PREAMBLE ON CRYPTOCURRENCIES
Before I talk to you about the rise and democratization of new virtual currency, I would like to remind you of a few things on the subject, and there are several videos about it on our YouTube channel.
Already, it is important to understand that exchanging cryptocurrencies is done in a decentralized universe that works through a system called cryptocurrency mining. That is to say, there is no longer a need for trusted third parties (such as banks, PayPal or governments) to validate contracts.
Exchanging cryptocurrencies is done in a “pear to pear” way, in other words: from individual to individual. It is the so-called “miners” who validate the operations . Cryptocurrency mining secures the network and brings money to miners.
After making a first deposit of money on the site of a broker that you have carefully chosen, the storage of your crypto will be done on what is called a ” wallet “, translation: a digital wallet.
If you want to get into cryptocurrency trading and become a crypto trader, here you will find a lot of useful information.
netinvestissement recommends 😀 you which cryptocurrencies to invest in 2022?
1. Bitcoin: the king of crypto!
Yes I know I’m pushing an open door. Obviously, you do not learn anything and you suspected it but I told you, I must be objective so if we talk about cryptocurrencies and digital asset wallet, we can not not talk about bitcoin and consequently, we can not not have Bitcoin in his wallet.
And this in the end regardless of its price. 50K, 60K, 100K, 150K or 20K it doesn’t matter. Bitcoin is the most incredible digital store of value in the world and its value will most certainly increase for two fundamental reasons:
- Its rarity: there will never be more than 21 million Bitcoins…. Never. Unlike the euro or the dollar that you can print the cash register thoroughly without it seeming to worry anyone
- Its adoption: the more individuals who want bitcoin, the more its price will increase. This is obvious in theory at least, but it is good to remember it, because behind the fantasies about volatility around bitcoin, too many are still those who forget that this market is also based on the fundamentals of supply and demand.
Currently the price of bitcoin is at 56,559 euros , performance achieved following an announcement by the SEC (the French AMF) indicating the creation of a stock market index that includes the performance of Bitcoin. It is considered digital gold and is thereforeseen more and more as a store of value: you have to buy bitcoin and keep it in your crypto wallet. Although one country, El Salvador, has made it its national currency (proof that nothing is impossible!).
To buy bitcoin and other cryptocurrencies, you need to register on a cryptocurrency platform. The choice of broker is important: fees, available cryptocurrencies, the possibility of having payment cards, leverage effects, CFDs (or “contracts for difference”, which allow you to take a position on stocks, stock market index or commodity by limiting losses) etc … vary from one cryptocurrency platform to another.
HOW MUCH : 30-50% of your wallet invested in cryptocurrencies can be invested in Bitcoin. Why such a proportion? Because it is certainly the cryptocurrency that has the highest probability of success over time and the lowest probability of disappearing. Although the price of bitcoin is volatile, think of it as your “wallet fund” cryptocurrency
If you are interested in Bitcoin, you have certainly heard of Litecoin. This crypto was created from the Bitcoin software by making some technical changes. It is considered digital money, because it is much less rare than Bitcoin: its quantity is limited to 84 million. Its purpose is to be used as a common currency thanks to its high speed and low fees.
As examples, the video game company Atari has launched its “Atari Token” and mainly uses Litecoin in exchange for its tokens. The American soccer team miami Dolphins has also adopted this crypto as its official currency.2. ETH: before ETH 2.0
If you are lucky enough to be able to buy ETH before the release of ETH 2.0 then do not hesitate.
ETH 2.0 is THE big, very big and major evolution expected by the entire cryptocurrency ecosystem. Ethereum teams, led by Vitalik Buterin, the founder, have been working on improving their blockchain for several years.
Today, the ERC20 blockchain (ether therefore) is widely used but it is still expensive in fees, energy intensive and limited in number of transactions.
For example, the Visa bank card network carries out 1736 transactions per second, the Bitcoin network will carry out 4 per second. The update with the release of ETH 2.0 will literally revolutionize all this: 90% less fees, 10 times faster and 90% less polluting and energy-consuming. In short, paradise.
Although we do not yet know precisely when the release of ETH 2.0 is planned, we do know that the first update of ETH 2.0 should take place in the spring of 2022and phase 2, heralding the definitive release of the evolution is expected at the end of 2022, provided that they do not experience further delays.
It should also be noted that to date the Ethereum blockchain hosts a large part of smart contracts (or smart contracts) which represents one of the most important features of Ethereum and whose applications are infinite. An example of a smart contract project: imagine that you do without an intermediary (such as AirBnB) to do seasonal rentals and that all exchanges are from individual to individual. This may one day be possible thanks to a smart contract.
HOW MUCH : with Bitcoin, Ether is undoubtedly the second major crypto to hold, we can say that it is a promising currency. You can consider having 30 to 40% of it in your digital asset portfolio, especially if you had the chance to read this guide before the release of ETH 2.0 so.3. ADA, DOT, SOL: the alternative trio
Perhaps I must remind you that behind the dreams and fantasies that fuel the world of cryptocurrencies, there is real, operational and radically disruptive technology. Ether is the first ambassador.
But Eth has serious competitors who also want their share of the huge cake of the new value that is being created on the Internet 3.0. There are many competitors, but the three main ones are:
- Cardano with its cryptocurrency ADA
- Polkadot: with its crypto DOT
- Solana : SOL
There are a multitude of new currencies, such as Uniswap (UNI) but I really invite you to focus on these three first.
The year 2021 was marked by the vertical take-off of the price of the crypto Solana which went from 1.37 € to 175 € …
Cardano and Polkadot develop and operate very high velocity and high value technologies. At the time of writing this guide, no one yet knows who will be the big winner in this new war of value.
HOW MUCH : I recommend mixing 10-15% on these three cryptocurrencies.4. RIPPLE
Another cryptocurrency as monitored as strategic in the challenges of the decentralization of global finance, the Ripple, symbolized by the sign XRP. XRP is so “scary” to central bodies like central banks that the SEC has launched a real witch hunt to symbolically kill Ripple.
What for? simply because Ripple technology is 100 times more efficient and less expensive than the tools and technologies currently used by banking sectors around the world.