Does money buy happiness?" (A must read)
Money cannot buy happiness is an old cliche, mostly used by people who cannot meet their needs and wants to soothe the offending reality that if they could afford to get what they wanted and spent their money right, they'd probably be happy. Over the years countless researchers have come up with suggestions that if someone has an increased income strain and spends the money the right way, it can have a positive impact on their emotions and enhance happiness.
I grew up in a neighborhood that was plagued with a bit of over-excitement and roughness in one of the suburbs in Lagos State, my dad died when I was still young and I was left in my mother's care who was always working to keep our little family going, that freedom gave me the opportunity to explore certain experiences which was above my age but proved to be valuable lessons in future. In one of those unruly experiences, I and my friends always had a happy football bonding session in an open area across our street, but with time the owner of the land started charging us for using his space (we were barely 12) he made us work in his farm, for which he paid in cash and we took money from there to pay him for the freedom to use his space which we used to catch our fun. At that time we all considered it cruel of him to put kids through those hectic tasks in exchange for a us to have a great time but growing up I have realized that what he did was prepare us to face the common reality that to survive in today's world and achieve the comfort that we crave, we have to work for it and that is not always easy, however when the reward eventually comes then we can go ahead and cater for our needs and wants.
In most developing and even developed countries including Nigeria, coming by enough money to afford our everyday needs, wants and cravings is always not always an easy task. In the early 60s and 70s, A University degree was always considered as enough pivot to provide a good job, with a good pay and a comfortable life but with the advance of time we have experienced an upsurge of lack of adequate employment opportunities even for people with good University degrees. This has resulted in thwarted dreams, broken relationships, increased crime rate, depression, mental health issues and in extreme cases even suicide. This social phenomena proves that with a proper avenue to cater for needs people will automatically have a better life. In a recent occurrence in Akwa Ibom State, A police officer is said to have committed suicide over his inability to pay his rent and provide for his family and over the years this pattern of events have occurred mostly among youths and middle aged adults. This happenings could have easily been prevented if the victims had enough money to cater for their needs.
In recent times, the digital world has proven very effective on supplementing for the inadequacies of the real world, infact the advent of digital skills and digital currencies have opened up a whole new trail of opportunities and hope to an average Nigerian citizen. Below I'll help you cryptocurrencies and how it can help hone your finances to make you more financially stable and comfortable.
What is crypto currency?
A cryptocurrency is a collection of encrypted binary data string which denotes a unit of currency designed to work as a medium of exchange. It is monitored and organized by a peer-to-peer network called a blockchain, which also serves as a secure ledger of transactions, e.g., buying, selling, and transferring. Unlike physical money, cryptocurrencies are decentralized, which means they are not issued by governments or other financial institutions.Individual coin ownership records are stored in a digital ledger, which is a computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership. According to Jan Lansky, in his publication "possible state of approaches to cryptocurrency" a proposed crypto currency must meet six conditions as stated below;
The system does not require a central authority; its state is maintained through distributed consensus.
The system keeps an overview of cryptocurrency units and their ownership.
The system defines whether new cryptocurrency units can be created. If new cryptocurrency units can be created, the system defines the circumstances of their origin and how to determine the ownership of these new units.
Ownership of cryptocurrency units can be proved exclusively cryptographically.
The system allows transactions to be performed in which ownership of the cryptographic units is changed. A transaction statement can only be issued by an entity proving the current ownership of these units.
If two different instructions for changing the ownership of the same cryptographic units are simultaneously entered, the system performs at most one of them.
Having understood what the major attributes of a valid crypto currency are, they're a few other terms that I will expatiate on to enable proper understanding of the concept of digital currencies. These concepts include: block chain, cryptography and cryptographic hash
Blockchain: Blockchain is simply a database which stores data in blocks, each blocks are capable of filling up so others are created and are linked together through cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. The timestamp proves that the transaction data existed when the block was published in order to get into its hash. Blockchains decentralized and not controlled by anybody.
Cryptography: cryptography is simply a way of protecting information with the use of codes in such a way that only the sender and intended recipient of this information can view it's contents
Cryptographic Hash: when we were kids some of us made codes with our friends and sent messages in those codes, in which we were the only ones who could interprete those messages, cryptographic hash is simply creating a code for data using a hash algorithm whereby such code only defines data making it near impossible to break.
The essence of all this technicalities is to provide a secure environment,free from foreign interference for the exchange of financial instruments. You're probably wondering how the concept came into being, cryptocurrencies didn't start today, before now they existed only in theory until the late 2000's. A comprehensive history is being discussed below
History of cryptocurrencies
Cryptocurrency existed only in theory long before the first ever crypto currency came into existence. Early proponents of cryptocurrencies nursed an idea of applying complex mathematical and computer science principles to solve what was seen as political shortcomings of the “traditional” fiat currencies.
In 1983 David Chaum published a paper "blind signatures for untraceable payments" which he introduced the idea of anonymous electronic money, his company also created the first digital currency e-cash in 1995. The algorithm allowed for secure, unalterable information exchanges between parties, laying the groundwork for future electronic currency transfers.
15 years later, an accomplished software engineer named Wei Dai published a white paper on b-money, a virtual currency architecture that included many of the basic components of modern cryptocurrencies, such as complex anonymity protections and decentralization. However, b-money was never deployed as a means of exchange.
The late 1990s and early 2000s saw the rise of more conventional digital finance intermediaries. But no true cryptocurrency emerged until 2008 when Bitcoin came into existence. Bitcoin is the first ever crypto currency in existence. On 31 October 2008, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: "A Peer-to-Peer Electronic Cash System" was posted to a cryptography mailing list. Nakamoto implemented the bitcoin software as open-source code and released it in January 2009. Satoshi Nakamoto's identity remains unknown to this day.
However Bitcoin is not the only crypto currency in existence, with time thousands of other cryptocurrencies have emerged, these cryptocurrencies are collectively known as alternative coins (altcoins). As at January 2022, coin market cap estimates a total of 16500 different cryptocurrencies in existence. This provides a wide array of options to invest in. The most popular altcoin in existence is the ethereum. Cryptocurrencies have successfully established it's dominance and it's here to stay.
Cryptocurrency is a very broad concept, so I'll be discussing the different categories of cryptocurrencies below:
DeFi: DeFi is the short form for decentralized finance. It's a universal term for financial services that exists in public block chains basically ethereum. They allow for performance of all the activities that can be performed by banks without a third party(banks)
NFT: Non fungible tokens as the name implies means unique and cannot be replaced with anything else. Nft's are the likeness of real life artworks which the original cannot be replaced with any other one, e.g the drawing of Mona Lisa, this particular artwork even though can be replicated, the original cannot be replaced by any other one. So basically NFT's are digital artworks which is unique and can't be replaced, that gives it it's value.
Utility tokens: utility tokens are digital tokens of cryptocurrency that are issued in order to fund development of the cryptocurrency and that can be later used to purchase a good or service offered by the issuer of the cryptocurrency.
⁃ Store of value tokens
⁃ Yield farming etc.
When trading or exchanging cryptocurrencies there are some certain things you need to look out for.- I have made a list of the 3 most important things you need to check for when exchanging or trading crypto.
1. Liquidity
This is the degree of which something is in high Supply and Demand, making it easy to convert to cash, I mean , if there is no buyer, how then would you sell and vice- versa. A good exchange with liquidity will always have a buyer/ seller waiting on the other side of your order request .
2.Security
How secure is the transaction? In any exchange you'd invest in , you need to be sure that your funds are at least 90 percent safe, as exchanges are constantly under attack, but remember you also have a part to play in ensuring the safety of your funds like safekeeping your passwords, seed phrase, backing up your wallets etc.
3. Fees
Different exchanges has different transaction fees , you may want to check up on this too when considering an exchange. Most wallets tend to rob their users off their cryptocurrency through these charges.
•Cryptocurrency Exchange platforms/ Wallets.
There are different ways in which we could store, buy and exchange crypto currencies. They are grouped into 3;
⁃ Centralized exchanges
⁃ Decentralized wallets
⁃ Hard ware wallets.
Examples of centralized exchanges;Most of which I have tested and trusted are; Binance which is one of the large cryptocurrency exchange, kucoin , ftx , others are: Muna, Okex, Gate.io, Bitmex, etc. There is a whole list of them.
There are also decentralized wallets too like Trust wallet, Roqqu, Luno etc. in this you're not depositing your funds to any exchange but they have less liquidity.
There are also hardware wallets. After making profits from your trading , it is important to store in a secure wallet, these are more secure as they are not prone to internet fraud but they can be pretty expensive. Example of such wallets are : Ledger Nano s , ledger Nano x , Trezor model, etc.
• Tools for Tracking
Now there’s something else you need to know- think of these as some kind of newspaper company but one that’s all about the crypto currency market.
There are certain sites that makes it easier to check and track progress of your assets and other cryptocurrencies before investing in it.
Such Sites/tools are;
⁃ CMC ( coin market cap )
You can easily open an account with CMC , add your favorite coins to the watchlist, here you can set up price alerts for coins , add them to your watchlist, compare one to another , check all time high and lows , with their dates , discover trending news on cryptocurrency, check out the statistics of coins , read up more info on them such as their contracts, links and tags , Amazing features right? You can also earn diamonds, by daily collection, these diamonds can be used to purchase some available ebooks on site and also get some discount on some product services shown on the platform.
Another of such example is Coin gecko: This is also similar to CMC. As you can track progress of coins on this site, see list of different coins and their market capitalization, see different categories of market like I mentioned earlier ( here you can see if a coins falls under a particular ecosystem, defi, cex, meme tokens , Nft etc).
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As a crypto enthusiast, investor, trader or whatever you identify yourself with. You need to have an active Twitter account and some other social media accounts. This is essential in Fundamental analysis and also for those who'd like to hunt airdrops.
*What are airdrops? An airdrop is a distribution of a cryptocurrency token or coin, usually for free, to numerous wallet addresses.
It’s more like a giveaway before the cryptocurrency is listed on wallet or officially released.
Certain tasks like following Twitter pages, retweeting pinned post, following telegram channels are often asked to be performed, so you shouldn't neglect this either. You can also use your personal accounts of these social media platforms to follow some of the pages of your coins to know and see updates such as launching of projects , partnership , listing on different Cex and various other activities.
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Another important tool necessary for your crypto trading is a good community, this cannot be overemphasized. Having a good community is essential, here you'd be open to different people with different potential, value and strength, I belong to one where I have the likes of Coin wizard, Coin nation , Kore crypto, Alvan crypto, shuga media, Ashmil, sparo, and their likes , other bosses which in time bring in their different suggestions , updates, inputs, which help us grow , if of course you take them serious, Take for example what we are doing here , different people with different ideas , sharing and making ourselves better . You can also follow up people doing well in this space with your social media accounts, helps keep the vision and value in sight.( This is applicable in any sphere you find yourself).
*Trading platforms(optional): This allows you trade on multiple exchanges in one platform example of such platforms are: Coinigy, Tradedash etc.
* Charting tools: This allows you visualize different indicators and draw lines to visualize the market, this is useful for the technical aspect of trading. So unless you do technical analysis, this is not so important to you. Examples are: Trading view, crypto watch.
This is just a tip yet very essential tool needed in crypto trading, you see it doesn't just end in buying a coin, you need to know when to sell, follow trends, updates are these things listed above would make your journey easier and note, their are many examples to the things listed above, but it is good you know the basics, you could do more research, pay for classes, learn more, if you truly want to advance in this space.