Inquiry #8

Crypto-Currencies Inquiry

Report planning

Introduction
What are Cryptocurrencies
What different types of Cryptocurrencies are there

What Is the best to invest in

How can you obtain cryptocurrencies

buying/trading
Mining Rig

5. How do cryptocurrencies work

BlockChain

How do investments with crypto compare with other investments
What are the pros of investing in crypto-currencies

Pro #1
Pro #2
Pro #3

8. What are the Risks/Cons of investing in Crypto

Con #1
Con #2
Con #3

10. Conclusion

Introduction

When ‘Bitcoin’ was invented, 1 was worth USD $0.08, now the price has soared, and now is worth USD $40,200 . For our inquiry, we chose to study Crypto-currencies. This inquiry's aim was to find out if cryptocurrencies are worth investing in. We found out that it was definitely worth the time and effort, because of how easy it is to mine, the major increase in value, and the huge return rate. This report will be explaining about how they work, what they are, and should you invest your time and effort into them.

What are crypto-currencies

What are cryptocurrencies some of you may be asking yourself? Cryptocurrencies are a form of online payment that can be exchanged for services and items. Think of them as you would arcade tokens, you’ll need to exchange real money for the token, but the token can be exchanged for goods. When you invest some money in cryptocurrencies some people would say it is a gamble because the worth of the currency goes up and down. Cryptocurrency uses an advanced technological program called blockchain.

Blockchain was originally created to timestamp digital documents so that it is not possible to backdate them or to tamper with them. Blockchain was barely used until it was adapted by Satoshi Nakamoto to create the first cryptocurrency, Bitcoin.

What different types of Crypto-currencies are there

There are many different types of cryptocurrencies. Most of you probably know of Bitcoin. Bitcoin is the most expensive and one of the most profitable cryptocurrencies. The only thing wrong with bitcoin is that it is so expensive nowadays, one Bitcoin is worth roughly $52,980.94 NZD (to date). During our research, we found out that there are lots of different cryptocurrencies around the world. Te Amorangi and I had a talk with our expert. Thanks to Mr. Corney for suggesting this expert to us. He's a year 12 student at the school. His name is William Bourne. He has invested a bit of money in cryptocurrencies, because of that he has a business that he owns, where he sells mining rigs to teachers, students, and other clients on TradeMe and marketplace. We had a talk with him and we asked him what is the most profitable Cryptocurrency to invest in, among other questions. He said Etherum is the most profitable Crypto because the time it takes to mine ethereum compared to bitcoin, you will have made more money.

How can you obtain cryptocurrencies?

To obtain crypto-currencies, you can do it in one of two ways. The first way is to buy or trade. But like normal money you will need a wallet, there are a variety of apps to choose from such as NiceHash, Salad, MinerGate, etc. But unlike real money, crypto-currency has no real physical form, it is stored digitally. Once you have an account up and running, you can visit the crypto market and buy how much you want from any crypto-currency.

Another way to get a hold of crypto-currencies is to mine them. Now when I say “mine”, I don’t mean mining like “mining for gold”. Mining for crypto is searching the internet using a process called blockchain then storing them is a chain of blocks. The more graphics cards (GPU), and the higher quality they are the faster it mines. You can mine just using your computer, just head onto a mining website/app, then it will mine nonstop until you turn it off. A mining rig is essentially a computer that has been reassembled with extra graphics cards, the graphics card is the part of the computer that does the mining.

Now that you have a better understanding of a mining rig, let’s talk about how you can invest your money into it. Now, a mining rig is essentially a computer, meaning it would be pretty expensive depending on the components, how many components there are, the quality of the compnents, and what cryptocurrency you are mining. For example, if you had a mining rig with 4 decent graphics cards, it would cost you anywhere from $3000-$5000. But within a year, you would easily be able to get that money back.

How do cryptocurrencies work

Unlike paper money or debit cards (which represents paper money the buyer has in a bank), cryptocurrencies have no physical form. Cryptocurrencies use decentralized technology to let users make secure payments. It lets them store money without bedding to use their name or go through a bank. The type of technology used is called blockchain, it allows you to make secure transactions, and the timestamp can’t be tampered with.

Blockchain sounds exactly like it sounds. It is a chain of blocks, and within those blocks contains information. Each block contains data, the hash of the block, and the hash of the previous block. The data that is inside the block depends on the type of blockchain, for example, the bitcoin blockchain has the sender, receiver, and the amount of bitcoin. Every block has a hash, it is sort of like a fingerprint, it identifies the block and content as unique, just like a fingerprint. Changing something inside the block will change the hash

how does investments in the crypto market compare with investments with the stock market

Investments with the crypto market works in a different way than the stock market. With the stock market, you buy a portion of the company’s equity and can get an income from those shares. The way crypto works is that you can buy or mine your cryptocurrency, and wait for the price of your currency to increase in value then sell it. You can do the same strategy with the stock market but the currency has a higher chance of becoming more valuable more quickly. But with the stock market, the price will rise and fall steadily.

The graph displayed above shows the common investments that people make. As you can see, bitcoins worth being a high-risk investment go up and down but still manages to go up. Whereas the EUR investment opportunity decreased in price. Every line on that chart at wherever point shows how much people would pay for it at that moment in time, bitcoins price hugely increased within the 3 years, but EUR decreased in value.

What are the pros of investing in crypto-currencies?

Pro 1: There is a massive potential for return. If you invested in bitcoin 5 years ago, you could be a multimillionaire. One of the statistics that makes everyone consider investing in cryptocurrency is that $1,000 invested in Bitcoin in 2013 would be worth over $400,000 today. An even better pro of this is that here in New Zealand if you invest in crypto and cash in, you will get however much money in US dollars and US dollars is almost double NZ dollars.

Pro 2: When you mine the currency the money goes straight into your wallet. This means that you don’t need to pay the additional fees you also can access this money at any moment in time. The bank also can be robbed or go bankrupt, with crypto your money stays your forever unless you decide to cash the currency in or buy items or services with it. Also if someone owes you money and is using another type of online banking. When they transfer you the money, the money is put into your wallet from wherever you are, using any crypto app.

Pro 3: The simplicity of mining is so easy. With a mining rig all you need is wifi and a 3 point power plug, turn it on and you are away. The mining rig runs 24/7 mining your selected cryptocurrency. But a downside to mining rigs is that if the power goes out, it will turn off, you won’t lose any of your currency but you will need to reconnect to the wifi and wait for the power to come back on then the mining rig will continue to mine. You don’t need a mining rig to mine crypto currency, all you need is your computer, and an account on a mining website/app such as NiceHash, Salad, Easy Miner etc. you just need to click a button and you can mine. It isn’t as effective as a mining rig, but it does what you want.

Pro 4: If you decide to invest in mining rigs, you’ll need to spend a few thousand dollars. The cool thing about mining rigs is that they run 24/7, and doesn’t need any supervision incase of overheating ect. After at least a year the money you spend on the mining rig will most defineatly come back.

What are the risks/cons of investing in Crypto-currnecies

Con 1: There is a massive potential of loss in cryptocurrencies. Investing in crypto is a high risk investment. So basically high risk high reward is a way to put it. When you invest in crypto the worth of the coin can go extremely fast up which is a pro but it can also lose the worth of the coin very fast.

Con 2: There is a Potential Network stall. The real value of any cryptocurrency relies on building a strong product that will attract users. You also need to make sure the currency of the coin or crypto doesn't drop in value because users won't spend time investing in the crypto.

Con 3: There is also a chance that the crypto you have invested in might get hacked or have an error. Cryptocurrencies sometimes have a technical glitches, Human errors or hacking . Crypto also has a risk of discontinuation. So that means that the crypto stop stop and i doesn't continue

9/0;

PMI

Conclusion

To sum everything our aim for the inquiry was to find out if it's worth investing money in cryptocurrencies. We found out that it is worth investing money in cryptocurrencies. There were four pros. Firstly, there is a massive potential for return. Secondly, the currency you mine is yours alone. Thirdly, mining cryptocurrencies are simple and very straightforward. Lastly, the money you spend on a mining rig can come back into your wallet by the end of the year. Also, there are three cons. Firstly there is a massive potential of loss. Secondly, There are sometimes network stalls. Lastly, The crypto could be getting hacked or it might have an error.

Works Cited

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Sigalos, MacKenzie. “Bitcoin's Biggest Rival Hit a Record High This Week - Here's How to Mine for Ethereum.” CNBC, CNBC, 14 May 2021, www.cnbc.com/2021/05/10/how-to-mine-ethereum.html#:~:text=Profitability of mining&text=If the rig runs at,can be a profitable venture.

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Works Cited

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About Melissa Burns

Melissa Burns is an entrepreneur and independent journalist. She spends her time writing articles. “6 Reasons To Invest And Trade In Cryptocurrency In 2020.” Digitalist Magazine, www.digitalistmag.com/digital-economy/2019/12/04/6-reasons-to-invest-trade-in-cryptocurrency-in-2020-06201759/.

About Melissa Burns

Melissa Burns is an entrepreneur and independent journalist. She spends her time writing articles. “6 Reasons To Invest And Trade In Cryptocurrency In 2020.” Digitalist Magazine, www.digitalistmag.com/digital-economy/2019/12/04/6-reasons-to-invest-trade-in-cryptocurrency-in-2020-06201759/.

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James Royal, Ph.D. “What Is Cryptocurrency? Beginners Guide to Digital Cash.” NerdWallet, 22 Apr. 2021, www.nerdwallet.com/article/investing/cryptocurrency-7-things-to-know#:~:text=To buy cryptocurrencies, you'll,such as Bitcoin or Ethereum.

James Royal, Ph.D. “What Is Cryptocurrency? Beginners Guide to Digital Cash.” NerdWallet, 22 Apr. 2021, www.nerdwallet.com/article/investing/cryptocurrency-7-things-to-know.

Patel, Deep. “4 Pros and Cons of Investing in a New Cryptocurrencies.” Entrepreneur, Entrepreneur, 1 Nov. 2017, www.entrepreneur.com/article/303848.

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“Screenshot 2021-05-12 14.16.09.Png.” Google Drive, Google, drive.google.com/file/d/13-9qLEO5H_M1SvCPPBdxlMDRHORz4N-v/view?usp=sharing.

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Torsten Hartmann

November 28. “How Does Investing in Stocks vs Crypto Compare?” CaptainAltcoin, 28 Nov. 2020, captainaltcoin.com/investing-stocks-vs-crypto/.

“What Are the Risks?” What Are the Risks of Cryptocurrencies? | CMC Markets, www.cmcmarkets.com/en-nz/learn-cryptocurrencies/what-are-the-risks#:~:text=They are susceptible to error,as hard forks or discontinuation.

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