A lot of people are talking about cryptocurrencies these days, probably because they've gone up a lot more this year.
The most important thing to remember is that everything that has to do with bitcoin or ethereum at this moment is pure speculation. Prices are going up because there is a limited supply and people are betting that other people will buy at higher prices later on. There are zero fundamentals involved because these digital assets do not produce cash flows, such as an action or a bond.
Cryptocurrencies represent the future of trade or are simply in a giant bubble, people are curious about how they can experiment.
I do not recommend that people risk their money in cryptocurrencies, but I have been experimenting personally, just to learn and see for myself what it is all about. This video is for people who are curious and not an endorsement of a particular currency or service.
Okay, with that disclaimer, I'll tell you a little about how I've been investigating.
I chose to use Coinbase.com to buy my first bitcoin in July. It is a brokerage and manages storage for people who want to buy and sell digital assets.
To begin, I created a username and an account. Then they asked me to come to a bank account, which took 48 hours to establish. I was able to execute my first purchase, blocking my price immediately, although it took almost a week before my bank transferred the money and the coin purchase appeared on the screen.
The first thing you will see when you log in is a panel. By default it shows Bitcoin's recent price activity, although you can switch to see the prices of Ethereum and Litecoin, the other two digital assets that Coinbase currently allows you to buy and sell. [Nextyouwillseethetaxreceipts
The purchase / sale page is where you place an order. It looks like an online stock brokerage page, and that probably is not an accident. You have the option to buy fractional amounts of cryptocurrency. You do not have to buy a full coin at a time. I think this has accelerated adoption among young speculators, starting first with lower dollar figures.
You can also see that there is an option to place a fixed dollar amount in a specific range. For example, you can make the same amount of dollars in your daily, weekly, biweekly or monthly account, making an automatic purchase regardless of the price. It's like the average cost in dollars.
The most popular news source for all things is called Coindesk. Coindesk has been established to be something like the Wall Street Journal for digital assets. The coverage of the news continues throughout the day, written by analysts and journalists covering the space.
Of course, it's highly biased to be bullish with cryptography in general, so it's important to take everything you read with a grain of salt.
Let me remind everyone that until now, Bitcoin has had a parabolic increase and it has become a kind of mania, and there is no reason to think that this could continue uninterruptedly. In fact, one of the most enduring features of cryptospace is the periodic failure, which comes without any warning, even though all blockades have led to higher prices so far.
Storage and custody are another complicated problem, with hacks of these exchanges occurring regularly. For that reason, many players have been taking out their digital currencies from exchanges and storing them on a chip that is not connected to the Internet.
Measuring a hobby or a bubble is very difficult, so my attitude is to hope that every dollar with which I experiment could be lost.
The world of cryptocurrencies is exciting and is plagued by dangers, volatility and possibilities of theft. It is very early now and anyone who experiences should do so with wide eyes and a great tolerance for risk.
Good luck out there.