Bitcoin, Litecoin, Ether Oh My!
Why Millennials Should Consider Investing In Digital Currencies
Hey you! Yeah, millennial, you!
What is your investment strategy?
For those of you graduating college and entering the workforce, this question is about to become commonplace in your life. You might hear this from employers, colleagues and your parent’s alike ad nauseam. The reality is that for — maybe — the first time in your life, you are making actual money. No doubt, it will feel great to not have to search between the couch cushions for beer money and great to afford to treat yourself to a nice meal. Yet, if you take the time to develop a sound investment strategy you may enable that beer money to convert into Champagne money. (If that’s your style, of course).
Alternatively, for those of you who have been on the daily grind for some time, you have probably wrestled with this question for years. And unless your work in finance or make the markets a priority/hobby, you still might struggle to provide a solid answer.
We all know — or at least should — about the law of compounding interest. It has been proven in finance classes and investment seminars around the globe that investing as little as $50 a month in your 20s has greater payoff over your lifetime then investing thousands when you are in your 40s. Simply stated, if you want to properly position yourself for retirement, you need to start investing early and often.
Now, investing is hard, don’t get me wrong. And nobody wants to dedicate time to develop an investing strategy when they are a full-time employee trying to maintain a solid work-life balance. I mean, between weekend brunches, exercise classes and sleeping, who really has time to sit down and think about their investment strategy anyway??
Well, I — clearly because I am writing this piece — think it is worthwhile for you to dedicate ample time to address the proposed question; however, I am not here to guide you through this process. Rather, my aim is to illuminate your eyes to an alternative form of investment that is worth strong consideration as a part of your strategy. That investment, of course, is into digital currencies. I.E: Bitcoin, Ethereum and the alike.
To most people without a technical background, Bitcoin, the Blockchain and the digital currency movement is unchartered water and unheard of territory. Talking to someone well-versed in the Blockchain can feel overwhelming and foreign; the Blockchain is a new technology and digital currency is equally difficult to conceptualize when Credit Cards ultimately feel digital today. However, at their core, these advents to technology will completely transform businesses and industries as we know them today. Exactly how is yet to be determined, but a quick google search will yield the reality: this technology is imminent.
To that extent, I will now ask you another question: How often are you faced with the opportunity to invest money into an entirely nascent technology? Maybe once per generation. Take the 90s internet as a prime example — an entirely new technology came into being that complete revolutionized businesses and our day to day lives. As a toddler, I was far more obsessed with Thomas the Tank Engine than I was with investing. However, that example and concept of a foundational technology alone should be reason enough for a savvy, technologically minded millennial to invest. Yet, I’ll further articulate my point through an analogy.
Imagine the first person who struck oil. At the time, odds are they inherently understood that what was just discovered would be important; however, at the same time they probably had very little clue how as to how that the dark goop erupting from the ground would be utilized. Eventually, people grew to learn that oil had various use cases across multiple industries. As more use cases developed, the more important a commodity oil became to society.
Blockchain is like oil. People know it is going to be used for something. It is going to support multiple industries and people are starting to identify valid use cases. We just aren’t quite there, yet. In the analogy above, digital currencies represent the components that make up oil; they are the tools that need be leveraged in order to maximize oil’s potential. This symbiotic relationship between the digital tokens and the technology itself are what makes this industry so appealing. Imagine being able to invest in oil at its outset, that is the opportunity you have today.
Now, I am not saying this a foolproof investment. As with any new technology and industry there are risks involved in addition to barriers to mainstream adoption. Yet, millennials are the at the perfect juncture in their lives to make risky investments. Unlike our parents, we have a much higher tolerance for risk. And losing money in our savings today is a lot easier to deal with when you have a whole career of earnings ahead of you.
However, investing in digital currencies successfully is more than simply investing in digital currency. If you don’t know what you are doing in this industry you can lose your investment as quickly as you deposit it. Not only do you need the technical understanding to send money back and forth via your digital wallet, but you also need a broad understanding of what currencies are viable investments and which are just technological veils. Exchanges such as Coinbase make it easy to invest in the Big 3 currencies (BTC, ETH, LTC), but don’t offer an opportunity to invest in smaller, promising tokens. On a high-level, the best guidance I have for newcomers in Digital Currencies is to get in early, deposit money often, and most importantly, diversify your investments.
If your interest has been peaked towards digital currencies and their investment potential, but you don’t know where to begin, feel free to contact me at firstname.lastname@example.org. I would be more than happy to answer your questions and help you learn more about the decentralized future.
Since the original authoring of this article, Bitcoin and Ethereum have been gaining so much momentum lately that notable business publications such as CNBC, MSNBC, Forbes publishing articles and mentions about digital currencies daily.
Current USD Prices of One Token of the Big 3 (5/24 @ 10:33PM CST)
*Jacob holds a position in multiple Digital Currencies including BTC, ETH and LTC. This post is in no way intended to promote the interest towards his investments, but educate others on this emerging alternative investment.