Generational Wealth: A possibility to secure your family’s future with Crypto

06/17/2021 | Blog posts

Generational Wealth

Do you believe cryptocurrencies are just a fad? What if we told you that crypto has the potential to help you achieve generational wealth. 

The state of the world

Mothers, fathers, grandparents, and others in guardian roles often consider one key factor when it comes to their children: money. Have I left enough money for my children? Can they have stable lives after I’m gone? Otherwise known as generational wealth, such a concept is prominent across all cultures around the world.

That’s not to mention the current state of things – recovering from a pandemic, constant economic uncertainty, inflation devaluing the dollar, and interest rates failing to turn our savings into anything significant. It’s a lot to stress over when attempting to leave a financial cushion behind for future generations.

However, many people believe there’s an alternative in cryptocurrency. The nascent technology is quickly growing a dedicated following. Why? In hopes of being able to live comfortably and leave something behind.

This may sound ridiculous at first, but cryptocurrencies like Bitcoin do exhibit characteristics that encourage low time preference and long-term investment.

Cryptocurrency as a solution

What brings users to cryptocurrencies like Bitcoin is control. To many, the blockchain digital ledger is a revolutionary piece of tech that can disrupt the traditional finance system.

To start, Bitcoin, is somewhat similar to gold, it has a hard cap at 21 million. Unlike the unlimited, inflationary US dollar, that cap gives the digital currency an inherent value. Not only this, but all blockchain networks are decentralized – meaning there’s no third-party intermediary. All actions are autonomously recorded and accessible anywhere in the world.

Essentially, you have complete control over your finances, which we’ll get more into later. There’s no bank tracking what you’re spending on or charging additional fees.

These benefits carry over into the lending and borrowing space as well. Interest rates are significantly higher in crypto thanks to said lack of an intermediary, and borrowers can be anyone with the collateral to do so. The real world discriminates against a borrower’s race, financial situation, and background. An unbiased third party is undoubtedly the next step.

Crypto as gateway to generational wealth

Now that you know the broader schemes, let’s get into what you should be aware of to achieve generational wealth in crypto.

Research is key

Your portfolio must be carefully considered. The cryptocurrency space is about freedom, anyone can create a currency and sell it on the market. Which is why you should DYOR (do your own research) and have some healthy skepticism.

Fortunately, there are many ways to ensure a project’s legitimacy. Do your own research and examine the project’s use cases and growth potential, the team and investors behind a project. What are their credentials? How public is their information?

Similarly, you can read the whitepaper of most cryptocurrency projects. A good team will generally have a comprehensive document detailing everything from the blockchain tech to extended use cases and vision. The information exists for those who look. Extensive research will enable you to sleep like a baby.

Dollar cost averaging

Cryptocurrency volatility may turn you off and cost you a lot if you decide to go all in at once. The good news is that you can balance the risk via dollar cost averaging. This is the process of buying cryptocurrency at regular times, such as weekly, at around the same dollar amount. Doing so means you’re evening the playing field. Whether the crypto runs high or drops low, you’re getting in at every variation.

Of course, this could end poorly if an asset crashes hard and never recovers, so there’s always that risk involved. But, if you’ve already done your research, you should have a solid understanding of which projects are likely to be the safer investment.

Passive Income

Aside from holding your own crypto, you can put them to work and enjoy significantly higher interest rates than the poor savings accounts’ decimals. This is thanks to a process called staking.

Essentially, staking involves storing or “locking-up” some crypto assets, similar to holding it in a savings account. Staked assets have the potential to earn anywhere from 6% to 20% APY, though that number varies based on the crypto, as well as the available liquidity.

If you’re not staking in a pool, you can also lend directly to others, assuming they have the collateral. This ensures you’re earning interest on that loan, as well as being rewarded in cryptocurrency powered by your lending platform of choice.

Of course, assuming cryptocurrencies continue to rise in price, you’ll also earn by simply holding your assets. HODLing is said by many people to be the safest way to participate in cryptocurrency.

Self-custody

Cryptocurrencies allow investors to be their own bank. There’s no central authority holding the assets, meaning there’s no bank to tell you what to do, to change interest rates, or to block certain investments. That control is essential to many who believe in crypto.

All that isn’t to mention wallets. Wallets are controlled entirely by you, the cryptocurrency holder. You say when assets are sent, which assets are stored in which wallet, and the level of security for such storage. Let’s use Ledger as an example.

Our hardware wallets protect your private keys with the highest level of security: offline. We offer a unique, cryptographically secure chip to prevent attacks, as well as a custom operating system designed specifically for crypto protection.

Plus, if you somehow lose your wallet, the assets can be recovered via your recovery phrase. Essentially, we offer a way to mitigate all security risks when it comes to crypto. The best part? You control everything.

Looking ahead

Crypto Generational wealth is not easily achieved. But many believe cryptocurrencies are a solid alternative to traditional finance. One that puts people back at the center and gives them hope of achieving digital and financial freedom.