Monero
Today we are explore a crypto coin that works really good on privacy.
Let's talk about Monero.
Monero is considered a Private decentralized crypto currency, a decentralized coin that bases its story on privacy and not on anonymity.
It is necessary to define these two different concepts.
The concept of Privacy in cryptocurrencies is based on the fact that you as a user do not want other subjects to know what you are doing. The action you do must be unknown, but the identity of the person who performs it is public.
In the other side, anonymity means that it doesn't matter if other users know what we're doing, but these users don't know who is doing these actions. In this case we have Public Actions and Unknown Identities.
If we take for example the most famous cryptocurrency in the world, namely Bitcoin, we would discover that it is not private. The actions made by users are Totally visible on the blockchain but the identities are anonymous. In reality partially anonymous, or rather pseudonym.
Monero, on the other hand, is a private crypto that does not expose who sends money, how much it sends and to whom.
The transactions are traceable and the subjects who benefit from them cannot be indicated. It is not possible to understand who the transaction started from or connect them with others.
The first thought of all very often is that with such coins, only Criminals can benefit from it. But that's absolutely not true.
Monero was created for those who want to maintain their personal privacy and security, for those who do not want to be tracked by the big data of the big companies of the internet age in their routine behaviors.
Monero is also a great way to Cover the presence of a large personal btc build-up that could be attacked.
Monero has a possible use also for market predictions.
If we knew the addresses of the exchanges, we could monitor the quantities of coins entering and leaving these addresses, using this information to create long or short strategies based on our analysis.
Monero then solves the question of the fungibility of a traceable currency.
Each coin or cash note, in the real world, is the same as the other and must not be of interest to you where it comes from. We know from many newspaper articles that some of the bills we handle to buy bread may contain traces of drugs or have been used to buy other illegal materials.
However, in the bitcoin blockchain you can trace the path of each coin since its creation, so it could happen that some government agency knocks on your door in case of some investigation. All this is pure abstraction but who knows, in theory it can happen and that is why virgin bitcoins exist
A completely private coin like Monero has a complete fungibility like the 50 euro just out of the ATM and does not have this problem.
The difference between other private coins such as Zcash and Dash is that these offer the option of private transactions while Monero only offers private transactions.
The monero protocol works by obfuscating the three parts of the transaction. So Who sends, who receives and the total amount of the transaction
The system is created to obscure those who send money via a system called ring signatures. whoever makes a transaction has their signature mixed with signatures of previous transactions, creating confusion and the inability to trace the starting address of the transaction.
The amount sent is obfuscated through the Ring C T or Ring Confidential Transaction, where the sender sends only a small piece of information and this is enough to verify that the amount is legitimate. I will not go into the technical details as they are very complicated, but you can find everything on the official website of monero.
The recipient of the transaction is protected by the so-called Stealth Adress, in fact when it is sent to a public address, in reality I am sending to another address of unique use that is derived from my public address.
This creates a separation between addresses and only my private key will be able to use the funds sent to my address
Monero is a Proof of work blockchain and CryptoNight is its algorithm
Monero can still be mined not only from very powerful PCs but from PCs of normal use and there is no limit to the creation of coins.
Learn more about Mining here.
CBDC - the DCEP Digital Yuan
Not so long time ago, we crypto people were insulted, called thieves, evaders and money launderers. And then, some time passes by our government start talking about Central Banks Digital Currency and all the banks start to sell bitcoin.
Oh well it's always like this. But let's talk about the first authorized state cryptocurrency, namely the Digital Yuan or DCEP, which will surely be a nice tool in the hands of Chinese economic policy.
Dcep is the acronym for Digital currency electronic payment and will be a national digital currency, or a digital national currency, or a digital form of FIAT currency.
Precisely in its digital form, one of the DCEP missions is the replacement of paper fiat money, practically what we hear about the abolition of cash to bring you to a society that can be defined as cashless. It should be noted that digital payments with apps such as WeChat are currently the norm in China and the change would not be as drastic as in European societies.
Let's go into the details of the Digital Yuan. This will be created by the PBoC People bank of China, it will be a centralized currency and will not be minable or stake. At the time of the creation of this video, the system is in the testing phase but in the Chinese government's plans there is the will to reach full operation and replace paper money by 2022. And I'm sure they will succeed.
The blockchain system on which the coin will run is called Chinas Blockchain Service Network BSN and is managed by a Chinese government agency that also manages some of the major state telecommunications companies such as China Telecom and China unicom. The BSN is designed to be easy to use and to be able to develop and operate nodes and applications on the blockchain.
At the time of writing, the digital yuan is only accepted in some chains in China, but the government has issued a decree requiring all merchants that accept digital payments such as AliPay and WeChat to also accept Dcep. These tech giants are also rocketing to make the currency compatible with their payment systems. In a short time, the DCEP will become the most used digital currency in the world.
In fact, even its practical use is oriented towards its diffusion. In fact, it uses the NFC system, which does not require your mobile phone to be connected to the internet during the transfer, which means that it can also be used in areas without a connection. It doesn't even require your wallet to be linked to a bank account. Think of all those people in the world who do not have access to banks, not only in China but also in all African countries. These people will be able to use the digital yuan without any problems.
The Dcep built on the blockchain and with cryptographic technology is designed to spread as a payment method in the world, dramatically increasing the circulation of the Yuan and competing with the US dollar as a world currency.
China wants to become independent from the dollar, protecting itself from possible sanctions and trade wars. With the digital Yuan we not only have a payment system but a system of geopolitical influence, which will transform the world as we know it.
I am sure that in a short time we will see similar currencies developed by the United States and the European Union as well.
It should be specified that the DCEP is very different from Bitcoin, since it is totally centralized and in the hands of a government. This will give full traceability of payments, preventing money laundering and illegal payments if possible. It will be the umpteenth instrument of citizen control in the hands of the state.
Mining, staking and forging for noobs
We often talk about mining, mining farms and energy consumption of cryptocurrencies. But what is mining in 4 simple words?
As we have already read, the blockchain is made up of concatenated blocks, inside which data or financial transactions and payments are written.
In order to avoid scams, counterfeits or even tecnical errors in payments, the data contained in the blockchain must be verified and this is exactly what mining is about.
Mining represents the verification procedure that is carried out by exploiting the computing power of the computers owned by the individual miner or by the mining farm. A mining farm is nothing more than a place, often a warehouse, with a very large number of computers that work and produce blocks.
Once a block verification process is complete, the miner who created the new block will be paid for his verification work. Mining keeps the blockchain alive.
To validate transactions within a blockchain network There are several systems implemented to achieve consensus
A "blockchain protocol" is a common term for consensus methods.
Some of these require investors to purchase physical mining equipment, while others require no physical hardware and only possession of coins.
Let's see the details aboud different consensus methods:
- PoW: Proof of work - This type of consensus is generically called mining and consists in the creation of computational power thanks to mining rigs formed by serialized graphics cards. This computational ability solves the coin algorithm and creates the blocks. Bitcoin is based on this system, which is not particularly eco-sustainable.
- PoS: Proof of Stake - the type of consensus to create blocks is defined staking and is based on the possession of a large number of coins that, when placed in staking in one's wallet and therefore not available on the market, allow the owner to mine the blocks of this blockchain. Ethereum is based on this method, which is greener than proof of work
- DPoS: Delegate proof of stake this type of consensus for the creation of blocks is defined forging and is based on delegates voted by the community of coin owners. Lisk and rise work with this system, which is as eco-sustainable as proof of stake.
In DPOS systems, forging is another way to mine coins in order to validate their transactions and put new money into circulation. This system consists of 101 delegates located around the world who keep a node (server) online where the coin client runs.
This software allows you to maintain the decentralized network, validate transactions, issue new money into circulation and reward delegates for their service. Delegates don't have to be 101 but can be 51, 201, 301, 501, etc. according to the needs of the network. To become delegates there is a voting system based on the amount of money owned (stake).
If you want to become a delegate you need to reach a sufficient number of votes to be able to enter the top 101 (approval).
The DPoS (Delegated Proof of Stake) system is a method aimed at ensuring a network of digital tokens that takes place by processing transactions and achieving distributed validation inherent in the ownership of money without the need for a central authority.
This system represents an evolution that started from PoS (Proof of Stake), also developed in order to reduce costs and the inefficiency associated with the consumption of electricity typical of PoW (Proof of Work) systems, used for example by Bitcoin.
Mining how to do
This block creation can become a profitable business if done with the proper criteria. Obviously we are currently talking about large initial investments in material and hardware.
Before starting, however, we must understand that the two main problems you will encounter will be the exploitation and consumption of the hardware, which will shorten its useful life, and the energy costs given by the electricity bills, which will skyrocket compared to a normal household use. . After that it must be said that each coin is different and that some coins in particular require specific hardware.
Let's see how to mine
The first idea that comes to mind is to use our home PC, or an old laptop set aside in some dusty closet. Old hardware could be an obstacle to profitable mining given the possible low computing power if you use old hardware.
In this case, the mining of coins that are at the beginning of their life and that do not require particular computing power should be considered. But dont put to much hope in that solution.
A second solution can be to participate in a Mining Pool. Basically you participate with your hardware and your computing power in a group where other people gather computing power to undermine. The large number of devices made available means that the possibility of mining blocks in the blockchain is much higher and therefore potentially profitable. The proceeds will then be divided in proportion to the computing power made available. You will have againt the tipical two problems of energy cost and consumption of the hardware, and in addition there is the possible lack of transparency of the group of miners, who could remunerate the individual less than due, cheating him.
A third way could be to rent computing power through CLoud Mining services, services that provide dedicated paid packages for a defined period of time. Since you do not operate with your own hardware, the cost of wear and energy is reduced, but these are replaced by the cost of renting the computing power. In this case, however, there is the possibility of being scammed on the amount of coins that are recognized by the service for the same hashing power rented, a quantity of coin that over time becomes less and less, justified by the growing difficulty of extracting the coin.
Finally, a fourth way is to go big and create your own mining farm, with a lot of networked computers that mine our crypto currencies. In this case we are talking about very high budgets, well over 200 thousand dollars.
In this case, we must take it into our head to become entrepreneurs, so first of all we will have to think about locating the farm in a country with a low cost for electricity. Later we will have to think about what to mine, because for each coin or type of coin there are different hardware that are more suitable. Mining Bitcoin or ethereum is not the same thing. And let's remember that we have to mine a profitable coin, which is not so obvious today.
The supply of hardware for the creation of the farm will be a problem to consider given its possible scarcity and cost, and also its replacement given the premature wear that we will encounter.
We will also need at least one or more professionals dedicated to the management and replacement of parts.
Since the farm has to operate 24/7, it will be a long and demanding job. Creating a farm is not easy and not always profitable, in fact these are general indications. Many farms have been opened and closed in a short period of time not only due to the inability of the entrepreneurs but also due to the volatility of the market. It is a difficult market and it is necessary to have very in-depth specific knowledge, both in the technological and in the economic field.
Cryptocurrencies to be mined.
If you have decided to dive into the world of mining, you must know that it is important to carefully choose which currencies to focus your efforts on, in fact, depending on the currency chosen, mining may require specific hardware or even more or less power. Furthermore, with a view to evaluating the investment, it must be considered that the trend in the value of the currency (heavily influenced by the progress of the underlying project and the size of the community) affects the results.
What if the miners suddenly stopped?
What if miming no longer generates profits? That is, what would happen if the revenues did not cover the costs of the equipment and the electricity used and the miners decided to stop or switch to another currency? Is it true that without miners, Bitcoin would stop working or become too slow?
No it does not. a blockchain continuously adapts its criteria to keep the creation rate constant. If there were 90% fewer miners, then 90% fewer calculations would be needed to approve a new block, and the operation would not be affected.
The absolute value of the reward for a new block decreases over time, all programmed according to the rules that govern Bitcoin. During the first 4 years of its creation (2009-2012) the reward was 50 bitcoins
However, in the event that the miners all stop their activity, the blockchain would stop and consequently it would no longer be possible (until the mining activity is resumed) to carry out any transactions or add blocks to the blockchain.
Learn more about Mining from an investor perspective here.
Derivatives
What are derivatives ?
Derivatives, as the name implies, are financial instruments that derive from something and have become famous in mainstream media after the financial crisis in 2008.
Derivatives normally have the function of insurance or hedging and transferring the financial risk between two parties.
This category can include any instrument whose price is based on the value of another asset, defined as "underlying" (such as, for example, shares, financial indices, currencies, interest rates, commodities
We can explain the derivatives with an example
Luca is a guy who has a family tradition. For the Christmas lunch in his very large family they consume 10 swordfish for a total of 200 kg of fish.
The tradition has lasted for years and Luca is in charge of supplying the fish.
It happens, however, like the year before that Luca had difficulty finding fish to continue the family tradition and mindful of all the extra work done the previous Christmas, for this Christmas he wants to be prepared and never repeat the bad experience.
Then Luca moves in search of a large fish farm in his area and contacts the farmer.
Luca asks to the farmer if he can assure him the supply of fish for next Christmas. The owner is not convinced, but offers Luca to buy the 10 swordfish in advance.
If Luca pays now, the owner guarantees him the supply of the 10 fish.
However, the price will fluctuates through the year, so they agree on a total price that satisfies both of 100 euros.
The owner of the farm then creates a note (IOU) equivalent to the value of 100 euros for 10 fish that can be collected when the owner wishes by a certain date before Christmas.
What we have now is a contract, an agreement that is derived from what is his underlying, in this case the purchase of swordfish, with an indicated quantity within a period of time
So the derivative is a contract based on an underlying.
There are 3 types of derivatives contracts:
The first is the future forward, which is essentially our example, that is the delivery of 200 kg of swordfish in the future.
The second type is called option, which is a future as previusly but with the option to buy or sell.
In the example given Luca may be worried of the risk of not having the fish or farmer may not be 100% reliable.
So Luca protects himself with a purchase option with another breeder, and pays 20 euros for the right to buy the 200kg of fish before Christmas.
So Luca will have this purchase note for the 200kg of fish and he now has the right to exercise this option before Christmas.
Luca therefore now to be absolutely sure of having these 200kg of fish has opened a futures contract with the first farmer for 100 euros and in addition he protected himself from any problems with an option with the second farmer.
An case all goes well with the first breeder, the option will simply expire and be forgotten.
The third type is called SWAP.
It is applied to instruments that have variable interest over time, so if you want to switch to a fixed rate, the bank will take the risk of the spread between the two rates, trying to earn from it.
The underlyings of this type of derivative can be commodities, interest rates, credit rates, etc.
The interesting thing about derivative contracts is that they can be traded and are traded on exchanges or OTCs (i.e. face-to-face agreements between people)
In our example it could happen that Luca and his family have to skip Christmas lunch.
Knowing this, Luca can sell the purchase contract to a friend of his, who could offer him 80 euros for those 20kg of fish.
In this case Luca would lose some currency but he would not have to withdraw the fish and would have recovered part of the money spent.
Otherwise, it could happen that swordfish is nowhere to be found that Christmas and Luca could sell the contract for those 20 kg for 200 euros, displeasing the family but making an excellent gain.
What is important in derivatives is the contract and not the underlying. The underlying is a problem when it creates a toxic asset with the derivative, as we explained in our video dedicated to this issue.
Luca in our example is absolutely not a risk, the risk for Luca is the first breeder.
In the event that all the fish died, Luca would remain with the only contract without validity and without fish and for that he is covered with the option.
Tax Havens
Today we lie down in the sun in full relaxation and talk about tax havens.
A tax haven is basically a low or no taxation country for resident businesses or individuals. They are considered refugees from states that have exaggerated taxation.
Generally the banking system allows transactions to be carried out that are covered by banking secrecy and the administrative management for the creation of companies is very quick and lean.
It must be understood that if tax havens exist, tax hells must exist somewhere.
Are tax havens legal? Yes.
Are tax havens fair? It depends on what our point of view is, which is obviously linked exclusively to companies operating in sectors that has no link to criminality.
If we look at the large sums being taken away from high-tax states, it is clear that tax havens are unfair. Countries like Panama don't have the needs and expenses of normal European countries. Companies operating in high-tax countries benefit from the state services of these countries and therefore should remunerate them.
From the other point of view, however, it is easy to understand that a country with low or no taxation gives to any company a competitive advantage given the saving of money from taxation, money that can be reused in research and development, higher salaries, bonuses and all that. which is needed for company and employees.
Another interesting point to understand is that there is now a competition between nation states in the world of globalization. There have been those who are administratively friendlier to companies, which offer greater advantages and which encourage companies to put their offices there. Places like Luxembourg, the Netherlands or Ireland have understood this dynamic and built a competitive advantage. Other countries, on the other hand, which have inefficient and expensive state welfare systems, are forced to over-tax their citizens.
In today's world, where competition is getting stronger and many barriers have been destroyed, it is easy to understand that every competitive advantage need to be used. States and governments that do not understand this are destined to lag behind on the international scene and with them their economies and the prosperity of their citizens. Being more inclined to favor companies by lowering taxes and bureaucracy, improving and decreasing the state machine, could be the ideal solution to make sure that tax havens no longer exist.
Renting or buying a house?
Renting or buying? Buying or renting?
And is renting really a complete waste of money?
In fact, the question that many are asking is "why pay the rent to the homeowner if I can pay for my home directly?"
To answer this question we must start from the beginning of the question and analyze the situation one piece at a time. And the only thing that makes sense is to analyze the problem over the long term.
First of all, renting a house is not throwing money into the fireplace, but it means having the use of an asset, in this case a house or an apartment. you are paying for the use of space that has no value to you in the future. This concept is basic, the value in the future is the key.
When you buy a house, and in almost all cases you are buying it making debt with a mortgage, you are borrowing money instead of a property and therefore you will pay the debt first, and then the interest for the use of this liquidity.
It should always be remembered that the money you borrowed today is used to buy an asset that will hopefully increase in value tomorrow.
It should also be considered that when the bank makes you a loan, you do not always have all the necessary money for the lend since not all banks provide 100% loans. So you will need to have a place to live for this period.
Another point to be sure of is what is expected in the short term. If you work in a company that sends you around the world, does it make sense to buy a house? If you change jobs and cities often, does it make sense to buy a house?
Being the owner of a house when you decide to take root and create a family is beautiful, but all the expenses that a property entails must be considered, therefore ownership taxes, purchase taxes, writing taxes, possible breakages of part of the house, checks to do at home, management fees and services without having to talk about house bills.
Those who are renting, on the other hand, have only the cost of the rent, insurance, various expenses and bills. And a much easier chance to move if the area gets worse or coexistence with neighbors becomes impossible.
Remember that needs and requirements change over the years, especially if the family grows with one or two children. Buying a house for two people and then having to live there in 4 is not easy but living there 35 or 40 years is certainly more economically viable than living in rent for the same time, especially because after 40 years you will be the owner of a property that will have a value.
But think about how many things can change or go wrong in 40 years, think about the divorce rate in your country.
The issue is difficult to tackle on a general level since each of us has different ideas, ways of life and expectations of the future. The real estate market is a market that must be studied and understood like any market and which is subject to price fluctuations. Many personal factors need to be considered before making the final decision.
Buying a house is simple, much more difficult is having to sell it. Always without falling into the debt trap
Diversification
Today we will understand how diversification works.
Diversification is an investment strategy to lower the risk factor on the markets and the global economy. You must always remember that the stocks or bonds you buy on the market are issued by companies that work, produce, take risks and make mistakes.
Only those who do nothing are never wrong o never make mistakes.
These risks and errors can be of various kinds, from the administrative level to company management or they can change situations or laws that outline the correct policies regarding companies in a given territory. Many of these issues are visible with a long-term view, but very often it happens that problems suddenly fall out of the sky.
So a common sense strategy might be not to put all your eggs in one basket, but to have your money invested in various companies, so that an attack on one company doesn't cause you to lose all your money.
This is to reduce the risk of the portfolio.
This kind of strategy works best only when your asset position arent correlated, that it means that a financial asset is affected to rise or fall in price, due to the rise or rise in the price of another financial asset. To take an example, think of the value of gold and the value of mining shares, or of oil and the shares of oil companies.
If you want to understand if your investments are uncorrelated, look for some tools on the internet that can help you.
A good general way to diversify is to invest in different industries in different sectors.
Given that each sector encounters different and unique risks. The same goes for when we think about different countries or continent. Different countries have different risks and problems
Globalization has helped us with the possibility of investing our money in different countries of the world, but this has meant that the correlation between the various companies even from different continents increased, just think of how Western companies are only linked to the supply of raw materials and semi-finished products from Asia.
Diversifying is not a quick and easy strategy, quite the opposite. We need to spend a lot of time studying the various issues and then studying the various companies that may interest us. Creating a risk-free portfolio is nearly impossible but doable.
We will then have to be careful about the costs of creating the portfolio given the amount of positions we could open.
ETFs are a good choice, but that's your job. Study and choose the best for you and your family's financial life. Remember not to run into a false diversification by buying different assets but which then have the same underlying.
Always remember that your goal is to safeguard the account, avoid large drops in its value and limit volatility by controlling risk.
Dividends
Today let's talk about what dividends are and why we like them so much.
Dividends are funds, money, that companies give to those who own their shares. Generally speaking, we do not talk about very large figures per share, but having so many shares the figure begins to be interesting.
In fact, owning this kind of shares leads to having extra cash flow in our account. A gain is not only made by buying and selling the shares but also by owning these dividend-paying shares.
Now, the first thought that comes to mind is that a stock portfolio can only be made up of dividend-paying stocks, but you have to be very careful. In fact, it is a good strategy but it has inherent problems.
Theoretically, companies pay dividends when they think they cannot increase their earnings by reinvesting in the company. Very often dividends are used as a tool in the hands of companies to remunerate part of the management and part of the corporate stakeholders.
This is why dividends are paid more easily by companies that have been on the market for some time and not by new companies that need to reinvest in themselves or that do not even have this liquidity.
The corporate sector also plays a role in paying dividends. some sectors are more inclined like the energy and oil sector, where only it is easier to create long-term contracts with sovereign states, with large and certain cash flows. These are stable operations in a "slow" market.
The companies of the new economy instead work in a very fast market, much more fluid and with big technological changes that does not lend itself.
Dividends can be a great solution for income investors, like those who invest to get money into their portfolio.
The risk management of dividend stocks is slightly different from others. In fact, one is led to think that companies that give dividends are more disciplined, giving a sense of security to the investor. In this way, the investor himself has a management that can be simplified having a certain annual return.
One of the possible strategies with dividends is to reinvest buying other stocks that will pay more dividends and so on for years to come.
It must be said that having a dividend-only portfolio is an interesting idea, but we must also understand that to have interesting figures we will have to immobilize an important figure on the stock market, which is notoriously risky and volatile. Stocks can crash and companies can make mistakes that can lead them to eliminate dividends. Unfortunately, the market does not appreciate this move and that company's stock could suffer a further collapse.
Dividend stocks are attractive but should not be abused.
Gold
Since ancient times, gold has been associated with wealth, money and well-being for those who owned even a small part of this asset. It was one of the most sought after materials extracted from the bowels of our planet, and the human being has always seen the value given by its scarcity.
Used since the dawn of time to give value to the currency of all peoples, we Westerners had the gold standard until the beginning of the 20th century, in fact the value of the currency issued by our central banks was linked to gold, which guaranteed its value.
This system was completely abandoned in 1971, but many still consider gold a fundamental asset for their investment portfolio.
In fact, gold is considered a refuge or a safe haven, where to take refuge every time the shadows of galloping inflation returns to disturb our sleep. Especially for critics of fiat currencies, gold is an excellent investment to maintain or increase the value of one's investments and to protect themselves from the wild printing of money created with Fiat currencies
Remember that gold is a finite resource on our planet, hardly available and in limited numbers.
Central banks in countries that didn't have much have been buying it up in recent years.
Many countries have large quantities declared while other countries have preferred to discard them. This is a good example of the different strategy of the various central banks.
Gold is also an industrial metal used in the production of electronic parts. In reality, its industrial demand is a small part of the world total, to which must be added the demand for raw materials for the production of jewelry.
Now we should ask ourselves, is it right to invest in Gold?
Well, as in all things, there is a better time to do things, and these can only be understood by studying the set-up in detail
Having a share of capital in gold is not stupid, quite the opposite. However, this must be seen primarily as a defense tool. This does not mean that you cannot make money with gold, but as always you have to follow the trend.
If we talk about price, by convention and general rule, the price of gold grows more and more than inflation and this is not related to the trend of the stock market.
In the event of a stock market crash, there is usually a rush to grab gold, and then sell the gold when the stock market rises vigorously
However, Gold has a volatile price and not a fixed price. The period and time of purchase must always be considered and what tools we are monitoring.
In fact, there are more methods and tools to be invested in gold.
The main differentiation is between physical gold and financial gold.
Financial gold is the gold that we can buy through financial instruments such as ETFs and ETCs, futures or derivatives. In this case we will not physically have gold in our hands but we will have financial contracts that represent the amount of gold we own that we will be able to trade on the main world markets. Obviously in this case the choice must be careful with regard to the instrument and all its peculiarities, relying on issuing companies that are more than reliable.
Physical gold, on the other hand, is the gold that we can take home and touch with our hands. Generally it is not just about jewelry, but also coins or bars, which can range from a few grams to a kilogram. The unit of measurement of gold is the ounce compared to the US dollar. This gold can be kept in your home, obviously safe from buglar or scammers. Given the high value of the metal, if you decide to buy more than a few ounces, it makes sense to contact specialized custodians to keep our investment safe.
In fact, there are real risks to owning it, not just financially, but personally. Gold is not an investment for everyone.
Another way to be part of this market is to expose yourself by buying shares in mining companies. This is another method which, however, is totally financial and which must be considered and studied like any financial investment, to which the risk of the sector in which these companies operate must be added.
Long or Short
This is a short article that will explain some of the terms that you can find in the world of trading.
Learn more about exchange here and here.
You will often hear from people in the environment talking about being Long or being Short
This is the result of a diametrically opposite view of the market by the trader.
Being Long means having purchased the financial instrument.
Being short means having borrowed the financial instrument.
In fact, in the world of trading we can not only buy an asset, assume a share or a cryptocoin, but also borrow it. It all depends on how we consider the future trend of this action, like the rise or fall of the price.
The market can be defined as bullish or bearish, in the event that it is increasing in value or losing value. There are two animals that describe the uptrend or the downtrend
The bull is the uptrend market. In fact, it is defined as the bull market. The bull strikes from the bottom up.
The bear is the downtrend market. Hence Bear Market, as the bear strikes from top to bottom.
Long means being the owner of the asset. Our hypothesis is that the market is bull so the asset's value will go up so we will wait for the value to rise to sell it at a higher price
Being short means that we think the value of an asset will go down, we will be in a bear market, so we are going to borrow the asset from a lender. We will sell our asset at € 5, it will drop to € 3 and we will buy it back at this amount so as to give it back to the previous lender. The 2 euro difference is your earnings
Always check your broker's costs regarding being short, they must be carefully monitored to manage them in the best possible way.