On this episode of The Wiser Crypto Investor Podcast, Casey Smith and Robert Swarthout talk about smart contracts, NFTs, bitcoin, the four biggest U.S. exchanges, the four most popular types of cryptos, and new digital identification technology. They also explain why CBDCs raise privacy concerns, and whether or not you should diversify your selection of cryptos.
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What are smart contracts?
Each cryptocurrency has a different purpose; they are all structured differently. Interestingly, some blockchains support smart contracts. A smart contract is the ability to write code that executes when something happens. For example, it is like a paper contract, but it is written on a blockchain in code.
Interestingly, Ethereum was the first cryptocurrency to use smart contracts.
What is an NFT?
NFTs are non-fungible tokens that represent something unique on the blockchain. Typically, they are computer generated 8bit low quality jpegs. NFTs have become so popular that they are like trading baseball cards. People have taken an interest in the rarity aspects of NFTs because it is possible to make a profit with them.
What is the purpose of Bitcoin?
Bitcoin’s main purpose is storage value. It is useful to keep for long periods of time to make a profit. In the past, bitcoin was pitched as a means for payment. However, this was quickly rectified because bitcoin payments take an unreasonable amount of time to process.
Try not to spend your bitcoin because if you spend while it is low, you can lose a lot of money. Be careful because it is very volatile!
CBDCs often raise privacy concerns in other countries because receipt data is stored. This means it is possible for the government to see your transactions, which causes concern amongst citizens.
In the U.S., large credit card companies do not receive transaction history. It is only permitted as public information if there is a court order.
Should you diversify your selection of cryptos?
You do not need to diversify your selection of cryptocurrency in your portfolio. If you are not looking to spend a lot of time investing in cryptos, the best option is to invest in the top five cryptos. The top five cryptocurrencies are Bitcoin, Ethereum, Solana, XRP, and Cardano. Keep in mind, it is an unregulated industry so tread carefully.