The digital era – blockchain technology, distributed networks, bitcoin, cryptocurrencies, new financial products – brought to us financial opportunities that never have been available, nowhere in the world!
Specially for beginners, but not only, I am presenting below my personal journey from old OTC to the new digital era of investing, such as Trading, Staking and HODLing (a term derived from a misspelling of “hold” that refers to buy-and-hold strategies in the context of cryptocurrencies, according to Investopedia), which era has determined the creation of the Passive Income Investment Plan (PIIP).
It started with hard types of online investment platforms like Forex and Over the Counter markets, but they weren’t available to small investors, like one with 100 dollars.
Also Forex platforms aren’t a very passive type of income, they are designed mostly for traders, and are quite risky for average trader. As I said, a big disadvantage of Forex is that you need large amounts of money.
On stock markets, even if they became digital, you also needed huge amount of money and must wait very long time to get your dividends into your pocket wallet.
I was investing in few stocks and made some bucks, but they were risky. I was lucky with my investment in a bank stock (Banca Albina) which went bankrupt few days after I’ve withdrawn all my money from that stock in 1999!
In the meantime, another option, with smaller amounts to invest, were the online crowdfunding platforms, but with low security of your investment, high costs, and long time to wait. However, good point to start so, in 2014, I became involved with Crowdcube which was one of the first online equity crowdfunding platform in the UK.
Then came the Blockchain technology with its first product – Bitcoin – followed by other cryptocurrencies (altcoins) and the exchanges, which (ex)changed the world of investment and have totally changed our lives, by bringing to normal people the possibility to get financial freedom and benefit from (partial until now) decentralization of their money!
So, since 2013, when I met Mr. Bitcoin, I’ve started to mine BTC on ASICs, and also to buy Bitcoin on Bitstamp exchange. However, I did not HODL all BTC for long time, mostly I was trading than investing or holding.
Then altcoins started to grow and I’ve made a collection of cryptocurrencies naming it MyDIP (My Diversified Investment Portfolio) by including in it the main coins, such as: Bitcoin, Litecoin, Namecoin, Peercoin, then newest ones, such as: Tezos, Binance, Elrond, Nexo, SwingBy, etc. Strangely, I never was a fun of Ethereum, because of its wallets unfriendliness and then high fees of gas!
With the growth of nice and high quality blockchain projects that include stablecoins, PoS, staking and masternode, DEX, CeFi, DeFi, I thought this was the right time to create a strong Passive Income Investment Plan (PIIP)!
PIIP is an investment plan where members are doing nothing more than saving and/or investing, being rewarded through an annual stake – such as: share, dividend, interest, bond, etc. – which is paid daily/monthly/annually from the value of a specific digital asset. In my opinion, and according to many tech dictionaries, passive income requires little to no effort to earn and maintain it. According to Wikipedia, it is called progressive passive income when the earner expends little effort to grow the income.
Traditional passive income may include regular earnings from a source other than an employer or contractor, such as: rental property, royalties, stock dividends, interest on loan contracts, etc.
According to the Urban Dictionary, there is a bad part of passive income – called passive aggressive income – when an income stream that was supposed to be easy turns out to be hard work and difficult to extract money from, due to reluctant or uncooperative people involved who try to avoid paying. So, before joining any passive income program do your research work very well.
But what’s new with the advent of blockchain technology? The possibilities to put your spare money (those you can afford to lose) to produce more money are tremendous, as they never been before! Here we have new connected words included in our dictionaries: DEX, DeFi, CeFi, HODLing, Staking, Masternodes, Farming, and more to come! Opportunities for open-minded people to get the financial freedom we all deserve is here and now!
For my portfolio I use both CeFi (centralized finance) and DeFi (decentralized finance) tools. Among them are: Nexo, BlockFi, Bankera, Celsius Network and Wing. I use Nexo the most, for gaining some interest and for borrowing cryptocurrency or fiat, sometimes.
My favorite investment strategy represents HODLing (holding), Staking and Shared Masternodes.
In order to get the financial freedom you deserve, even if we call it passive income, before getting into it, you MUST prepare yourself for it, so that no one would be able to steal your wealth! Doesn’t matter where in the world you live! Get the FREEDOM but LEARN to create your own bank by doing at least the following steps. Access to any crypto ecosystem is guaranteed if you create a WALLET before anything else. The steps to your own bank are:
1. Sign up
Enrol on the platform (Investment platform, or DEX, DeFi, CeFi, etc.) and create an account.
2. Download wallet
Download the Wallet, which could be: web wallet, desktop wallet, phone app.
3. Save passphrase
While downloading a wallet, most issuers will give you a passphrase that MUST be saved in a secure place, and NEVER forget it!
4. Encrypt the wallet
For added security, it is recommended to encrypt the wallet with a strong password of at least 7-8 characters, containing numbers, at least one capital letter and at least one special character (for example the “&” or “#” character).
5. Fund account
You are creating your own bank, well, it is not really your bank, but it is your bank account that cannot be destroyed by traditional bank robbery. So, you have to fund your account with a minimum amount. There is a possibility to create not only your own secure bank account, but also your own bank, but this topic will be detailed in another article.
6. Transfer funds (optional) for staking
For security reasons, in order to make a stake, some providers will ask you to transfer crypto currencies (coins or tokens) from the online account (web wallet) into the desktop wallet, on your PC.
7. Backup wallet.dat file
When installing a desktop wallet, to prevent accidental loss of tokens, we recommend backing up the wallet.dat file. Usually, to do this, in the “File” menu, click on the sub-menu “backup wallet”. Select a safe location, an external source (offline): memory stick, portable HDD, etc., and save the wallet.dat file.
The best is to join so called decentralized projects, but there is no full decentralization as the issuer will always have access to the code and can even run with your money!
It is better join a project where people are known and trustworthy, and not some “DEX” strangers.
Happy Free Banking!
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