Skip to main content

Bitcoins, Dogecoins and other crypto coins: my views

 

Meme courtesy via The Crypto Dog

On the Christmas Day 2017, one of my friend was talking about BitCoin, the popular cryptocurrency, and how it costed A$18,000 to buy one. He wished he had bought a BitCoin when it was still trading for $4000. In 2018, BitCoin rose to $23,000 and fell back to $4300 just before Christmas 2018 (surprise!) and I asked him again, if he would buy it this time. He replied, 'No, mate. I will wait until it gets to a further low; who knows what it might be worth in few months time?'. He never bought any and I cant fault him. Nobody knows how low/high a BitCoin can get to. By the way, as of today, buying one BitCoin will set you back $71K!

Based on my own 4-year experience, I share my Crypto learnings here. I am not a financial adviser or Crypto expert and these are my own views. Do your own research before investing.

Crypto currencies = Lottery. In Lottery, it is either an instant win or instant loss. With Crypto, it could be the same, but takes a while. With Crypto, you can cash out if you are clever and not too greedy. Unfortunately, in both cases, many people lose money while some take the 'winnings'. 

All crypto currencies including BitCoin(BTC), can technically crash to zero as they are not endorsed, guaranteed by a Government or another agency. For instance, normal paper currency is backed by Government, it will fail only if the Government declares bankruptcy, that is technically possible too. In case, if Government decides to enter Crypto world, they would most likely develop their own crypto currency. After all, they are the governments and they can make the rules to govern it.

It seems that any capable techie can create a new crypto coin. This means that the cryptocoins that are trusted by majority will live and gain traction. BitCoin being one of the first-movers and as a popular one in the market, ever Tom and Harry are betting on it. When crypto market crashes, probably, BitCoin will hit zero, the last. Crypto currencies will live as long as people have trust in crypto.  

My approach with Investing in Crypto is that ask yourself 'If you lose the money that you invest, will you be happy and carry on with your life?' Invest only that much money. For me, it is $50 per quarter roughly, it might be $5 or $500 for you. When investing in chunks of $50, I assume I am spending on a restaurant meal and would not see that money ever again. When I invest, I plan to leave it for a long time, at least 10 years or until a point where my I can exit with what I invested. 

Next, I do not follow Crypto market/news at all and I do not have time to read and track all the 985+ crypto coins. So, I diversify my little investments. Using the $50, I buy as many newly-listed, bottom-of-the-chain coins that costs less than a dollar. Sometimes, I would my $50 buys 30 different crypto coins (E.g BitCoin, Ethereum, Steem, DogeCoin) or more. I just buy 1 coin each or part of a coin worth $1. 

Some of those little-known coins, that I bought have vanished from the market. They basically lost the trust from investors and hence marketplace removed them. There went my $1 and $2 sums of money. I am happy because my investment is only a couple of hundred an year. That's my comfort level for investing in lotteries, sorry, Crypto. 

To report success, I bought 5000 DogeCoins (the dog currency) for $30 in March 2018, they were worth $313 in Feb 2020. More on that, later in this article. There is another one, I bought 5 LINK/CHAINLINK coins for $2.9 in Feb 2019 and it is now worth $212. I have no idea how it went up so high. 

Here's the most obvious and most important bit of information. You make money when you sell a crypto coin that you bought. With the DogeCoin or LINK, I can cash them now when I feel I have had enough profit/loss. This (when to exit) is something, as an investor, you would learn as you go. What if the DogeCoin hits $30,000 or what if it crashes to zero. As I did not invest large amounts, I am prepared to wait for long time. Of course, when you cash out, you must declare the profit and pay the taxes. Tax office is watching how much you spent and how much got back. 

So, the summary: Do NOT not invest your life savings in CryptoCurrencies, definitely, do not borrow to invest in Crypto; when you lose borrowed money, you lose the money twice. Buy fractions of popular coins and/or any coins that are less than $1 and hope they go up in value. 

If you think what if your grown-up son/daughter in 2033 would say, 'Mom, I wish you had bought some of the Bitcoin when it was $65k, look now it is $340K', buy a fraction of BTC for the money that you are not afraid to lose now. At the time of writing, $50 buys 0.00074844 BTC. Don't be greedy to buy a whole BTC now at today's price of 65k. The same grown-up son/daughter should not say, 'Dad, I really wish you had not spent that $65K for 1 BitCoin in 2021, for now the BTC is no more and you could have invested that $65K on my Uni degree!'. Assuming 65K can still get a Uni degree in 2033! If you choose to sit on the fence and not bother about Crypto currencies, that's absolutely fine too.

If you want to make quick money in Crypto, follow Elon Musk on Twitter. He seems to influence the crypto market by simply tweeting a Dog picture - the reason why DogeCoin (the dog currency) sky-rocketed in Feb 2020.

One of the main reason why I was able to buy so many diverse coins for such small amounts is because of CoinSpot (referral link in the first comment), the Australian-based currency trading platform. They charge me only 1% commission which means I pay 0.01 if I buy $1 worth of a crypto coin. To compare this with a Share trading platform like CommSec-the Commonweath Bank's Share Trading Platform, when I buy a share with CommSec, they charge me $19.95 commission per transaction and I wouldn't be buying a $1 share and certainly not many such $1 shares. By the way, I talked about CommSec for illustration purpose only, you can not buy Crypto Coin from CommSec. 

You may ask what about the 'Bob from UK who forgot his crypto password and so lost his millions of BitCoins', yes, that's a different kind of physical device wallet to store your crypto currencies where no recovery is possible except with the correct password. I did not go that path and neither should you, unless you know what you are doing!. With trading platforms, your crypto coins are in a digital wallet, you can reset the password and Two-Factor Authentication etc.

If you are thinking to invest in Crypto currencies, you can join CoinBase, a digital currency exchange based in SFO California, we’ll both receive A$12.88 in Bitcoin when you buy any digital coins worth A$128.81 or more on Coinbase. https://www.coinbase.com/join/ponnus_7ow

For Australian readers, you can easily register yourself with CoinSpot. If you want a gift of $10 worth of BitCoin, use the following referral we will both receive $10 worth of Bitcoin each when you complete your first AUD deposit. Referral code EW14MT or Invite Link — https://www.coinspot.com.au/join/EW14MT

Thank you for reading! I hope you got some idea on Crypto Currency now. Ask your questions in comments, I am not an expert and will try to answer as best as I can. 

P.S:- Do not ask me what will be the price of X crypto coin in 2033, I have no idea :-)

Comments

Popular posts from this blog

அவர்களும், நானும்!

அவர்கள்: “என்னங்க... உங்க வீட்டு டிவி ரொம்ப சிறுசா இருக்கு?” நான்: எங்க வீட்ல பெருசா இருக்கிற 170 இன்ச் புத்தக அலமாரி-யை கவனிச்சீங்களா? அவர்கள்: “XYZ (Private School) பள்ளிக்கூடந்தான் (or ABC டீச்சர்தான்) பெஸ்ட் , என் பொண்ணு அங்கதான் படிக்கிறா..நீங்களும் உங்க பையன அங்க சேத்துடுங்களேன்” நான்: ஸ்கூல் பீஸ் கட்டறீங்கன்னா, இப்பவே நாங்க ரெடி!  அவர்கள்: “கார் வேற பழசாயிடுச்சு, வேற வாங்கிடுங்களேன்..” நான்: நீங்க எப்ப அனுமதி கொடுப்பீங்கன்னுதான், பணப்பையோட காத்துக்கிட்டிருந்தோம், தோ கிளம்பிட்டோம்! அவர்கள்: “வாங்கறதுதான் வாங்கறீங்க..புது காராவே வாங்கிடுங்களேன்...”  நான்: நீங்களே ஒண்ணு வாங்கி கொடுத்துடுங்களேன், நன்றியோடு வாங்கிக்கிறோம். கேஷா... கார்டா... ப்ரோ? அவர்கள்: "வெயிட் குறைக்கிறதெல்லாம் பெரிய மேட்டரே இல்ல ப்ரோ...டெய்லி வெறும் வயித்தில 'ஹாட் வாட்டர் + லெமன் ஜூஸ்' 45 நாள் விடாம குடிங்க.. வேற ஒண்ணும் செய்ய தேவையில்லை...சூப்பர்-ஆ ஸ்லிம் ஆயிடுவீங்க" நான்: வெயிட் குறைக்கிறதுக்கு டிப்ஸ் கேட்டனா நான்...? நான்: “உங்க பையனுக்குத் தமிழ் படிக்க சொல்லிக்

பறவையே, எங்கு இருக்கிறாய்!

TLDR; If you merely wish for something and do nothing, you may not get it. If you seek with intent, the universe will bring it to you.   முன்னொரு காலத்துல கிம்ப்பியில் (Gympie, QLD) வாழ்ந்தப்ப, ஒரு நாள் காலங்காத்தால 6 மணிக்கு கொக்கரக்கோன்னு கோழி கூவறதுக்கு முன்னால, அந்த பறவையோட பாடலை முதல் முதலாக் கேட்டேன். குரல் ரொம்ப நல்லாவும், பாட்டு வித்தியாசமாவும் இருந்ததால, என்ன பறவையா இருக்கும்னு தூக்கத்தை மறந்து யோசிச்சேன். அந்தப் பறவை எப்படி இருக்கும்னு பார்க்க ஆசையா வந்துந்துச்சு. (கவிதை மொழியில் யாரோ ஒரு பெண்ணை உருவகப்படுத்தல ப்ரோ; சத்தியமா பறக்கிற பறவையேதான்!) அப்புறம், காலைப்பசி வந்ததும், ஆர்வம் பறந்துபோய், இன்னொரு நாள் பாத்துக்கலாம்னு, மூக்கு புடிக்க சாப்டுட்டு, ஆபீஸ் போய்ட்டேன். இது சில, பல நாட்கள் தொடர்ந்தது. பாக்காமலே, அந்த பறவை மேல ஒரு ‘இது’. இதுன்னா, ஒரு ஆர்வம். ஒரு நாள், அந்தப் பறவையை அடையாளம் காண முடியுமான்னு ஆபீஸ் நண்பரிடம், கேட்டேன். ‘பார்க்க எப்படி இருந்துச்சு?’ன்னு அவர் கேக்க;   ‘பார்க்கவே இல்லையே!’ நான் சொல்ல;  ‘குரல் எந்த மாதிரி பேட்டர்ன்’ன்னு திரும்ப அவர் கேட்க,  அடுத்த பதின

Flickr Hacks:5 Tips get into "Flickr Explore" page!

As you know, Flickr uses an algorithm to choose the best 500 photos every day and post them on Flickr Explore page. This mesmerizing collection is done auto' magic 'ally by an "interestingness algorithm" which rates each photo how good it is. It does by considering lot of factors such as who views, who comments and who favourites a photo. It is not most views, most favourites or most comments. Here's what Flickr says: "There are lots of things that make a photo 'interesting' (or not) in the Flickr. Where the clickthroughs are coming from; who comments on it and when; who marks it as a favorite; its tags and many more things which are constantly changing. Interestingness changes over time, as more and more fantastic photos and stories are added to Flickr." As I tried to crack down this interestingness puzzle, I figured out certain shortcuts by which you can get to the Flickr Explore page. Get this basics straight . Favourites matter m