What Is Cryptocurrency? A Simple Guide To Understanding …

A pile of coins representing Bitcoin cryptocurrency sit grouped together in the U.K. Photographer:... [+] Chris Ratcliffe/Bloomberg

I am constantly running into techies and entrepreneurs who have made a ton of money by investing in cryptocurrencies. I dont usually get into something unless Ive educated myself on it and feel very comfortable with the industry, but to be honest, I havent experienced this much FOMO (fear of missing out) in a while.

Cryptocurrency just wasnt an area I jumped into early on because I had such a lack of knowledge about it. However, as an entrepreneur, its really important to make an effort to learn more so you dont miss out on a new opportunity. Recently, Ive made it a point to find out as much as possible about cryptocurrency so I can make more informed investments in the future.

Now that Im caught up and feel more comfortable, I want to pay it forward and help other entrepreneurs and potential investors who might also be hesitant to dive into the world of digital currency. Here are some ways to prepare before jumping at the next ICO:

1. Stay Updated On Timely News

Its taken me some time to get caught up on crypto news because its always changing. It seems as if theres a new form of digital currency almost every day, from bitcoin to Ethereum, Dogecoin to Garlicoin, its tough to keep up. With crytocurrency being such a new industry, any change in the crypto world could skyrocket the value of your investment or send it into a tailspin. Thats why Ive spent the last few months building up my resources for staying informed. Here are a few of my favorites:

Coinzy:Coinzyis a daily newsletter of top-curated articles related to the bitcoin and crypto world. Trust me, its worth a sign-up because everybody and their grandma is covering the space in some way. I spend the advertised eight minutes a day reading the newsletter, and I love it. Its a great way to consistently get the education you need so you arent just going off of what the hip tech guy told you at the last conference.

The Bad Crypto Podcast:I know these two wild and crazy guys personally, so Im probably biased, but Joel Comm and Travis Wright have the energy and personality it takes to make an entertaining podcast.The Bad Crypto Podcastis a newer podcast, but it already has more than 4 million downloads and is growing fast. Ive learned a decent amount from listening to them, so its a good resource and a fun listen.

Tech events:Cryptocurrency-focused events may not be the best use of your time; theyre typically populated by hardcore blockchain enthusiasts and might be too advanced for those just looking for a good investment opportunity. Instead, I recommend going to tech andleadership conferenceslike Collision or Web Summit. These events are great for talking to other entrepreneurs and leaders who have a similar interest in the crypto world and many who have already been successful investing in it.

2. Take Baby Steps

Tim Draper is one of the more knowledgeable people in the cryptocurrency space and has made some big calls that have turned out to be right. He offers some great advice that Id like to pass on to you.He says:

The way I look at getting started with cryptocurrency is to get involved a little at a time. Id suggest purchasing a small amount of cryptocurrency onCoinbaseor to put some crypto on a ledger. A ledger is a hardware wallet, so if you are worried about someone taking your cryptocurrency you can put it there.

Its impossible to understand cryptocurrencies entirely right off the bat. I cant tell you how many stories Ive heard of people losing money because they misplaced or locked themselves out of their own digital wallets. Its best to educate yourself little by little.

Start by learning about ledgers, wallets, exchanges, and how to buy and sell. Invest a little money to help yourself understand how each of them works and how they interact with each other. When you feel comfortable with the structure of cryptocurrency investment, invest more.

3. Talk With Someone You Trust

Try to have as many conversations as you can withpeople you trustabout what you should do. Cryptocurrency is all the rage, so its not hard to find people talking about it. In my experience, though, Ive found that many who talk a big game are fluffing their successes a bit.

Thats why its so important to seek advice from people you know who know their stuff. Reach out to friends, family members, co-workers, or financial advisors who have experience in cryptocurrency and crypto investments. Find out what worked, what didnt, and what guidance they can offer. They may not know everything there is to know, but you can trust theyll share honest, genuine advice with you, and thats a place to start.

Though cryptocurrency is daunting, its an exciting and potentially world-changing technology. I was extremely scared when I started investing in it, but as with most things, the more you educate yourself with good sources, the more comfortable youll feel. Utilizing these tips and resources to get on board the cryptocurrency train now may not only be a smart investment, but could also prepare you for a future where these currencies are more widely accepted and used.

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What Is Cryptocurrency? A Simple Guide To Understanding ...