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Scott Jason Cooper

CryptoCurrency is changing our world one coin at time. Learn about this world-changing global movement and ways to be part of it from Scott Jason Cooper.

New to the Cryptocurrency trading? Scott Jason Cooper can coach you about the fundamentals including knowledge of blockchains and the value they provide society, the best way to monitor, move, and keep your money secure.

Already have a fundamental knowledge of cryptocurrencies? Consult with Scott Jason Cooper to get more advanced knowledge including different types of storage wallets, and the way to differentiate between good and poor tokens or complex customized topics.

The cryptocurrency phenomenon was started by an anonymous programmer with the pseudonym Satoshi Nakamoto in 2009.

The cryptocurrency phenomenon was started by an anonymous programmer with the pseudonym Satoshi Nakamoto in 2009. Today there has been growing interest in digital currency due to record gains – and fall – in the cryptocurrency value.

Whether you are an individual investor or a professional advisor, you need to educate yourself about cryptocurrency. In this article, you will learn about expert advice and tips regarding digital currency investment in 2021.

Cryptocurrency: What Is It?

Cryptocurrency is a type of digital currency. At the moment, there are dozens of cryptocurrencies. But the cryptocurrency phenomena originally started with the launch of Bitcoin in 2009.

Bitcoin was developed by a brilliant computer programmer with the pseudonym of Satoshi Nakamoto. The basic concept is that there are cryptocurrency coins that can be mined by solving complex algorithms using computers.

Cryptocurrency mining is carried out to validate and record transactions involving that cryptocurrency. Every transaction is written on a shared database known as blockchain that is maintained by the community. Cryptocurrency miners validate and record the digital transactions, and then compress the recorded data in the form of irreversible bits using hash values.

The miners are rewarded for their effort in the form of cryptocurrency coins. This is the only way to generate new cryptocurrency coins.

Mining can be done by anyone. But it makes financial sense to carry out mining in countries where electricity is cheap such as China.

Should You Add Cryptocurrency to Your Portfolio?

Scott Jason Cooper – CryptoCurrency is a digital currency that similar to fiat currency also serves as an investment option. But unlike fiat currency, cryptocurrencies are speculative assets. Some experts say that it can diversify a portfolio. However, the short history of digital currency along with wild swings makes it difficult to prove whether it can help in diversifying a portfolio.

Bitcoin as of June 2020 has gradually appreciated reaching new highs and breaking through the $60,000 per BTC barrier. However, the digital currency value has experienced wild swings. The currency had dropped as low as $3,400 in December 2017 after reaching $19,000 in the same months. This large swing in the process is also the case with other digital currencies such as Ethereum and Litecoin.

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Every investment comes with a different degree of risk. You must understand the risks before investing in an asset. Digital currency is a high-risk asset. This means that there is a chance of earning high returns as well as incurring record losses.

No Central Exchange

Cryptocurrency is not like the traditional stock and forex markets that have been around for hundreds of years. In fact, there is no central exchange for buying and selling cryptocurrencies. The US Securities and Exchange Commission (SEC) has delayed or rejected the application of cryptocurrency exchange.

So it is hard to predict whether digital currency will even be around in the long term. The confusion regarding the existence of cryptocurrency makes it a risky asset to invest today.

Uncertainty about Cryptocurrency Existence

Cryptocurrency at the moment is growing in prominence with many institutional investors investing in digital currency. But the uncertainty surrounding digital currency is the biggest risk. No one knows whether the digital currency will be accepted worldwide.

El Salvador is the only government that officially backs payment in cryptocurrency. The government has passed a law that has bound every business in the country to accept payments in digital currency.

In the US, only a few businesses accept cryptocurrency payments. A study by had found that about 2300 companies out of 30 million in the country accept digital currencies. The businesses that accept digital currency represent only a small fraction. In the long term, mainstream acceptance is important for digital currencies to succeed no matter how popular they become.

The confusion regarding the survival of cryptocurrencies in addition to the volatile performance makes them highly risky assets. Cryptocurrencies are not stable having experienced significant rise and fall in a matter of days.

Security

The digital nature of cryptocurrency makes them susceptible to online attacks. Investing in cryptocurrency involves buying and selling digital coins. These coins are stored in hash values in digital wallets. The wallets stored online can be hacked. Moreover, you cannot retrieve coins if you forgot your password to the wallet.

While there are millions of cryptocurrency wallets, most of the wallets only hold a few coins. A report by Cointelegraph.com found that around 800,000 wallets only had one coin that is valued at less than $50,000 today. In contrast, most household investors have six times or more in traditional assets.

So, you should follow the trend and avoid investing too much of your portfolio in cryptocurrency.

How to Get Up to Speed on Cryptocurrency?

You should learn as much about you can about cryptocurrency before investing your hard-earned money. Here are some resources that can help you learn more about digital currency.

  • "Bitcoin: A Peer-to-Peer Electronic Cash System," by Satoshi Nakamoto. You can read the paper if you have technical experience here.
  • Cryptopedia is a free online platform that provides basic and specific information about cryptocurrencies.
  • Coindesk Learn Center explains the cryptocurrency environment including the blockchain in laymen’s terms.
  • CDAA is a curriculum program for financial advisors to learn about crypto-assets and become a certified digital asset advisor.
  •  You can learn about the cryptocurrency market by listening to Delphi Digital reports and podcasts.

Final Remarks

Cryptocurrencies are a little over a decade old. You won’t find empirically-based evidence regarding cryptocurrency investment similar to other traditional assets. It is not possible to carry out a long-term historical analysis of cryptocurrency performance similar to stocks, gold, currency, and other traditional investment options.

Always consult an expert financial advisor before investing in cryptocurrency. Cryptocurrency investment is currently in unchartered territory. There is no knowing whether the digital currency would even be around within the next two to three decades. But at the moment at least, it seems the investors the world over are gripped with crypto-mania due to which we could well hear about it in the news in 2021.