On this episode of Getting Rich, go on a financial journey with Carmen Perez as she outlines the pro tips and tricks to own your bank account, from credit scores to crushing student loan debt.
If you’re confused by cryptocurrency, you’re not alone! Cryptocurrency can be a great investment opportunity, but it’s important to understand how it works before you get involved. Fortunately, financial expert Carmen Perez (@makerealcents) of Make Real Cents is here to break down the fundamentals of cryptocurrency.
On this episode of Getting Rich, Carmen explains exactly what cryptocurrency is, how it works, and how you can get started on your cryptocurrency journey. Then, she sits down with voice over actor and emcee, Devin Finley, to advise him on how to get started investing in cryptocurrency.
Before investing in cryptocurrency, it’s important to understand exactly what it is, according to Carmen. Carmen explains that, unlike traditional money, cryptocurrency exists entirely online, and is not tied to specific governments. “The main difference between money and crypto is that the value of cryptocurrencies are not regulated by the government,” Carmen explains. “Instead, a network of volunteers regulate the value by using a shared database called a blockchain.”
The blockchain, Carmen explains, is the record of every cryptocurrency transaction. “Records of these transactions are stored and grouped together in blocks,” Carmen explains. “The data stored in these blocks are protected with complex puzzles called cryptograms. Before a block can be added to the blockchain, a user has to solve the cryptogram.”
While some people invest in cryptocurrency, others mine it by solving cryptograms. “Solving a cryptogram is not easy and it requires a pretty powerful computer,” says Carmen. “But the incentive is, the miner who validates the block of transaction first gets rewarded with a cryptocurrency transaction fee.”
After explaining the basics of cryptocurrency, Carmen sits down with Devin Finley, who is new to cryptocurrency, but interested in getting involved.
“Where do I buy crypto?” Devin asks Carmen, explaining that, when it comes to cryptocurrency, he feels like a “fish out of water.”
“So I’ll just give you a quick breakdown. Bitcoin is like one of the OG’s that first came out on the scene, and then you have Ethereum that was kind of the second thing that came on the scene,” Carmen explains.
While cryptocurrency can be expensive, it doesn’t take a huge investment to get involved, Carmen notes. “Surprisingly, you don’t need a lot of money to get started,” she explains. “You can buy Bitcoin with as little as $5. It’s called a Satoshi. That’s the smallest amount you can get of Bitcoin.”
While cryptocurrency is an exciting investment opportunity, Carmen reminds Devin that, because it’s so new, it can be risky. She suggests using an app to make purchases and follow the value of your cryptocurrency as it fluctuates. “Patience is everything, but also I will note that cryptocurrency can be highly volatile and it can be pretty risky,” she explains. “If you want to go and purchase it, I would suggest downloading an app where you can actually purchase it.”
After chatting with Devin, Carmen shares a few final tips for getting involved in the world of cryptocurrency. First, she notes that doing your research is extremely important. Before investing in cryptocurrency, she recommends learning about the different types of cryptocurrency as well as the inner workings of the industry.
Then, Carmen recommends finding the cryptocurrency that’s right for you. “Do you want to go with something like the old standard Bitcoin? Or do you want to get in early with the next big thing?” she asks. “Both have pros and cons, so it’s up to you to decide how you want to invest.”
Finally, and most importantly, Carmen recommends being patient! “Crypto is a long game. The values are constantly increasing and decreasing so it’s best to be patient and watch the market,” she explains. “And always remember, crypto is highly volatile and really risky so proceed with caution.”
Carmen is not a registered investment advisor. The above information is not investment advice and is intended for educational purposes only. Please consult with a financial professional to assess what investments are suitable for you based on your financial objectives, needs, and risk tolerance.
Trending NowMeet Leanne Gan: Brooklyn’s Chinese-Filipino designer and illustrator who’s helping small businesses
Special Offer for YouNordstrom's Designer Clearance is full of incredible deals
More from In The Know:
This high-quality Cuisinart 11-piece stainless steel cookware set is 71% off during Amazon Prime Day
Slugging 101: Does the skin care trend actually work? A dermatologist weighs in
10 of the best kitchen deals to score during Williams Sonoma's big 4th of July sale, from Le Creuset to Nespresso
Why you should buy the Hydrow rower on sale for $350 off, according to a real person who 'hates' exercising