Crypto Is The Next New Side Gig For ‘Stay At Home’, Day Trading Moms
One of my aunts is a super trader. She has her investments locked away and they provide her with a very comfortable lifestyle. The kids are settled in different countries and the house is paid for. So she has a few hours a day to herself and a very active mind. What my aunt also has is a need to be super engaged throughout the day. She tried a reading club and morning walks with her neighbors but got bored before the month was out. That’s when she was bitten by the day trading bug.
She had some good months and a few horrific ones before she discovered the risk levels she was comfortable with. My aunt has been trading stocks for herself for almost a decade and her daily reading led her to stumble across cryptocurrencies (you couldn’t avoid crypto these days if you tried!). She has been interested in it for a while but not as a miner. What caught her eye was the seemingly never-ending, upward trajectory which the trader in her said would reverse direction at some point. And it has done so in a spectacular fashion. Since our family is stuffed to the gills with finance and tech types there has never been a shortage of opinion for her.
What broadened this conversation recently were a few queries I received from people I met over dinner and at birthday parties I have to take my boy to. There is at least one question I get about Bitcoin every time I am in a social gathering. What’s different is the level of interest is from ‘stay at home’ moms and folks who want to buy Bitcoin to ‘see how it goes’. So here is a list of some of the questions I get and bite-sized (perhaps simplistic) answers to go with them.
What is Bitcoin?
The question here is different from what is asked. The real question is ‘what is a cryptocurrency’? Well, here is what it is not:
· It is not a fiat currency. Cryptocurrencies are not backed by governments which means they are not legal tender.
· Its is not regulated.
· You can’t use a cryptocurrency as a medium of exchange (not commonly, anyway).
I guess the closest cryptocurrencies come to a traditional currency is that they are a store of value but that premise is untested over a long time horizon.
A cryptocurrency is a digital token generated and protected by mathematical operations. These tokens are generated by computers that run the ledgers that verify the transactions for that particular cryptocurrency. Each computer that runs a ledger has a record of all transactions that have ever taken place and there is no restriction on who can download and run a ledger. This makes the entire system distributed and invulnerable (yes, I know you can’t use that word when it comes to computers) to tampering as an attacker would have to change the entries identically in each ledger. People whose computers run these ledgers and perform the mathematical calculations are compensated by being issued tokens of that cryptocurrency. The more powerful your computing setup, the more operations you can run and the greater your reward.
So, what is Bitcoin?
Bitcoin is the best known cryptocurrency there is today. The second most famous is Ethereum.
How do I buy a cryptocurrency?
You can buy from exchanges like Coinbase or BTC Markets. There are many others.
How do I safely store my newly purchased cryptocurrency?
Be very careful here and make multiple copies to be stored in different places you will not forget. Get one or more (ideally more than one) of these:
DO NOT store it on anything that has an Internet connection. This also means do not store it in an app on your phone or on your computer.
Can I use cryptocurrency for everyday purchases?
Not yet, or not in most places. It is not a popular medium of exchange yet.
So why should I even buy Bitcoin or Ethereum or some other cryptocurrency?
There are two kinds of people who buy cryptocurrencies:
Which category do you fall under? Each of these can be a long article or discussion on its own.
Back to my aunt. She is now putting a small percentage (single digits) of the interest from her investments into Bitcoin and Ethereum. Her plan is to see what this thing results in after two to three years. I don’t have evidence but I am pretty sure she isn’t the only one of her type.
Crypto Will Become A New Side Gig For ‘Stay At Home’, Day Trading Moms was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.