Cryptocurrencies | Investment or Speculation

cryptocurrency

cryptocurrency

cryptocurrency

cryptocurrency

Cryptocurrencies such as Bitcoin, Ethereum, Litecoin and a growing list of many others are attracting widespread interest, no longer completely concentrated among technologists and futurists. Cryptocurrency interest is penetrating into the mainstream.

Bitcoin was the first and became the most widely recognized cryptocurrency, with first a trickle and then a flood of followers. Notably, Ethereum came with built in capability geared toward a wide range of additional functionality other than simple value storage, namely smart contracts and a platform for third party cryptocurrency coins to be launched from Etherium. Many such third party cryptocurrency coins have been launched this way with many more to come.

Exchanges exist where cryptocurrencies can be exchanged for other cryptocurrencies or for cash. With this market, the value comparison between cryptocurrencies and cash can be monitored. Cryptocurrencies have been notoriously unstable in value compared to traditional government issued currencies, with their comparative values against these currencies skyrocketing by tens and hundreds of percents in very short periods of time such as minutes, hours and small numbers of days. While the general trend as cryptocurrencies began penetrating the mainstream was sharply rising market values, sharp drops also began to occur.

Steep rises in value, against currencies that are understood by the mainstream because we all use them every day and they have day to day stable value, have been enticing more and more people to buy cryptocurrencies with hopes of continuing sharp value increases. But are people investing in these cryptocurrencies, or are they speculating, and what's the difference?

On one end of the spectrum is a lack of knowledge or understanding of cryptocurrencies, what they really are, how they work, or what underlying value they actually provide or don't provide to the world and their owners (other than just what their market value may be at any moment). Any resources put into anything under this set of conditions, except learning, is pure speculation. To invest, one needs to learn and understand first. Investing in cryptocurrencies comes after learning more and understanding them better. Speculating sometimes makes random people wealthy, but over time makes more people poor. Investing is the opposite. Even a good investment can go bad for unexpected reasons, but a true investor usually becomes better off by investing. Whether cryptocurrencies are speculation or investment to you, depends more upon you than upon the cryptocurrencies.

Cryptocurrency is related to Rule of 72, investing, speculating, blockchains, and many other activities and subjects.

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