Remember the first time you heard about a smartphone? Could you imagine that, within a decade, not just you but virtually everyone you know would be carrying around these little rectangular devices that connect the whole world? If you were a person who recognized the smartphone would go from being a neat toy to a global necessity, congratulations! It is time, however, to recognize another inevitability: digital currency. Cryptocurrency, or simply “crypto,” is rapidly becoming legal tender around the world and one day—perhaps sooner than later—will become the currency of choice for nations and individuals. Recognizing this now will reduce a great deal of anxiety down the road and prevent you from feeling left behind. Also, here are some mental exercises to help you prepare for building your crypto portfolio.
Before Making Such Significant Decisions, Optimize Your Network
Optimizing your network, in this case, means obtaining total maximum security for your system. It may seem redundant or even an oxymoron to suggest improving security when you are talking about crypto. After all, it is ultra-secure with its virtually impenetrable blockchain encryption. Unfortunately, not everything on your personal computer platform is blockchain secured, meaning there are other portals to your network and thus to your intellectual property and accounts. You want to make certain your network connection has direct routing SBC (session border controllers). This will also facilitate the highest quality QoE (quality of experience) for users. Since others will be connecting and interfacing with you, a good SBC will help to create a secure network for your SD-WAN (software-defined wide area network).
Develop Your Understanding of How Crypto Works
Among other things, crypto is a paradigm shift. It is imperative to grasp what this type of currency is and exactly how it works. It is likely you know that cryptos are decentralized forms of digital currency. The value of a particular crypto can rise or fall like the price of gold or an individual stock on a stock exchange. Thus, your investment in crypto can become more or less valuable without your doing anything. When you invest in a crypto, you are really investing in its blockchain system. As you know, blockchain is a continually growing record of every transaction ever made with a particular form of currency. Each crypto has its own different form of blockchain.
Check Out the Individual Crypto
For an idea that only became reality a half-dozen years ago, crypto has really taken off, with more than 2000 different varieties. These will not last. Some cryptos will grow in popularity, trust and stability and some will simply wither and disappear from disuse. Since you do not want to invest your funds in a crypto that will wither and die—and your money with it—it is important to learn all you can about each individual crypto in which you want to invest. First, look over their “white paper,” which is like a stock portfolio. Then, check out what you can about their development team. Finally, look over their list of investors to see who else trusts them. Yes, this is a little time-consuming, but most of the information is readily available.
Keep Your Eggs in More Than One Basket
Diversification is the hallmark of every wise investor. Some financial gurus suggest that you should break your investments into at least 10 different cryptos, which is a lot of paperwork. While it is likely you will find one or two cryptos that are closely aligned to your financial principles, it is still the wisest policy to diversify into a half-dozen or more. Just like stocks, cryptos can be divided into high, medium and low market caps. The exciting element of this is the recognition that these distinctions suggest, as with stocks, that the value of your funds is intended to grow.
In the same way there are wealth managers and stockbrokers, so there are consultants who specialize in helping you choose cryptos.