Editor's note: No matter what's going on in the market, folks have held on to cryptocurrencies. And according to Crypto Capital editor Eric Wade, that's because one key feature sets these assets apart from anything else. In today's essay, which we last published in DailyWealth in July 2021, Eric explains the big advantage that made cryptos so popular... and why the same force meant they were always here to stay.
What is it about cryptocurrencies that is so powerful?
Blockchain, cryptos, tokens, all of it... Why do people still hold on tight (or buy more), regardless of the latest headlines? For what other asset class would we sit around for 30, 60, or even 90 days of rope-a-dope markets and roll with the punches?
Today, I'll share a glimpse of why crypto investors are willing to hold even through times of volatility – and one big reason why this asset class is completely different from anything else in the markets...
Why the Crypto Story Is Just Beginning
What is it about cryptos that makes them worth holding as an investment?
To answer that question, let's look at something that doesn't get enough attention... mining.
Mining cryptos can be difficult. And several factors – such as whether you're mining a popular coin, have old equipment, or pay a lot for your electricity – can make it difficult to profit from, too.
But mining can also be just downright difficult. It can take thousands of different configurations to mine a particular coin with a particular algorithm.
To mine cryptos, you need a computer with multiple graphics cards. For example, it could take three computers working all day to crank out about $3 of Ravencoin. If you ran it all year, you'd have just about $1,000.
Most people don't have the patience for this – let alone for setting up the machine.
Yet mining doesn't just make cryptos different from everything on the planet... It makes them unstoppable.
Folks can use tools and websites to find out what's worth mining. The websites can account for factors like processing power, what you pay for electricity, and which exchanges you're willing to look on. They then tell you what cryptos are worthwhile to mine, calculating the revenue and profit per day.
In this way, miners can accumulate coins more cheaply than buying at the market price.
But what's the payoff?
Well, like in our example from before, you could end up with $1,000 worth of Ravencoin that has never touched an exchange. If you wanted to, you could build your own wallet and have the algorithm mine the coins into it... Then they'd be yours, free and clear.
Again, it takes patience. But it's available to anyone with the persistence to do it. Would-be miners can easily find the equipment they need on eBay.
And then, they can accumulate crypto on their own... having never touched a bank at all.
This is the independent nature of cryptocurrencies... which sets them apart from every other asset class. And it's what makes crypto unstoppable.
We see this whenever the powers-that-be try to put a stop to crypto. Mining isn't always extremely profitable. But it did become much more profitable in the recent past for bitcoin – because China tried to stop it.
Mining profitability shot up because hash rates, which measure computational power per second, dropped. If individual governments ever tried to stop this unstoppable technology again, miners would clean up.
The fact that you can have off-the-grid cryptos is one of the facets that makes this technology so valuable...
And boy, believe me, if someone has the patience to learn how to mine – and has put in the time, the energy, and the work to do it – of course they wouldn't be ready to give it up just because the price drops.
This is only one piece of the puzzle. But you can see why the occasional volatility isn't where the story of crypto ends... not by a long shot.
We as crypto investors deserve all the upside we get. And it's not because we're lucky. I don't believe anyone in this space succeeds out of pure luck.
It's patience... and tenacity. And most important – it's evidence that when it comes to cryptos, we are truly holding lightning in a bottle.
Good investing,
Eric Wade
Editor's note: A radical plan being whispered about in Washington could soon flip the market on its head... And it could happen as soon as September 9. Eric says this could be one of the biggest money moves in history. He has just gone public with all the details, including one specific play he believes could soar 10 times or more. But the window of opportunity to take part is closing fast.
Further Reading
Bitcoin exploded in popularity after it was first used to buy real-world goods in 2010. But bitcoin was just the beginning... And as cryptos become increasingly more mainstream, the number of things you can do with your bitcoin will only keep growing.
Blockchain is joining forces with AI... and the U.S.'s first pro-crypto administration aims to make the U.S. the "crypto capital of the world." Meanwhile, one key platform is changing the way folks can invest in crypto. So this blockchain rally could likely be the beginning of a financial revolution.
