As an investment banker, I advocate not keeping all your money inside a savings account. Why? It is great for the banks because your money acts to extend financing to others. But what does it gives you as a saver? Probably a measly return per annum which is not even enough to beat inflation.
Don’t Keep All Of Your Money In A Savings Account
So where do you keep your money?
Do not keep your money. At least, not all. You should reinvest that amount in something that can increase your cash flow. Entrepreneurs need to be frugal in their spending and constantly diversify their sources of income. It can be anything from fixed deposits, the stock market, starting your own business or a blog. For this post, I will share how to start trading cryptocurrency (with Luno) for complete beginners.
What Is Cryptocurrency?
Cryptocurrency is decentralised digital money that’s based on blockchain technology.
‘Decentralised’ and ‘blockchain’ are the keywords here:
- Decentralised: there is no centralized figure for wealth transfer or ownership.
- Blockchain: a technology that stores information. Each block contains some data, a hash (digital fingerprint that changes when the data changes) and the hash of the previous block. Thus, the name blockchain. The security of a blockchain is with something called ‘proof of work’ that exists every time a block comes into existence and a peer-to-peer (P2P) network that verifies all of the information mentioned above from different computers.
New blocks cannot be created or ‘printed’ by any centralized party like our current fiat currency. It is also legal tender in some parts of the world.
It’s easy to see why cryptocurrency can become the currency of the future and why we should start investing in it.
Mining is the act of solving certain computations to create new cryptocurrencies. It is normally employed with the use of graphic cards and certain mining software. I will not be discussing crypto-mining in this post.
Similar to the stock market and forex, you can also trade cryptocurrency. The exchange is your local currency with the cryptocurrency you’re buying or selling.
What Do You Need To Know Before Trading Crypto
Who is Luno?
Starting in 2013, Luno’s mission as a crypto exchange is to make cryptocurrencies more accessible and empower the general public.1 (Previously, it was only available to those with technical knowledge.)
Deposit & Withdrawal
As an exchange, you can create an account, deposit & withdraw your cash or cryptocurrency. Yes, you can transfer to and from other crypto wallets as well.
With their app, it makes it so much easier to transact.
Please be wary of tax laws in your country. You might need to declare it as your income tax based on how often you trade.
Here are the fees when you transact within Luno. The notable thing to mention here is the Maker and Taker fees.
The maker fee is the rate when you queue for a price at the exchange that is not the current price. Generally, you have to wait until the price reaches that point.
A higher rate is imposed when you queue for the market price. ie if you’re buying at the seller’s price and higher or if you’re selling at the buyer’s price or lower. Your transactions normally will match immediately if there’s a queue for it.
The fundamental analysis depicts the fair or ‘intrinsic’ value of an asset or business. Fair value is calculated based on the discounted value of future cash flows. But how do you measure the fair value for commodities like cryptocurrencies, gold and silver, which do not have cash flows?
The simplistic approach to this is the demand and supply chain from the global perspective in news and announcement. For example, the announcement of the first bitcoin ETF in 2021, and its global adoption on investment and commerce.
Trading cryptocurrencies is much like trading stocks or forex when it comes to technical analysis. You can use the common indicators such as Moving Average, RSI, MACD, and Bollinger Band to predict its movement and follow the trend.
How To Start Trading Crypto And Earn Free Bitcoins With Luno
For the detailed list of steps, please visit their website:
- To start trading, sign up to create a Luno account with my invitation link
- verify your identity
- Once signed in, tap the Rewards menu item, tap the Enter Code tab and apply the unique code (6TCPC7) in the field
- Now tap the Wallets menu item and then tap Buy and choose Bitcoin
- Deposit and buy the minimum required amount of Bitcoin (see the table below)
The amount that needs to be bought/sold is currency-specific and is listed as follows:
|Indonesia||IDR 500,000 or more||IDR 25,000 worth of BTC|
|Nigeria||NGN 5,000 or more||NGN 250 worth of BTC|
|South Africa||ZAR 500 or more||ZAR 25 worth of BTC|
|Europe||EUR 250 or more||EUR 15 worth of BTC|
|Uganda||UGX 50,000 or more||UGX 15,000 worth of BTC|
|Malaysia||MYR 250 or more||MYR 25 worth of BTC|
According to their website, this offer may be for a limited time only.
I have received the free Bitcoins from a colleague who sent his invite link. I have also found trading with this platform easy and enjoyable. If you have further questions on using this platform, refer to their help articles. Have you traded with Luno? Do share your experiences in the comment section here.