It is likely that you are aware of the recent craze regarding cryptocurrencies but have doubts whether investing in them is a smart move. It is not difficult to understand why many preppers are wary about investing in cryptocurrencies.
Most of them are not tech savvy and do not understand the electronic nature of these virtual currencies.
If this is not enough, there are so many cryptocurriencies to choose from that it become difficult for preppers to make a wise decision. While some of these electronic currencies are good, others are bad, and quite a few of them are downright frauds.
Should Preppers Buy Cryptocurrencies?
Your capability to understand and accept risks and your financial situation too determines whether you should purchase cryptocurrencies or not. To begin with, let us understand what cryptocurrencies are as well as what their real value is.
Cryptocurrencies and Their True Value
What are the factors that determine its value? It all boils down to supply and demand. This rule is the same whether we are talking about virtual currencies or national currencies.
However, the major difference between these two are the individuals controlling them.
On the one hand, supply and demand determines the value of a currency, but printing money and manipulating interest rates by the government can influence the value of their currencies.
On the other hand, the government cannot manipulate the value of cryptocurrencies, as they are much more decentralized.
In simple terms, supply and demand reflect the true value of cryptocurrencies. Its value is dependant on whatever individuals are willing to pay for it at any given point of time. Just like any other volatile investment, the prices of virtual currencies fluctuate according to the market.
What separates cryptocurrencies from other volatile investments is that the government finds it difficult to regulate their value. No doubt, the government is trying its level best to regulate them, but it is not possible for them to ever have absolute control.
It is due to this freedom from the prying hands of the government that provides preppers a compelling reason to think about investing in cryptocurrencies.
Best Cryptocurrency for Preppers
Anybody can create a new cryptocurrency… new ones keep on appearing every day. On the last count, I noticed 900 of them available, and this figure is growing daily.
Considering the wide possibilities to choose from, you might be thinking which one is best suitable for preppers.
There are two major points that preppers should be aware of with regard to investing in cryptocurrencies… popularity and long-term stability.
Certain cryptocurrencies are just fads whose value rises due to media attention and then shrivel away into obscurity permanently. Preppers require virtual currencies that have long-term stability, as they are relying on it to bail them out financially during hard times.
Popularity is vital too as it allows investors to exchange their currency for goods. It is useless to hold a large amount of cryptocurrency that nobody accepts.
Find below a list of the top three cryptocurrencies for preppers:
It is the original cryptocurrency and is unarguably the most popular one for many years. When you see news reports related to cryptocurrency, you can bet that they are typically talking about BitCoin.
BitCoin was developed using “open source” code. This implies that anyone has the liberty to make improvements to the code. This is the main reason why BitCoin is regularly becoming safer and more stable. Apart from this, governments cannot shut it down even if they tried because of its decentralized nature.
The popularity of BitCoin is improving every day. The fact that an increasing number of stores accept BitCoins like they accept checks and cash, fortifies the popularity of this cryptocurrency.
As Survival Frog knows the importance of BitCoins and the importance of cryptocurrencies in the future, they accept the same for all of their transactions.
The popularity and stability of BitCoin makes it the favorite for preppers planning to invest in cryptocurrencies.
This cryptocurrency is like the younger brother of BitCoin, functions just like the latter, but is faster and uses a different algorithm. It has a more long-term stability as its community is more unified.
Unlike BitCoin, LiteCoin rises and falls more steadily and has always been less volatile than BitCoin. It is ideal for those who are afraid of investing in cryptocurrencies as volatile as BitCoin.
Owned by a Swiss company, Etherium is different from most other cryptocurrencies as it is not decentralized. Its ownership exposes it to intervention by national governments. This is why it is able to make improvements faster.
Etherium, also known as “smart currency,” is special in the sense that its smart currency technology gives it practical uses apart from simply sending and receiving money.
Pitfalls of Investing in Cryptocurrencies
These virtual currencies are not the ideal investment as they have problems. However, having knowledge about the risks and taking precautions beforehand allows you to minimize the downside.
As mentioned earlier, anybody can create a new cryptocurrency, and quite a few of the new entrants are complete rip-offs. The creator promotes them so that its price rises, and he then cashes out at the expense of other investors.
You can avoid such pitfalls completely by investing in cryptocurrencies that have a proven track record like the three mentioned above.
As cryptocurrencies are electronic in nature, hackers can hack into your account and steal your investment. However, the scenario s the same with cash and credit/debit cards, as you can lose your savings overnight due to hacking or because of an out of control government.
Since supply and demand determines the values of currencies, there is no guarantee that you will not lose money on your investment.
The financial situation differs from person to person, and I cannot provide financial advice. However, cryptocurrencies are ideal for preppers if they understand the downsides. I hope that you have now understood should preppers buy cryptocurrencies?