Disclaimer: I am not making financial advice or suggesting where people should invest their money.
But I am sharing my excitement and knowledge about a mysterious topic of Chinese cryptocurrency with the hope of sparking an interest in you, dear reader. Why? Because it is the FUTURE.
To start, let’s answer your first and most dire question:
What is cryptocurrency?
Cryptocurrency, or crypto as I will be referring to it, is the “digital currency that can be used to buy goods and services.” Many companies have their own currencies or tokens that can be traded for services provided by that company.
Imagine Apple coming up with an Applecoin that allows you to buy apps from the Apple store. Basically, it’s online money.
Why has it become such a trend in the past few years? It’s been trendy to the point of memes like Dogecoin.
Just as paper currency flows through banks, crypto flows through blockchain to manage and record transactions. Unlike the banks that back the U.S. dollar or the Chinese renminbi, blockchain is a decentralized system.
Now I can hear the alarm bells going off from here. My father has spent his life investing in the stock market. He rolls his eyes at the mention of crypto, or as he likes to call it, “gambling.”
The older generation fails to see the innovation of crypto because it lacks the stability and safety they are used to. For the younger generation with nothing to lose, there may be a bigger risk with crypto, but there are also much greater rewards.
Let’s take Bitcoin for example. It is the internet equivalent of buying gold. Way back in 2016, each coin cost around $446.28. This was monumental for crypto at the time. Coins used to be $0.14 if you were lucky. Fast forward to 2021: a single Bitcoin goes for over $50,000.
The briefest summary I can give of why Bitcoin’s value grew so quickly is that crypto’s decentralized nature launches it into the future of investing. With mainstream companies like Tesla and Walmart investing in Bitcoin, its popularity has grown exponentially.
China has always been at the forefront of the technology movement. With WeChat, they already have digital systems to move around money.
By getting into crypto, they are moving the value of money online.
Crypto currently exists outside the traditional flow of money run by any government. China, however, plans on creating its own digital currency monitored by its central banks.
This will allow PBOC, China’s central bank, to track money flow more accurately than with their current paper money system.
China is taking steps to ensure that digital assets like crypto turn out real benefits in the physical economy. According to PBOC Vice-Governor Li Bo, “China currently sees crypto-assets as investment alternatives.”
They are working on improving the regulations surrounding crypto to make sure it smoothly runs with the Chinese economy.
However, we are still years away from the official rollout of a digital renminbi. With the current instability of cryptocurrency, the People’s Bank of China has made it clear that they currently don’t recognize digital currency as “real currency.”
While this is the stance of the People’s Bank today, I’m confident that it will shift with a more widely accepted crypto coin. I want to focus on a Chinese crypto coin that is out on the market today, already making digital waves.
VeChain (VET) is the world’s leading supply chain management company in providing blockchain solutions for businesses. Basically, it helps track things.
For example, VeChain is partnering with the Chinese government to help record and track vaccine production during the COVID-19 crisis. VET has an impressive number of national partners listed on its website.
Check out this comprehensive video on VeChain made by Coin Bureau.
Why do I need to be invested in crypto?
I see cryptocurrency as the future of money. Credit cards will be traded in for crypto coins. One day we are all going to have to be fluent in this digital language.
Why not get ahead?
One of the main benefits of crypto is its decentralized nature. All centralized banking systems keep us from our money.
We have to operate by their hours and pay their fees to move our money around. We are rewarded with a measly 0.05% off our own savings while they make millions.
By decentralizing our crypto, we put the power back into our own hands. We are in charge of where it goes, when it goes, and how it is able to do so. This is a monumental step towards empowering people with their own money.
However, if history repeats itself, I can see crypto becoming a male-dominated industry as it becomes more mainstream. Men who are already well-versed in the stock market are transitioning into crypto, closing a gate that tends to lock women out.
Crypto wasn’t meant to be this way. It was meant to be democratized. We are on the precipice of being put on an equal playing field when it comes to controlling our own money.
Crypto isn’t that difficult to understand, research, and get excited about. There is an entire side of TikTok dedicated to it!
How to get into crypto
Lastly, here is a simple and easy guide to get started in cryptocurrency.
1 Find a Crypto Exchange You Like
There are exchanges such as Binance and CoinBase. These places will help you convert your money into crypto and give you an extensive list of all the coins you can invest in.
Treat this as your marketplace. This is how you enter the world of crypto, trade your money/coins, and interact with live trading.
Just like a local street market, you wouldn’t keep all your money floating out in the open where someone could pickpocket you. So you will need a safe place for your coins.
2 Pick a Wallet to Keep Your Coins Safe
There are many different types of wallets. Hot wallets are ones for day-traders, people who make their living off of crypto.
These wallets are directly connected to the internet and let users quickly access and trade their coins rapidly.
Cold wallets are USB drives that are completely taken off the internet. They are the safest wallet but the most extreme.
For beginners who are still testing out the waters, I recommend a hot/cold wallet such as Exodus. This will keep your coins safe without a physical external drive.
3 Trust the process (Don’t FOMO)
The last piece of advice I can give from one newbie to the other is: don’t get FOMO. When you start investing, you get the urge to ride every new wave, invest in the hottest coin, and jump on the bandwagon.
Fight that urge.
Like all trading, numbers are going to go up and down. Don’t get freaked out and drop all trades because your investments dip a little.
Research your coins and trust in the business behind them. Fight the urge to check your numbers daily. Play the long game.
See what happens in a month or two before pulling your investments out.
With that, I’ve exhausted my crypto knowledge and enthusiasm. I hope you learned a little more about this complex digital world. Happy investing!