Disclaimer: We are not financial advisors and it is fully up to you to do your own research and make your own informed decision about if and how you approach cryptocurrencies. Buying Bitcoin and Beyond is based on our thoughts and experience. Take the time build your own opinions and experiences too!
In this Cryptocurrency Investment Guide, we are going to cover the following topics.
Why Should I Invest in Cryptocurrenies?
What is the Best Cryptocurrency?
How Do I Choose the Best Cryptocurrency Exchange?
How do I Invest in Cryptocurrency?
How Do I Learn More About Cryptocurrencies?
Why Should I Invest in Cryptocurrencies?
Before you read our Cryptocurrency Investment Guide, you may be asking yourself, “Why should I even be investing in buying Bitcoin or cryptocurrencies?” Bitcoin can seem technologically challenging to understand, there are over a thousand projects to choose from, the prices are volatile, and certainly many projects will end up completely failing. Why would anyone sign up for a ride like this?
You should be taking this technology as seriously as you should have been taking the development of the internet in the early 1990’s. – Blythe Masters
You should be looking at cryptocurrencies because they are likely going to change the world as much as or even more than the advent of the internet.
Let’s look at this technology briefly to understand why it will transform the world as we know it. Bitcoin and blockchain technology in general has a few features that are critical to understand.
1. Decentralization – This aspect is very important. Bitcoin is spread across the world in the hands of thousands of people. There is no central server that can be shut off, no CEO that can embezzle money, no company that can be sued, no single choke point that can be attacked and shut down.
2. Trustless – You don’t have 3rd party intermediaries that you have to trust. When I write check to you, I have to trust the bank to carry out the transaction correctly. I have to trust them not to steal my money, make an error, charge me unfairly, freeze my account, report my data to the government in a way that leads to an audit from tax authorities, leak out my personal data to marketers, etc. When I log in to Facebook, I have to trust that they won’t be hacked, won’t share my photos and messages with someone else, and so on. When you stop to think about it, almost everything you do in modern society involves you going through 3rd party intermediaries that you have to trust. And that trust is routinely violated – think hacks, data breaches, privacy violations – millions are affected every year and it’s only increasing. Bitcoin and the blockchain eliminate the need for these intermediaries.
3. Uncensorable – This is huge. Thanks to being decentralized and not needed to go through 3rd party intermediaries, they can’t be censored. Governments for example can’t block transactions that they don’t approve of. Imagine if the Jews of 1930s Germany could have escaped the Nazis earlier, wealth intact. Imagine if people stuck in impoverished countries where the government is inflating away the value of the currency or taxing people into poverty could simply take their savings and go elsewhere.
4. Mathematically predictable inflation or deflation – Bitcoin is an algorithm that starts with slight inflation and will eventually be slightly deflationary. The key here is it is set in stone. You don’t have to worry about political developments suddenly leading to a major devaluation of your currency. Will Social Security in the US exist by the time you retire? Will the US dollar lose much of its value (it consistently does year after year). Those are political questions with no definite answer. With Bitcoin and blockchain, you don’t have to wonder what inflation will be.
5. Micro-transactions – A lot of value in our economy is lost every year due to the fact that tiny transactions just aren’t worth carrying out. Here’s a simple example. Media tends to be saturated with ads. That’s how they make money. To run better ads, they use cookies, gather tons of personal info on you, and in many cases, put your privacy at risk to do so. Why? Well, other than monthly subscriptions or ad deals with advertisers, there is no other reasonable way for them to monetize their content. Imagine if you paid 1/10th of a cent for each page you viewed on their site? Suddenly this would add an entire new way for that industry to monetize content and provide an ad-free experience. As millions of new devices come online in the next decade, machines will be able to communicate back and forth with each other and carry on micro-transactions in the background thanks to the low or no-fee capabilities of blockchain tech.
Payments, finance, supply-chain management, advertising, AI, gaming, gambling, media, prediction markets – all these and many more industries are being transformed as we speak by blockchain technology. And we are still early. This is like the internet in the early ’90s. Some of the most transformative applications of the technology may not have even been thought of yet.
What is the Best Cryptocurrency?
There are over a thousand cryptocurrency projects and more are launching every week. How can you possibly sort through all of these to find the best ones to invest in?
Well, first, it’s important to understand that in spite of there being more than a thousand projects to choose from, a few coins make up a big portion of the entire market. For example, Bitcoin tends to be worth 30% – 50% of the entire market! So if you study Bitcoin, you already have an understanding of where up to half of the investment energy has gone so far in crypto. Add in a few more projects like Ethereum, Ripple, Bitcoin Cash, and EOS, and you have about 75% of the entire market accounted for.
So don’t make crypto harder than it needs to be. Start with these pages and you’ll already start to have a decent view of the market as a whole.
Largest Market Cap Coins in Crypto
Cryptocurrency Sectors
Another way to think about cryptocurrencies is to think of them like the stock market or like a whole economy. Generally an economy or stock exchange is divided into sectors. You can divide crypto projects in sectors as well. You can then study each sector and find ones that you are particularly excited about and then target the projects within that sector.
We are a big fan of a few sectors right now – platforms, privacy coins, and interoperability projects.
Crypto Platforms
Platforms are blockchain projects that allow you to build things on top of them such as decentralized apps or smart contracts. Think of these as being like the base layer of the internet upon which you can build websites and apps. We are extremely excited about these because ideally, as more and more is built on these, the value of the platform should increase as well. If you believe many industries will be transformed by blockchain technology then this may be a very smart sector to target. Here are some of the biggest platform projects to look at.
Privacy Coins in Crypto
Another sector we really like is privacy coins. There will always be demand for ways to make private payments that cannot be blocked, censored, spied upon, or catalogued. Many beginners to cryptocurrencies think that Bitcoin is private, but that’s not entirely true. While Bitcoin transactions don’t show your name, email address, or other identifiable information, they do show your wallet address. Over time if you made enough transactions from the same wallet, someone could possibly piece together who that wallet likely belongs to. Privacy coins on the other hand take privacy to the next level. For good reasons or for bad, there will always be a large demand for the ability to store and transfer wealth beyond the prying eyes of anyone else. Here are some of the biggest privacy coins to look at.
Cryptocurrency Interoperability Projects
The final sector we really like right now is interoperability. Basically these are projects working to link all the other blockchains together so that we can freely exchange information and value between them. We love this sector because eventually, there will likely be more value flowing between chains than within individual ones. So it stands to reason the projects that can facilitate communication between these hundreds of blockchains will likely become some of the most important projects in crypto. Here are the biggest interoperability projects to look at.
How Do I Choose the Right Cryptocurrency Exchange?
In the previous section of our Cryptocurency Investment Guide, we just pointed out 15 individual projects across 3 crypto sectors that could be worth looking. So what’s the next step? How do we actually go out and purchase Bitcoin, Ethereum, Ripple, or whatever project we like?
The next step is to sign up for exchanges. There are several popular ones. When you have the time, feel free to read our review of the top cryptocurrency exchanges.
Our first recommendation is to start with Coinbase. Coinbase allows you to buy Bitcoin, Ethereum, Bitcoin Cash, and Litecoin with national currencies such as US dollars, GB pounds, and Euros. If those are the only coins you’d like to get, then Coinbase will be the only exchange you need. Most people though end up wanting more options, so the next step is to open accounts at additional exchanges.
Our recommendations? Binance, KuCoin, and Cryptopia. Again, read our full review to learn more about each of these, but Binance, KuCoin, and Cryptopia will give you a huge range coins to buy, and in the case of Binance and KuCoin, chances to earn dividends, referral bonuses, and air drops (free coins). Each exchange lists some unique coins, so opening free accounts at all of them just makes sense.
How to Invest in Cryptocurrency – Putting It all Together
Ok, let’s put it all together. In Buying Bitcoin and Beyond, our Cryptocurrency Investment Guide, you have already seen some good coins to go research and you know some exchanges you can use to go buy them. But how do you choose among all these various coins to pick the best ones. Here’s our method.
1. Go to our White Paper and Info Sheet Page for the coin you are interested in. Here we provide basic information like it’s price, market cap, sector, white paper, and other resources like the project’s team, website, twitter, and more. This is a great starting point to figure out what the project is all about.
2. Read the white paper. The white paper explains the entire project, including vital information like what the project’s goals are, the tech is uses, the problems they are looking to solve, etc. Some white papers are very technical. Don’t let that stop you. Scan through the tough parts and even if you fail to grasp it 100%, by the time you finish you will still have a much better feel for what the project is all about. We have white papers posted on all our info sheets to make it easier for you to carry out this important step.
3. Look at the team. Do a quick Google search on the key people. Ideally, they’ve been involved in other successful projects or come from impressive academic backgrounds. Sometimes great teams rise from obscurity, but generally, the strongest teams have proven success behind them.
4. Sign up for communication from the team. Twitter is a great resource for this. How often do they communicate. What is the tone? Look for frequent, professional, goal-focused communication from the team.
5. Check out reviews from various sites. Don’t buy a coin just because someone randomly recommended it. Remember that people can be paid to recommend coins or could have ulterior motives for encouraging you to buy. Here at White Paper Pagoda, we will never accept any payments to recommend any coin, but it is a widespread issue in the industry, so please, always do your own research before buying.
We are building our own free reviews of coins and at present only give our highest 5-star rating to 5 projects. Check out our review page to learn more.
How to Learn More About Cryptocurrencies after Finishing Buying Bitcoin and Beyond
You made it to end of Buying Bitcoin and Beyond our Cryptocurrency Investment Guide. What if you are still hungry to learn more? Good! That intellectual curiosity will serve you well. Here are 4 books that helped us gain a much more confidence understanding of cryptocurrencies. We highly recommend ordering and reading these as soon as possible. A strong foundation of knowledge gives you a distinct edge over your peers that lack it.
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