For Newbs only - What I learnt from my investment in Crypto Currency

The views and comments expressed in this article are solely mine and is not intended to lead or offend or solicit or credit or discredit any person or group or organization involved in Crypto currencies.

I am one of the most recent entrants in this arena, my interest in crypto currencies sparked after I spent some time understanding blockchain and some engaging conversation I had with my friend and former fellow Microsoft MVP Kunal Cheda, if you want to know more about block chain read my previous article Blockchain – Duh!! here.

Few months back I took my first cautious step ($100) into crypto currencies, like most (I assume) I like to review the heck out of something before I decide to spend/invest, Bitcoin had been leading the crypto currency front since 2008 and there are numerous alternatives called Altcoins in virtual circulation as well. From my first investment of $100 earlier this year till today, I have put in few hundred dollars more into various leading currencies and with the recent surge in crypto currencies I see a nice appreciation of my investment, all good but it begs the question - what exactly am I investing into? How can the surge be so dramatic? What is driving this surge? I got on my quest to read and research more, after a few weeks of researching, I believe that no one knows for sure (if you don’t agree read the first line at the top of the article). The pro community of Crypto currency cannot stop talking about how it’s the future and pump up your adrenaline and the boo community can’t stop talking about how it’s a bubble making you feel guilty about what you just did or were going to do. What I think I know, is that there is demand for crypto currencies and as long as there is demand (real or induced) it will continue to see the surge - economic common sense.

So what I learnt from my experience is that there are three models to get engaged with Crypto currencies.

1. Buying Crypto Currencies - You can buy crypto currencies from the market (use leading exchanges – google your way) but be wary on what currency you are buying. There is an increased surge in new coins thru an innovative funding process called ICO (Initial coin offering), I tend to stay away from them unless it’s backed by a large organization or platform, and one can scam the market with an ICO by offering a jazzy website promising a really cool idea.
2. Mining Crypto Currencies - Crypto currencies are digital assets and decentralized currencies like Bitcoin requires a vast system of computers to keep the network healthy and up to date, these computer systems get reward for doing that and the reward is in the form of crypto currency. Mining has become increasingly difficult and you need adequate computing power and electricity to be profitable. Mining can be done solo, in a group (called pool) or over cloud. Solo or group mining requires you to own and operate all the hardware and related infrastructure while with cloud mining you can buy processing power and for certain amount, duration and related fees and in exchange you earn rewards in the form of crypto currencies. If you are planning to mine, do your research, cloud mining market is also flooded with scam offers or Ponzi schemes and recently a very popular mining pool nicehash got hacked and bitcoins were stolen.
3. Lending / Investing / Trading Platforms - This to my knowledge is relatively new, new breed of platforms are emerging that promises high interest or returns on your crypto currencies investments.

The above is current at the time of writing this article, new models may be in the works or emerging.

Parting thoughts -

1. Being in the digital age, it’s probably ok to invest in crypto currencies. Pick a currency that you can research and understand and pick a model that suits you. Take ICOs with a pinch of salt.
2. Get in considering your money is going on a one way street.
3. Be wary of security, there is no insurance. If your wallet is hacked chances of getting your crypto currency back is almost zero.
4. Be careful and don’t be obsessed, it will be easy to get carried away after initial success.
5. There are one click options in the various models above to reinvest your earnings, read point 4 again please.
6. If you missed the boat, don’t worry, you are on land anyways. 

Would love to hear your views, comments and experiences on Crypto currencies.