highest order on everyone. Probably 85 per cent of people out there don’t have bad intentions, but the problem is, if five or 10 per cent are trying to scam you, it’s a f***ing disaster.”
Some Frequently Used Crypto Terms and What They Mean
Have you ever been on a crypto forum and seen users chatting and in the midst of these chats you see some terms and phrases that and you have no single clue as to what they mean? and in bewilderment you move to ask for the meanings. But on the second thought you think no, “I don’t want to sound naive”, but ermm that doesn’t solve it, you would still love to know what they mean and stop feeling like an outcast. “what does HODL mean?, “why do they keep saying to the moon?”, “and what the heck has a bear to do with the market?”.
So many questions and assumptions pop up in your mind as to what each particular phrase might mean, but nobody seems to care they just keep on with their phrases and whatever news it is they are discussing. If you are one of these people, well dear friend do not be afraid for you do not thread these path alone, it’s a common experience.
As a newbie I remember the first time I saw someone use HODL and I called him out for bad grammar only to be put under the receiving end of nightmarish joke. The lesson was well learnt as it afforded me to go only and search for popular cryptocurrency terms and slangs and it was quite informative and I got delivered from the shackles of ignorance
Over the years I have come up with some of the popular crypto jargon and slangs since a friend of mine asked me to tell me the meaning FOMO through a private message while arguing on a crypto discussion group.
And today I will be giving you a brief preview into some of strange these terms, what they mean and how they came to be used in the crypto space.
So what are these terms
This is one of the most popular slang now used in the crypto sphere … HODL.
It retains the honor of one of the most searched crypto term on goggle among other crypto jargon;
HODL (a misspelt form of HOLD) actually means to hold ones (currency) tokens or coins when there is a strong urge to sell, in hope that the hodlers (that is someone that HODLS) might make more profit on the crypto assets by refusing to sell at the present price
According to popular opinion, the slang came about as a result of a misspelling of the word hold, by a user on a bitcoin thread in Japan, who spelt the word as Hodl instead of hold, when trying to inform people of intention to Hodl is coins
To the moon
This one is very popular mostly by the adopters of a new crypto project or ICOs especially in their groups, some sort of rally call, it’s very popular was firstly used to refer to altcoins.
Personally, this is the most irritating and arguably the most overused crypto jargon in my opinion especially when they use it for really shitcoins that end of selling for close to nothing, and projects that end up dying.
To the moon, means the point where it reaches a high surge in the price increase, they say it has mooned way higher than what it is presently
Well I’m biased in my opinion of this but this is the best crypto jargon
Because personally it resonates with the popular crypto dream of getting rich while hodling, lambo to me is one of the most important parts of the crypto culture of getting successful and wealthy, the term Lambo has to do with the idea that if you Hodl your bitcoin and others crypto assets, it will moon and you will cash out and have enough money to afford to buy a Lamborghini according to some people they believe the choice of using the sport car brand has to do with the fact the logo of the brand is also a bull, which is the next term we’ll discuss.
Bulls and bears
These terms are also very popular they are used to describe the state of the market, this one of the borrowed terms from the stock market, where bear market; means the state of the market is poor and the prices are and very low the animal bear was used because when it fights or attacks it hits downwards
Bull, on the other hand, has to with the state of the market when the price is high which like the bear term comes from the behaviour of the animal due to the way the bull fights when it launches an attack, its focus is upwards meaning the prices are going up.
Pump and Dump
I once heard a colleague use this to refer to a new token whose price increased dramatically and before an hour was up it fell so low, beyond recognition. Pump and dump are when a group of investors decide to invest(pump) in a particular cryptocurrency, just so that its price rises and attracts other investors who also cause it to increase further and when they think the price is high enough, they sell everything (dump it).
Simply means an All-Time High. A good example of this is 2017 when Bitcoin kept rising till it hit $25,000. ATH is the reason most hodlers hodl, they believe that in the nearest future the value of the currencies they are holding will shoot up once again, and this time stay that way.
This is one of those strange-looking words, which most people (including me) when they first see it, they think it means some big thing or a technical term. FUD simply stands for fear uncertainty and Doubt. This word is used to refer to those who exhibit those qualities (fear, uncertainty, doubt) when it comes to making investments or buying a particular currency.
Is one of those words borrowed crypto slangs, it is a word that had already been in use before it was introduced to cryptocurrency, Fomo in crypto space actually means the Fear of missing out, and on Wikipedia fomo means “A pervasive apprehension that others might be having rewarding experiences from which one is absent”. It is used to refer to the fear a person feels when he sees a lot of people investing in currency and that he or she hasn’t invested in, especially when that currency look potentially profitable. Fomo has caused many people to jump into making investments that they wouldn’t normally make and has cost them a lot.
Considering the use of a crypto dictionary
There are hundreds of new words, slangs and phrases sprouting up in crypto space every day, dues to the various activities and engagement of people, but where do we turn to for definitions? Is there a place we can find the meaning of these words? Yes, there are but seemingly very few. One of them is Cryptoground
They offer A to Z dictionary services for crypto terms, sites like these are very useful to crypto enthusiasts and very handy for beginners especially, but if you don’t still find what you need, the goggle button can still serve as a worthy alternative.
Altcoin News3 days ago
Ripple Hit With Law Suit From Aggrieved Investor For Selling Unregistered Securities
Opinion4 days ago
FIRS Move to Commence Collection of Tax on Online Transactions to Boost Market for Crypto Payment Solutions
Business21 hours ago
Coinbase Expands Its Custody Business As It Acquires Xapo’s Institutional Business
Press Release2 days ago
CryptoTVPlus Announces Campus Blockchain & Cryptocurrency Awareness Tour (Campus BCAT) 2019 – Press Release