You probably have an idea of what Cryptocurrency is, if not, learn about cryptocurrency here.
I know now you must be wondering how to get started and what coin you should buy?
You may just want to buy some coins and save them for their potential growth in the future or you may want to become more of an active investor (trader) and buy or sell cryptocurrencies more regularly to maximize profit and revenue.
Regardless, you must have a plan, strategy and knowledge of what you’re getting into.
Most cryptocurrency were created for a purpose and to solve a problem. They were not created solely for investments initially!
Let’s start with the King,
Bitcoin was created as an Alternative to fiat (fiat means government owned and regulated currency).
Bitcoin performs the same function of your traditional money which is to buy and sell goods and services with money over the internet but major aim of Bitcoin is to provide an alternative payment system that would operate free of Government control (Wonder why the Nigerian government banned crypto? Here you have it).
Unlike the Bitcoin network, the primary purpose of Ethereum is not to act as a form of currency. Ethereum users can build applications that “run” on the blockchain. You know how you have “Android” and “iOS” and some Apps are available on iOS but not on Android?.
Ethereum is something like an OS but for blockchain. ETH also allow those interacting with the Ethereum Network to make and operate ‘smart contracts’ without having to trust each other or use a middleman.
I’ll simplify “Smart Contracts.”
Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a ‘middleman’.
Let’s simplify further… Although not so common in Nigeria, there is a machine called “Vending machine”, you put a coin inside and it brings out a Soft drink or snack (I’m sure you’ve seen it in movies).
Now a vending machine eliminates the use of ‘Iya Ronke’ who has to seat at the spot and you give her N200 for coke and she looks for change to give you.
Now that’s smart contract, it eliminates the use of middlemen i.e (agents or Lawyers who have to come up with contracts).
The BNB coin is the cryptocurrency for the exchange platform Binance. BNB started as an Ethereum-based token (remember we said Ethereum let’s you create Apps on its “OS”, BNB was created on Ethereum initially until Binance became big and created their own “OS” (Custom Blockchain) called Binance Smart Chain to solve the problem of high gas fees on Ethereum! The sole purpose of BNB is not to replace fiat but to offer an alternative way to pay for fees charged to traders
Crypto experts have argued that DogeCoin has no critical use and should not be taken serious and also described it as a Meme coin (which it actually is…) but why is the value increasing if it’s not useful you may wonder?
Let’s do a breakdown. Couple of years ago in Nigeria, if you were a comedian or a footballer you’re barely taken serious as their value was low and most people only saw Doctors and lawyers as people with Value but try inviting a Comedian like Basketmouth to MC at your wedding and you’ll get a huge bill. Now he might still be a Joke to people who rate lawyers and doctors, but there is a big community who sees him as a Celebrity, the Jokes as simple as it seems help relieves boredom and sometimes lifts mood.
Now that community, fans and followers are what increased his value even though the Job of a doctor is more critical, now do you get where I’m going with this?!
Now there are other Coins that have absolutely no use, they were just created to pump, and possibly dump. So you gotta be careful when buying a Coin. Bitcoin remains the only coin that is safe to a large extent in terms of long term investment and returns.
Every other Coin has its risks, a little research might help you manage your risks but always put what you can afford to lose or money you won’t be needing soon.