Cryptocurrencies Part 1-

Cryptocurrencies have exploded in the media since last year. 2017 was a big year for them and many people flocked to them as their volatility made for easy gains. Bitcoin was the star of that year, with Ethereum, Litecoin and Ripple's XRP making equally big splashes in the news with significant gains.

As these coins and tokens gathered more attention, many people have come to me asking whether it is something that they should consider investing in it. I advocate caution, thorough investigation and in-depth research for those that are considering it. I think that they will be worth looking into. This is quite a complicated topic so I will be breaking it up into a few parts in order to do it justice and help you decide whether or not to invest in them. This part will be a brief overview of my thoughts. I will provide a much more comprehensive explanation of what cryptocurrencies are later as well as the criteria you need to consider before you invest in them. Finally, I will discuss ones that I think could yield good returns this year. This is not an endorsement of the cryptocurrencies I am invested in.

Never to take the word of anyone as a good reason to invest in anything.

Before I start I want to mention two caveats for investing in cryptocurrencies that you should take note of:

The first is the most basic of advice. Never invest more than you can afford to lose. Things change rapidly with new technology and most of these cryptocurrencies are affected by multiple countries and their regulations or news stories. You should stay up to date with the news surrounding not just your investment, but others within the cryptocurrency space. Bitcoin has a habit of dragging down the market with it if it had a bad day so you need to be informed about what is happening at all times to both protect yourself and your investment.
The second is that you should know what you are investing in. This ties into what I said earlier about research. If you are secure in your knowledge that your investment is a good one, it makes it much easier to weather bear markets (A bear market is a term used to describe an overall trend of loss for most assets). You should know yourself. Not many people can stomach the huge dips these markets experience, and unless you know and believe in what you invested in, it may become increasingly difficult for you to hold out. That being said. I would only recommend investing in coins and tokens that are useful.
By useful I mean that these tokens, smart contracts or coins would have a significant role to play in our daily life, or will be essential to large companies, networks of commerce etc.

Due to the massive influx of fiat into this space last year I expect a crackdown on regulating many exchanges, cryptocurrencies and ICO's in 2018. Governments in many countries have been following the potential and risks that this new technology brings. I think that they will begin limiting the freedom from many legal restrictions that they have enjoyed thus far. I view this as a good sign though. Many countries have seen potential in this technology and I think that regulation will result in more stability for them as well as limit risk for those who are less informed about it.

I would not advise investing in anything until you have done enough research and understand more about cryptocurrencies and blockchain technology. The rest of this series will give you a very rudimentary explanation of them. It is up to you to delve deeper before making an informed decision on either purchasing them or refraining from doing so.