Diversification of Portfolio

 

Balancing a crypto portfolio is not that different from balancing a traditional portfolio. You can easily reduce your overall risk according to your profile and investment strategy. All it takes to get started is simply diversifying your investments among different cryptocurrencies.

The extent to which you diversify is up for debate, as there are pros and cons to both sides. However, it's generally accepted that some diversification is beneficial. You can reduce the risk of your investments by holding different crypto assets (including stablecoins) and making sure to rebalance your asset allocation regularly.

Getting started with crypto investing is as easy as purchasing your first bitcoin (BTC), ether (ETH), or any other cryptocurrency. While some investors prefer to buy and hold the largest cryptocurrencies, others choose to experiment with altcoins. 

But what's the best way to do this? You are more likely to succeed by thinking carefully about your asset allocation and balancing your crypto portfolio regularly. Depending on your risk tolerance, there are a few ways to do this. Balancing your portfolio isn't hard, and the results can literally pay off.

Asset allocation refers to investing in different asset classes (e.g., cryptocurrencies, stocks, bonds, precious metals, cash, etc.). 

Diversification relates to the distribution of your investment funds across different assets or sectors. For example, you could diversify your stock holdings by investing in different industries, such as agriculture, technology, energy, and healthcare. Both of these strategies reduce your overall risk.

Banking vs Crypto

 

Banking vs Crypto how does it work?

1- BANK 

When someone makes a deposit in their bank account, that money is no longer the depositor’s property, not directly. The bank now owns it, and in return, you receive a bank account where you can withdraw your money. In theory, the customer should have access to their deposit amount on demand but that is not true. The bank doesn't hold on to the full amount, only a fraction normally from 3% to 10% and the rest is loaned or used for operations.

2- Bitcoin

Contrary to the system, we have Bitcoin, which is a decentralized digital currency that introduces a very different economic framework. A distributed network of nodes runs Bitcoin and its data is protected by cryptographic proofs and constantly recorded on a public ledger called the blockchain. There is no need for a bank or any kind of intermediary with Bitcoin and no such thing as fractional reserve. Also, the issuance of Bitcoin is finite, it is simply not possible to generate coins from thin air like traditional banking. You have a fixed amount and it cannot be modified ever.

What is Testnet?

No matter what the type of project is in the field of software development, we need to run it at a local network to test whether it is working perfectly or not.

A similar thing is with the Cryptocurrency world where developers develop their projects and check out the working ability of performance at the TestNet network.

At the testnet network, they check that how efficiently it is working and how it is different from another programming, and how many levels of security it can pass, so that everyone can use it without any tension of hack or attack at the network.

What is MainNet?

In some cases, Mainnet is known as a live network also. After all the trials at TestNet network, The team of #coin launches his project at MainNet for the use, where people can use the coin to mine, stacking, and transaction easily.

So in simple word MainNet is the main network where Blockchain data program actually runs.

Difference between Testnet and Mainnet

We can’t transfer coin from Testnet to MainNet or vice versa. In simple words we can say they can’t intermix with each other even both are running at the same technology and the same algorithm with the same name.

List Of Abbreviations Commonly Used In Cryptocurrency Trading

In every industry, there is a special language to make communication easy and efficient. Those abbreviations have a great impact on the industry, lets understand what they are.

List of abbreviations commonly used in cryptocurrency trading and  CryptoSpace which are most helpful for the community:

• Altcoins: Alternate cryptocurrency that is any cryptocurrency other than bitcoin
• Bag Holder: A person who buys and hold coins in large quantity hoping to make good profits in the future.
• Bear/Bearish: Negative price movement
• BTFD: Buy The Fucking Dip
• Bull/Bullish= Positive price movement
• DILDO: Long green or red candles
• Dump: To Sell off a coin
• DYOR: Do Your Own Research
• FA: Fundamental Analysis
• FOMO: Fear Of Missing Out
• FUD: Fear Uncertainty & Doubt
• HODL: Hold/Hold a position
• ICO: Intial coin offering otherwise know as IPO.
• Long: Margin bull position
• MCAP: Market Capitalization
• Moon: Continuous upward movement of price
• OTC: Over The Counter
• Pump: Upward price movement
• Shitcoin: A coin with no potential value or use
• Short: Margin bear position
• Swing: Zig zag price movement (Upwards and downwards)
• TA: Technical Analysis
• REKT: When you have a bad loss
• Whale: Very Wealthy trader/Market mover.
• Weak Hand: a coin holder prone to selling at the first sign of a deep in price.
• AMA: Ask me anything
• ATH: All-Time High
• ASHDRAKED:  A situation where you lost all your money.
• C2C: Crypto to Crypto
• DLT: Distributed ledger technology
• DYOR: Do Your Own Research
• IMO: In My Opinion
• JOMO: Joy Of Missing Out
• Lambo: Lambo is the status symbol that becomes an elusive goal for most investors. It’s a car industry reference that makes people believe everyone who has entered the cryptocurrency business will buy a Lamborghini very soon.
• Moon: To the Moon resembles the All-Time high.
• Nocoiner: A Nocoiner can be any person who doesn’t own Bitcoins.
• Noob: A person who is inexperienced/ new to a particular sphere or activity,
• OTC: Over The Counter
• SAFU: Secure Asset Funds for Users.
• Shill: Shill is the holder/owner of altcoins who just wants to promote his digital currency for his own benefit.

Do you know any abbreviations used in Crypto Space not listed here? let hear from you.