As Bitcoin, Litecoin, Dogecoin, etc. are becoming more popular there is a growing community that mainly focuses on the use of these cryptocurrencies for online transactions.
However, it seems that everyone is trying to get in on this new trend without thinking about what the best way to use crypto really is. There are definitely some uses for cryptos like Bitcoin and its cousins (like Ethereum) but not all transactions should be done with them. Here I will make a list of things you should consider when using cryptocurrencies because not everything works out as well as expected when doing business in them:
1) First off would obviously be to ask yourself why you want to know how much money you can make from mining Ethereum. If you are using cryptos just because they are the ‘latest cool thing’ then maybe consider changing your mind. Just like anything that starts out popular, after a while, everyone will get bored of it and it will go away so keep in mind what you would do if this did happen. Crypto trading might be a fun time to spend similarly to a casino, however, it can also be an investing opportunity for the future.
2) The next step is to see why you want to use cryptocurrencies. What exactly is so great about them? Are they really better than regular fiat or am I blinded by the idea behind cryptos and not seeing their flaws?
Always remember: nothing is perfect and even bitcoin has its downfalls which we all know about (such as slow transactions).
3) Think about how much money you actually want to spend on mining equipment, trading fees, and more.
Just a little side-note: trading on exchanges will always have some sort of fee so make sure you really want to use cryptocurrencies before spending any money on them.
4) Decide on how much time it would take for you to mine enough coins to make up for the cost of your mining equipment or how much money you are willing to invest into buying cryptos from others that already own some. Keeping in mind that most crypto coins have value because they can be used for online transactions just like fiat money, if the community of people using said crypto coin disappears then so does its value. This means you could buy a bunch of coins today at a high price only to find out tomorrow that nobody is using it anymore, so you wasted your time and money.
5) Think about whether you want to use a cryptocoin with fast transactions or slow ones. Cryptos like Ethereum have pretty slow transaction times while some others go as quickly as a credit card does.
Also, keep in mind that while most cryptos may be fast compared to normal fiat transactions they are still slower than debit/credit cards and other online services which makes them not suitable for all types of online payments.
6) Decide on whether you want to trade cryptos yourself or buy them from someone else. If you do the latter make sure you know who they are before sending them anything because there have been cases where people get scammed by fake people trying to sell cryptos.
Also keep in mind that because cryptos are decentralized, you cannot get your money back if something happens, so only send money if you trust the person or business that you are dealing with.
7) Consider how much privacy you want when using cryptocurrencies. While some crypto coins may be private others are completely transparent meaning anyone can see them and see how much you have sent to others.
Obviously, it is best not to use coins with complete transparency in certain situations like buying illegal things online so remember this when choosing which coin would suit your needs best.
8) Decide on what type of cryptocoin you want to use before getting involved because not every one of them will suit your needs.
Also, keep in mind that some crypto coins are better for online transactions while others excel when transferring wealth between parties so choose which ones would be best for you to use when starting out with cryptos.
9) Think about how much you will need the crypto coin when it comes time to cash out your earnings. As stated previously, if nobody is using the coin it has no value whatsoever so make sure you know what is happening in the community before investing any money into a cryptocoin.
Also keep in mind that it may take a while until you actually get your coins and they can be worth way less than what they were when you first mined/bought them, so be patient and don’t sell too soon or you will lose money.
10) If you are planning to use cryptos for online transactions, do so with a coin that has both high value and fast transaction times. This way your customers won’t have to wait for their transactions to go through while you waste your time waiting too.
So not only would it be best if the crypto coin had good enough value that its price wouldn’t plummet after a while, but also that its transaction speeds are quick or else nobody will want to buy things from you when they can just pay in fiat instead which is much faster.
Also, keep in mind that the faster the transaction the more expensive it usually is in terms of fees, so make sure you take this into account when choosing what crypto coin would be best for your needs.
And with that, you have a better idea of how cryptos work and what they can do.