Today's video is about cryptos for beginners.
And this has been a long time coming.
I have kind of been avoiding doing this video.
But I've had so many of my friends asked me about cryptos
and how to get started and just to buy a little bit in crypto.
So I thought, all right. It's time to do the video.
I am Tiffany Thomas with wealthytiffany.com
and I achieved financial freedom and became a millionaire.
If you're looking to do one or both of those things,
hit that like button and hit the subscribe button and we're going to dive right in.
All right, since this video is for beginners,
we are keeping things very, very basic today.
So what exactly is a cryptocurrency?
Cryptocurrencies are digital assets created using computer
networking software that enables secure trading
and ownership.
All right, what in the world does that mean? So cryptocurrencies are digital.
It's not something physical. You don't have an actual dollar bill to hand
to somebody, most cryptocurrencies are supported by a blockchain,
which maintains a tamper-resistant record of transactions
and keeps track of who owns what. Public blockchains are
usually decentralized, which means they operate without a central authority,
such as a bank or government. Comparing cryptos to the US dollar,
the US dollar is backed by the federal government and it is a piece of paper and well,
yes, we can transfer money to different bank accounts
or to someone else through Venmo or something like that.
So you're not actually seeing physical money,
but it essentially is physical money
because it is backed by the government and they have printed a lot of money,
so cryptos are strictly digital and yes,
they did create a coin for Bitcoin,
but that is another story. So, cryptocurrencies are not backed by some type of government.
So as you can imagine, there is a risk in
investing in cryptocurrencies, and there are different types of cryptocurrencies.
So some of them are coins or tokens depending on how they are used.
Some are intended to be units of exchange for goods and services.
Others are stores of value and some are mostly designed to help run computer
networks that carry out more complex
financial transactions. Cryptocurrency is not just something that you are
exchanging for a certain good or service.
It can be something else and when people talk about mining crypto,
they aren't going to a physical mine and mining gold or something like that,
but they are mining on their computers.
Essentially, when you are mining a crypto like Bitcoin on a computer,
the computer is solving complex puzzles in order to verify the
authenticity of transactions on the network, on that blockchain.
So the digital transactions that are being made they’re being verified by a computer
and as a reward the owners of those computers can receive newly created cryptocurrency.
And not all cryptocurrencies
use the mining method, but luckily you don't have to mine Bitcoin
or certain cryptocurrencies in order to gain access to those cryptos.
So we're going to talk about about how you can invest in cryptos.
The first thing you'll want to do is decide where you want to buy your cryptocurrency
and now a lot of brokers offer the option to buy cryptos as well as stocks and bonds.
One of the brokers that I use is Webull
and I will leave a link below for that and you can get three free stocks
if you deposit at least a hundred dollars into your account,
but the reason I chose Webull is because I already had a brokerage account with Webull,
and then they started offering cryptocurrencies.
So I thought, why not? I might as well put a little bit in crypto.
But if you want to go with a platform that offers just strictly cryptos
and they don't do stocks or bonds.
Then there are options out there
for that. And one of those is Coinbase and I do have a Coinbase account as well.
I set that up quite a while ago,
when one of my friends was telling me that he was investing in cryptocurrencies,
and I thought, huh, maybe I should put a little bit of money in there.
So a few years ago, I set up the account with Coinbase and invested in a little bit of crypto. But
if you already have a brokerage account setup or even a Roth IRA or a traditional IRA,
you can look to see if that brokerage company offers cryptocurrencies
because since you are a beginner,
you probably just want to stick with the main cryptos
and not get into a whole bunch of different cryptocurrencies.
The next step that you'll take is to decide how you want to purchase cryptocurrencies.
And the way that I did,
this was just to transfer money from my checking to the brokerage account or to Coinbase.
That's probably the easiest way to do that. So you
probably don’t have any crypto currencies that you could trade around for different cryptos,
or if you do have your brokerage account, you could sell some
stocks and put that into cryptos. And just be aware,
there are going to be some fees
when you're purchasing crypto and a lot of times they don't show you those fees up front.
It's usually a percentage of how much you are purchasing. So keep that
in mind when you are investing in cryptos and make sure and read that fine print. So, you know
exactly what the fees are depending on which brokerage company you’re going with.
And then the fourth thing that you want to do is actually choose
which cryptocurrency you want to purchase.
And since you are a beginner, I would recommend just sticking with the most popular cryptos.
So, either Bitcoin or Ethereum,
there are a ton of different cryptocurrencies to choose from,
but a lot of them are really, really risky
and I'm guessing you probably heard about overnight millionaires that have
invested in a certain type of cryptocurrency like Dogecoin.
But then, I'm not sure if you've heard of those that have lost thousands
or hundreds of thousands of dollars in cryptos over
night, because cryptos go up and down very,
very quickly, unlike the stock market,
which goes up and down, but the trend continues to go up.
Cryptos are all over the place.
It can be a thousand percent gain in one day and then 1000% lost the next day.
It can have really high spikes and really low dips,
very, very quickly. And there is not really a constant uptrend,
which makes them a really risky investment.
But if you were looking to diversify your investments,
this can be a way to do it. I have very little amount invested in cryptocurrencies
because I do feel like it is really risky.
There's lots of people that have lost a lot of money,
a lot of crypto because of the ability to steal that cryptocurrency
and while there are better standards getting in place,
I still find it to be a really risky investment.
So I'm not going to put the majority of my money in there.
I'm going to keep that in real estate
and in the stock market. And if you're wondering how to get started in real estate,
I have a video for you. I'll leave a link above and below.
And also, if you're wondering how I invest in the stock market,
I have a video about that.
So I'll leave a link above and below. And after you do purchase your crypto,
you want to make sure that you keep it safe. If you're using a
broker that supports investing in cryptos,
you can leave your crypto with your broker and hopefully they keep it safe for you.
It does have advantages. You don't have to figure out how to store that crypto offline
because if you did that you would have to have certain keys and not lose those keys.
Otherwise you will lose all of your crypto investments.
But if you are planning on investing a large amount in crypto,
then you may look at storage options that are not with that broker that you are using.
You could look at a non-custodial wallet,
and I'm not going to go into detail about that.
But you can purchase these on Amazon. And lots of
people are recommending certain ones out there so you can find a video about that,
but for now for beginners, if you're just getting started with crypto
and you just want to have a little bit of diversity in your investments, you
can just keep it online with your broker.
That is what I do. But if I decide to get more heavily invested in cryptocurrencies,
then I would look at another option.
And of course there are pros and cons to investing in cryptocurrencies.
One of the pros, and this is in particular with Bitcoin, is that Bitcoin has a limited supply
so it's not an endless supply. They will eventually run out of Bitcoins and that could
mean that the value of Bitcoin could continue to rise astronomically over time.
Also, some people don't trust the government or central banks.
So, by investing, or using crypto currency,
we are moving away from that, which could help with inflation
and people like that blockchain technology since it tracks all of the payments that
are made. And some think we are moving in the direction of cryptocurrencies.
So the earlier they get in, the better off
they are going to be. Because the dollar may lose its value
and there are ways to make some passive income by investing in cryptos.
Those are some of the pros of cryptocurrencies.
So let's talk about some of the cons of cryptos,
many cryptocurrencies are untested. They are still very new
and the blockchain technology that they use isn't widely accepted yet.
If that doesn't happen, then cryptos can eventually drop.
And like I mentioned before for short-term investors things can go up really fast,
but they can also go down really fast.
So you have the potential to lose a lot of money very very quickly
and these wild shifts in cryptos can kind of go against what cryptos represent.
For example, people might not use Bitcoin if they think it's going to drop a lot the next day.
Also the mining technology that they use takes a lot of power. For instance,
Bitcoin mining consumes more than twice as much power as all U.S.
residential lighting and granted they aren't all using the same type of mining,
but that's a lot of power they are using. Also governments
haven't really figured out how to handle cryptocurrency.
There can be a lot of regulatory changes that could
happen and that would cause the price of cryptos to drop.
So there are just a lot of unknowns with cryptocurrencies
and hopefully this gives you a basic idea of cryptocurrencies
and you really want to be careful when you are selecting certain cryptos. Comment below
and tell me if you are going to invest in cryptos or if you already have.
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Thanks so much for watching. I'll see you in the next video.