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When Should I Start Investing in Bitcoin?

Is it too late?

After reading too many articles and having numerous conversations with friends, it appears too many individuals are focused on making a quick buck via Cryptocurrency, namely Bitcoin.

That’s why I decided to write this story; to shed light on this situation, and to hopefully provide clarity on Cryptocurrency in general.

In brief, it should be another asset that lives in your portfolio.

The fact of the matter is that Cryptocurrency investors are focused on the long haul. It’s not and never will be about making a quick dollar.

Moreover, the most successful investors never focus on the short-term volatility of an asset.

So what separates the good investors from the great ones (in general)?

The two concepts that great investors drill into their minds: 
1. Long-term Appreciation 
2. Cash-Flow Opportunities.

These two reign supreme, and contribute to one’s overall ROI, which is just a fancy term for the returns received from an investment.

Speaking of ROI, in my experience many individuals get confused about how to calculate an ROI. In truth, it’s a flexible term, and there are a variety of guidelines on how to calculate an ROI.

For this reason, whenever you plan on investing, I recommend figuring which ROI guidelines to use, given the asset. Determine which best suits your potential investment, and what seems appropriate.

*Be wary of not applying ROI standards that someone has used for one asset that may not necessarily apply to the assets you’re investing in.*

Also, it doesn’t have to be a trial and error sort of thing per say, try to figure out what makes sense given the potential investment.

For Startups, Seedinvest has excellent standards for an ROI. They use what’s called an IRR — one such guideline to calculate ROI.

For Real Estate head to Fundrise. They have a massive amount of resources to learn from if you’re considering an investment in Residential and Commercial Real Estate.

Additionally, if you so choose to use their platform, you can invest as little as $500. Fundrise will manage your portfolio, all you have to think about is transferring the money. Super simple to use and highly transparent.

These are only two types of assets, and are the ones I am currently focusing on at the moment, but don’t stop there if you plan on investing in the stock market; that’s an entirely differently ball-game.

Lastly, Bitcoin is unique in that it isn’t as established as its asset counterparts. So figuring out an ROI is more challenging.

What I will say is before investing in any coins, tokens, or ICO’s- make sure you do your due diligence by reading up on the whitepapers.

There is ample literature on each. Some are quite dense, but I can sum up the basics here:

There are two main “networks.”

Bitcoin & Ethereum

Both use “Blockchain.” Another fancy term for the software infrastructure through which the open ledger exists and transactions are executed.

The purpose of the Blockchain is primarily to ensure all the transactions, transfers, etc. between accounts are legitimate.
The networks, supported by Blockchain software infrastructure, serve as an Automated (genuinely automated) Clearing House (ACH).

So rather than humans inefficiently checking the legitimacy of transactions, the transactions are confirmed through the use of digital cryptography built into the Blockchain coding.

There’s much more to it if you’re interested in it. Don’t stop at my explanations, and there are numerous articles to help you understand what it is and how it works.

Here are a few that helped me:

Learn Blockchains by Building One by Daniel van Flymen.

Can I order some Blockchain? by Anıl Akarsu.

Making Money, Literally, in the Age of Bitcoin by Tess Rinearson.

Why Bitcoin is Different than other Cryptocurrencies by Jimmy Song.

These four should hold you over for a while :).

In summary:

It doesn’t matter when you start investing in bitcoin and other assets. Timing is a difficult thing to do across any asset class. In our busy lives, it’s difficult to find the time to keep tabs on every asset class, unless it’s your job to do so.

Hope this helps.

Thanks for reading.