Crypto Academy

What is stacking?

What is stacking?

4 min reading

Cryptocurrency and savings account. Interesting discovery!

What is stacking

What is stacking?

If you have an overview of what a savings account is and how it works, you should be able to understand what cryptocurrency stacking is. Stacking is the act of stacking or blocking  funds in a cryptocurrency wallet for the sole purpose of helping keep the proof-of-stake blockchain system running. This activity is somewhat similar to crypto mining because it helps the network reach consensus and also rewards the users who participate in it. So you see this is a win-win situation. Before we get into the full stacking process, we need to understand what Proof of Stake (PoS) is.

This is one of the two main ways to achieve consensus on the blockchain. Simply put, this is one of the ways to validate the blockchain. When a transaction is sent to the network, the nodes on the network validate the transaction to ensure that the person has enough tokens or that it will not damage the network. If this has been verified and approved, transactions are added to the blockchain. Proof of Stake originated during the proof of work algorithm, and it is seen as an energy-saving approach to reach consensus. Proof of Stake offers many benefits, to the extent that several major blockchains have switched to Proof of Stake.

What is the stacking process?

It simply means that the nodes put their coins or tokens into the game to take part in the network by creating a block. The network’s reward is proportional to the size of the invested bet. However, some proof of stake allows anyone to take part in the process if a sufficient stake has been invested.

Stacking against savings

Today, when a person wants to make a profit on his investment, he quickly thinks about a savings account, which is offered by most banks and which offers a regular interest rate on his savings.  However, depending on your country, these savings accounts cannot exceed 2% of actual savings, and they never exceed inflation rates in most countries. Banks offer this percentage because your savings are used to generate their own income. 

For example, they can lend or invest your money. For comparison, with stacking, you can get up to 5% of the invested amount.

To start stacking, you need to have free funds to buy coins and the ability to freeze them on a special deposit smart contract for an extended period of time.  For example, for stacking DASH you need 1,000 coins, and for Ethereum 2.0, you will need at least 32 ETH. The minimum number of coins to participate is determined by each cryptocurrency individually. But the more coins you allocate for stacking, the higher your chances of creating a new block in the network. Unlike mining, crypto-stacking does not require large expenditures on equipment (ASICs). Once you have added coins to your wallet on the PoS algorithm, then you need to wait for the blocks to appear, on average it is 1-2 days. The PoS protocol may include different algorithms to select a node to add a block. Each cryptocurrency uses its own methods and rules, which, according to the developers, best support their network. People with different capital can participate in stacking. It is also necessary to pledge some amount of coins for collateral. It is because of these complications that today’s stacking through providers (who perform all technical actions for the user) is so popular and even more so is fixed stacking, for which you just need to keep purchased assets in the wallet of the exchange.

Plus, if we compare the time spent on each investment method, it is clear that stacking is the fastest method. The cryptocurrency process usually takes a few seconds, while sometimes it takes several days to open a savings account with a bank, which of course can still be declined. These comparisons allow us to see that the rate of cryptocurrency is much simpler and more profitable.

Conclusions

Investing $100 in Bitcoin

Investing $100 in Bitcoin

5 min reading

Want to invest only $100 in Bitcoin but you are not sure if it’s possible to do this? It’s that time to find out the answer.

Can I invest only 100 in bitcoin_

Can you invest only $100 in Bitcoin?

Today, many newcomers on the crypto market have a lot of questions about the crypto industry. Many people don’t know how much money they should have to start trading cryptocurrency. There are doubts and fears around the amount of money to trade and the platform to start. But the most difficult task is not to lose the starting capital. All in all, is it possible to invest $100 in bitcoin and gain a profit? Let’s figure it out in this article.

Features of the crypto market

First of all, keep in mind that trading is a quite risky way of earning money, requiring special knowledge and skills. Trading crypto-currency can be dangerous for newbies without a special knowledge-based approach as crypto-assets are highly volatile. On the other hand, high fluctuations in the value of digital money not only allow users to quickly lose capital but also multiply it.

Spot market

Many financial experts advise newbies to begin their cryptocurrency trading experience on the spot market. This will provide you with the opportunity to become acquainted with technical analysis, test different trading strategies without exposing your funds to high risks. Furthermore, experts believe that you should invest the sum of money you are ready to lose and do not start with a lot of cash. At the same time, your investments should be enough to trade for a long time in order to be able to improve your trading skills and discover how to operate on the crypto-currency market. 

How to start?

It is believed that $100-200 is enough to explore the market’s functioning features. At the beginning of your trading experience, running after the big profits is a bad idea as you will just waste your energy and desire to trade which will probably shatter your psychological stability. At the initial stage, the main task should be to discover the approach to trading and a trading strategy, profitable enough to bring you vast amounts in the future. 

DCA strategy

Finding the perfect moment to buy bitcoin is literally impossible. Whatever price a trader buys an asset at, it is very likely to fall before entering a long-term growth phase. Therefore, some investors use an “averaging” strategy. This strategy works like this: the user divides his capital into several parts and buys bitcoins with them over time. This way, if the price of the asset falls, you can use this as an opportunity and buy more coins. In this case, the average purchase price of BTC will go down. The best option is to invest $10 in BTC every day. 

At the first successful experience, the average return should be analyzed as the average return obtained while working with a small deposit. Experts also recommend setting a goal that should be achieved in a year or a month. For example, if the yield is 10% per month, the deposit must be $10,000 to receive $1000. 

Theoretically, it would be perfect to trade with an income of 10%, as the income will grow depending on the deposit. But there are no perfect situations in trading crypto-currency, so you should stick to your chosen strategy for long distances.

As experts explain, one of the main crypto market advantages is that users do not need a large start-up capital to start with. In their opinion, a novice trader will only need 100 dollars to buy some crypto on the stock exchange and start trading using the chosen strategy. On the one hand, this amount is sufficient to buy crypto-currency, and on the other hand – not so large as to be afraid to lose it. People must realize that without experience, knowledge, and practice, they may not succeed.

The amount for cryptocurrency trading should be carefully considered to avoid risks without using leverage. Let’s give an example – $13,7 thousand is enough to trade Bitcoin “1 to 1”, or about $400 at the current exchange rate to buy ETH. The more funds in the account, the more comfortable and safer trading will be, and the fewer funds, the greater the amount of borrowing is needed to buy or sell digital assets.

However, trading can be profitable and effective for the experienced trader, having some knowledge in the field of financial analysis. But a newbie needs to learn how to control risks and avoid losses in order to reach a desirable income. Therefore, the initial amount of funds should be sufficient and correlate with the current value of the assets that the investor is going to trade.

Conclusions

Elon Musk and crypto-currency industry

Elon Musk

5 min reading

That’s interesting what impact does Elon Musk have on the crypto world, and why he and other manufacturers are investing so much?

Elon Musk

Why are Musk and other manufacturers investing
so much?

Since its inception, bitcoin has always been at the top of the crypto-currency ladder. Other cryptocurrencies have been created, all with the goal of surpassing bitcoin. But since then, no one has succeeded. Here is a well-known businessman investing in bitcoin, taking it to another level in the crypto-currency market. Why this decision? This article will tell you more about it.

Elon Musk and the crypto industry

Elon Musk, the owner of the well-known electric car company Tesla, recently invested $ 1.5 billion in bitcoin. This has led to an increase in the value of this cryptocurrency. Based on his prediction, he believes that cryptocurrencies will soon be used for payments, given the rapid development of technology. He also invested in this cryptocurrency to diversify the payment methods for purchasing electric vehicles. However, Musk did not specify when he will start accepting these payments or in which countries buyers will be able to pay for cars using cryptocurrencies. 

BTC investors 

It would be interesting to note that Musk is not the only multi-billionaire to add a Bitcoin record. We also have MicroStrategy, an American software company that bought about $ 250 million worth of bitcoins and is now valued at $ 3.1 billion. We also have top Wallstreet investors like Stanley Druckenmiller and Paul Tudor Jones who have adopted Bitcoin.

Why?

So what are the reasons that prompted him, like many other industries, to get into cryptocurrency? As part of the plan, Tesla says it will invest in alternative reserve assets, including digital assets and other assets. His bitcoin investment is due to the fact that he can acquire and store digital assets from time to time. 

Besides, Tesla is considering adopting bitcoin as a form of payment for its products in the future. 

With a multi-billion dollar company with cryptocurrencies likely to dominate in the near future, Tesla’s investment is a way to diversify its cash and cash equivalents. Tesla’s investment is a vehicle for diversifying cash and cash equivalents to give the industry some flexibility and thus maximize cash returns that are not required to maintain adequate liquidity.

Prospects

Moreover, for many proponents, cryptocurrencies represent the future of payment systems. Elon Musk expressed the opinion that investing in bitcoin is not much better than owning regular money, but even that small difference made it the best asset for keeping savings. Musk sees Bitcoin as a good thing as it is poised to gain widespread acceptance among mainstream financiers. 

Investing in cryptocurrencies can now be compared to accumulating wealth. However, this does not guarantee that Tesla will be able to avoid the depreciation of its investment in Bitcoin stock over the life of the investment. If the value of bitcoin continues to rise, the profits generated from the position could generate much-needed revenue for the electric vehicle manufacturer.

In short, the reason Tesla went into cryptocurrencies is that its investment policy is being updated, which gives it the ability to diversify and maximize its return on untapped cash. Cryptocurrency is also called the money of the future.

Conclusions

Invest all savings in Bitcoin

Invest savings in Bitcoin

6 min reading

You want to increase your savings with cryptocurrency? How to do it and not to lose money? We will help you to understand it.

Invest all savings into bitcoin

Can I invest all my savings in Bitcoin?

For many novice traders, investing in cryptocurrency is not easy to understand. But at the same time, some experienced investors earn money and grow their savings with the help of cryptocurrency. As the price of cryptocurrencies is very volatile, you must first decide how much you can afford to lose. When the price of an asset goes up, it can go down, and vice versa. And therefore the risk of losing savings is possible.

Decide how much you want to invest

You need to decide which assets you want to invest in, but it is better to choose several cryptocurrencies. Experienced digital currency traders know that investing in only one currency is very risky. To build your portfolio, you must analyze the price charts and the market situations. To invest effectively, multi-level analysis of the stock market must be carried out. Depending on the volume and duration of the investment, two main approaches are used: technical analysis and fundamental analysis.

What to take into account

Both methods are equally indicative of market conditions and complement each other. Technical analysis forecasts future price movements based on an analysis of past price changes. It is based on analysis of price time series, most frequently on charts of different timeframes. In addition, it uses information about trading volumes and other important statistical data. Fundamental analysis is used to examine the financial and economic condition of industries, individual companies,  and their investment attractiveness. It is also used to determine the real or “fair” value of securities with a high degree of certainty.

Investment into bitcoin

Bitcoin is for sure the most popular crypto. Bitcoin is now in fact an international currency, which is used by its holders, like any other, for settlement, purchases, and investment of funds. A distinguishing feature of Bitcoin is that it is created based on blockchain technology and is not presented in the form of cash. 

The Blockchain is a huge database in which all operations (transactions) are recorded, where each subsequent operation is linked to the previous one. The main advantage of this system is that the information about all transactions is distributed to thousands of computers on the network. It is believed that this ensures that Bitcoin cannot be counterfeited.

Why bitcoin?

There are a number of reasons why people decide to invest in Bitcoin. To start with, BTC has a leading position and has long been globally recognized in the cryptocurrency market. This cryptocurrency is constantly growing and is sustainable itself. Bitcoin is also liquid and volatile. But it is worth remembering that in addition to BTC, there are many more cryptocurrencies, and you also need to invest some time on it to understand the underlying project and decide if it is worth selecting them in your portfolio. Do not forget that in order to start investing in cryptocurrency, you first need to study several investment strategies that will help you in lowering risks and losses. Now let’s take a look at the strategies. The strategy of familiarity with portfolio investments – an investor is just starting to interact with portfolio investments and is being cautious. The strategy of conservatism – an investor seeks to maintain balance in the investment portfolio. Diversification strategy – an investor reallocates assets and resources to different investment portfolios to make them more efficient. Liquidity strategy – an investor chooses the most attractive projects with high liquidity.

Your crypto portfolio

All strategies use two key metrics: profitability and risk. There is also a third metric, liquidity. Consider portfolios in developed capital markets with large trading volumes. As a result, a portfolio is shaped in the way these criteria are managed. So, what types of portfolios exist? Let’s start with Growth portfolio. This is based on a strategy of seeking out and including stocks of growth companies. It is made up of stocks in companies that have shown maximum growth in recent periods. A portfolio of undervalued companies – formed shares of undervalued companies that have the potential to grow in market value. The financial condition is assessed using the following ratios: liquidity, profitability, turnover, solvency. There is also such a portfolio type as fixed income and minimal risk portfolio. This investment portfolio includes assets that provide a fixed level of return most commonly: bonds, dividend stocks. “All season portfolio” will yield a return irrespective of the economic situation on the market. It may include equities, government bonds, real estate, commodity futures. And last but not least, index-based portfolio strategy. It consists of following a market index.

You must choose the method through which you can purchase crypto tokens. It is necessary to buy cryptocurrency only on serious platforms with a strong reputation that guarantees the safety of your financial transactions. 

You can start buying bitcoin in small amounts. You can make money with cryptocurrency in different ways: actively trade digital coins or choose to invest with long-term goals. Another, even more, passive option is mining, but it is quite expensive in terms of hardware and energy consumption. All options have their advantages and disadvantages according to your budget.

Reading the news is not enough to start investing in cryptocurrency properly. It requires at least basic technical analysis skills. This will help you keep your savings and increase your income.

Conclusions