Student life is full of Transitions and transformations. It is that phase in one’s life where one transforms from a carefree child to a responsible adult. You start making major decisions and take absolute control of your own life. This actions you take in this phase of your life make the most impact in the future that awaits you. Situations like these make student life very crucial and tensing.
Thanks to the digital awakening that has happened in the last decade, students today are digital nomads. They make thorough use of technology to grow in their careers and for everything else included. Education has become costly too. Most students today are burdened with the load of a major student debt along with the pressure to succeed in the real world. Recent surveys suggest that 1 out of every 5 students today has used a part of his/her student loan to invest in cryptocurrency.
Student loans are ideally taken to pay off college fees and for the college expenses that are required during the course of time. Many students make use of this opportunity and borrow a little more than is required to invest in cryptocurrency. The leftover cash is used for college living expenses or as pocket money. Students invest in the famous Ethereum or Ripple instead of taking an extra art or literature class instead.
Student loan executives/college administration frown upon the idea of investing in something that is risky but there is no rule against it. It can ideally land you in 2 situations, you graduate with more debt than you planned or you can pay off your debt sooner. It becomes debatable when students thoughts juggle between cryptocurrency exchanges and assignment submission dates.
Most major risks that you take in life come with chances of major gains or major loses. But taking uncalculated risks is what puts you in a clueless spot. Both loses and gains in bitcoins are highly unpredictable and volatile. Its risky nature is what has banned it in some countries and banks like RBI warn customers against it.
How did cryptocurrency and bitcoins come into existence?
These are digital currencies that are generated by encryption techniques. Some anonymous programmer designed them back in 2009 under the pseudo name of Satoshi Nakamoto. The value of the currency was .0048 back then and has risen to 9 Lacs since then. No certified authority oversees these transactions; these are looked over by a distributed ledger called blockchain. Anonymity in these transactions is the major reason why black marketers invest or transact here.
The history of cryptocurrency goes through both, uphill and downhills. Loss of millions and billions of dollars through hacking has scared investors in recent past. Studies suggest that nearly 1/3rd of all cryptocurrency transactions have been hacked and nearly half of all transactions have shut down in the last half-decade. Volatility, loss of authority and legality is what makes cryptocurrencies such a dicey investment.
Like all things in life, there are 2 sides to the coin. I will list down both benefits and risks of investing in cryptocurrencies as a student. It will be entirely upon you to decide the next step.
Reasons why this is the best time to invest in cryptocurrencies as a student-
1. Returns that are hard to imagine otherwise-
Investment in big coins like bitcoins and ethereums can give you growth up to 600% or more in a span of a couple of days. This sudden and unexpected rise in value is what makes investors so greedy about the whole deal. This kind of returns are impossible in any other form of traditional investments,
2. Huge growth potential-
High expertise in technology is something that keeps away most people from cryptos. Investing in cryptos can be really intimidating to most people. It can otherwise give you an advantage or edge over others, in terms of profit and experience. One could say, cryptos come with risks/gains and a certain kind of cheap thrill.
3. One doesn’t need a degree to start-
This new industry has made many school dropouts turn into millionaires over a couple of months. All you need is a strong internet connection to buy crypto coins. If you identify a good coin, research on it and invest some money and time on it. You are likely to make huge gains. Absolutely no degrees or certificates are required to start with.
4. Blockchain is here to stay; you can be part of a possible revolution-
Digital currencies are powered by a technology called Blockchain. It is a decentralized and distributed database without any central point to be taken over by management. This makes it highly for hackers to get into the system. Blockchain technology is bringing in a digital transformation and giving way to creation and adoption of new currency units.
Reasons why investing in cryptocurrency as a student is not very wise-
1. Zero depositor insurance to cover up loses-
Yes, there’s absolutely no guarantee that you won’t have to part ways with your precious money. Unlike traditional investments where you could choose an insurance to cover the risks involved, you can’t be covered in case of bitcoin investments. This is the major reason why Warren Buffet calls it a mere bubble, susceptible to burst at any point in time.
2. Security threats loom around the corner-
There’s absolutely no central authority that controls or looks over your transactions here. You cannot contact anyone in case of a deceitful dealer or a technical glitch. You are on your own, this might make you feel devastated and helpless as a student. To make matters worse your bitcoin wallet password is irrecoverable too. Any balance transfers of bitcoins or bitcoins once diverted/stolen, will also make your bitcoin wallet void of any value.
3. It is a blind temptation-
It’s a never-ending greed. This is why even famous and seasonal investors invest in Bitcoins knowing the risky nature of the Cryptocurrencies. The huge gains that happen so fast are what seduces you into taking such big risks.
You might have to do a reality check here. You have more to lose as a student investor than someone who is already a seasonal investor and has his future secured.
4. You might end up having an unexpectedly large debt-
There are high chances your greed makes you invest more and more money. There are equal possibilities of losing the amount and landing in a debt that you weren’t prepared for at the least.
Situations like these are tricky. I understand the urge to pay off loans and a good pocket money. But are you willing to take the risk of a big debt and a messy career at the end?
We will never know if cryptocurrencies will become mainstream, at least not for now. They come with an equal share of salt and sugar. It’s up to you to decide what’s your preference.