Inflation, Cryptocurrency, and How They Interact

Inflation, Cryptocurrency, and How They Interact

When it comes to crypto and inflation, certain cryptocurrencies have been touted as assets that can protect against inflation. But lately, with rising interest rates and declining crypto prices, crypto isn’t proving to be the inflation-fighter many had hoped.

For example, gold has been a popular hedge against inflation, as it holds value well and doesn’t tend to be volatile. For several years, many people put Bitcoin in a similar category — as a fairly stable store of value.

But crypto values aren’t holding steady in the face of growing inflation — not even Bitcoin. It remains to be seen whether different types of crypto can indeed be an inflation hedge or not.

Understanding Inflation and Cryptocurrency

Inflation

Inflation occurs when a fiat currency such as the U.S. dollar decreases in value over time, which in turn causes the price of goods and services to rise.

Inflation can occur when there is an extra supply of currency, when money is printed faster than it’s needed in the market. It also happens as the price of goods increases, which can be because of various factors — meaning it takes more and more units of a currency to purchase the same products.

The Federal Reserve Bank aims to keep inflation at 2%, and uses monetary policies to keep it at that rate and not go higher.

The question is: Is crypto a good hedge against inflation, given current conditions?

Cryptocurrency

Understanding how cryptocurrency works will help to shed some light on why these digital currencies have been considered an inflation hedge, even though crypto is a relatively new asset class.

Cryptocurrencies are digital and typically decentralized, meaning they are maintained by peer-to-peer (P2P) networks, and created using distributed ledger technology (blockchain) and through P2P review. This is accomplished through different consensus methods, which vary depending on the coin.

So, during inflationary times for the U.S. dollar — when purchasing power is declining and the cost of goods is rising — the role of the Federal Reserve, the central bank that governs the dollar, is key. But cryptocurrencies aren’t beholden to a governing body like that, and thus cannot be controlled or manipulated in the same way that fiat currencies can. This is why many believed or hoped that cryptocurrencies, particularly Bitcoin, would be impervious to inflationary conditions.

Do Cryptocurrencies Experience Inflation?

The terms “inflationary” and “deflationary” refer to whether the supply of a cryptocurrency is growing (inflationary) or shrinking (deflationary). These terms are somewhat separate from the traditional concept of inflation, which focuses on the cost of goods and services.

Bitcoin is largely considered an inflationary crypto because its supply is still increasing, similar to Dogecoin. That said, some consider Bitcoin to be deflationary, because the supply can only increase to a hard cap of 21 million coins, and the rate that they get released to the market through mining decreases over time (a process called “halving”, because the number of Bitcoin mined per block is cut in half every four years). For now the supply of Bitcoin is still increasing, until it has all been mined around the year 2140.

Once all 21 million Bitcoins have been mined, Bitcoin will not be inflationary or deflationary. It will be disinflationary, meaning it has a stable supply and constant monetary base.

Other coins are not as clear cut. Ethereum is considered an inflationary currency, because its supply is increasing — even with the so-called Ethereum Merge — but under a certain protocol, some ETH are burned.

Cryptocurrencies can have very volatile values over short periods of time, making them a risky asset class. Even if they do maintain value when a national currency decreases in value, consumer purchasing power is still affected if the price of goods and services increases — and consumers can’t necessarily rely on crypto as a steady store of value to combat that.

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Crypto vs Fiat Currencies in Periods of High Inflation

During periods of high inflation, fiat currency decreases in value and consumers’ purchasing power goes down. Cryptocurrencies that have a fixed supply could theoretically protect against inflation, and this has been one of the benefits of using crypto for some investors, but the reality is a bit more complicated.

Crypto During Inflation

Although crypto has been talked about as a hedge against inflation, in reality that hasn’t exactly held up, as evidenced by events in 2021 and 2022.

Inflation has been fairly low over the past several years, so the crypto hedge theory hasn’t really been tested thoroughly, but 2022 has seen a sharp increase in inflation along with a crash in both the stock market and cryptocurrencies, suggesting that crypto may not be as safe a hedge as was previously thought.

Also, since so much institutional money has gone into crypto in recent years, some think that helps to explain why crypto tends to follow the broader market and is getting more closely correlated with the S&P 500 and the Nasdaq. It’s difficult to say, as there is no historical precedent that provides a clear comparison for the current situation.

For an asset to be a good hedge against inflation, it needs to be stable and trustworthy. Having a fixed supply is in Bitcoin’s favor, but Bitcoin’s short-term volatility makes it a somewhat unreliable hedge against inflation, although it may be inflation resistant. It might go up in value when the U.S. dollar goes down, but if it then sees a dramatic downswing it may not keep up with the pace of inflation.

For this reason, many investors have returned to gold since the recent drops in the crypto market. On the other hand, the long-term prospects of Bitcoin and other cryptocurrencies have much more potential for growth than another ‘safe’ asset such as gold.

An alternative to cryptocurrencies like Bitcoin is stablecoins. Stablecoins are pegged to an external asset’s value, such as a national currency, making them more stable than other cryptocurrencies. There are stablecoins backed by many different fiat currencies, making it pretty easy to trade between those pegged to the U.S. dollar and other currencies as inflation rates change.

However, holding a stablecoin backed by the U.S. Dollar won’t protect against inflation.

Fiat Currencies During Inflation

Fiat currencies are the opposite of cryptocurrencies in that central banks can create more of them at any time. When more money gets printed, this creates inflation risk. The value of the fiat currency decreases, so the same amount of money will no longer buy the same amount of goods.

Fiat Currencies

Cryptocurrencies

Regulated by central authorities Decentralized
Supply can be increased by central banks; fiat is considered inflationary Crypto can be inflationary or deflationary because supply can be increased or decreased
Lose value when inflation rises May lose or gain value when inflation rises

Tips on Hedging Against Inflation

There are several ways one can possibly protect their money from inflation. These include:

•   Gold and precious metals

•   Commodities

•   Bonds

•   Real Estate Investment Trusts (REITs)

•   The S&P 500

•   Real Estate

•   International diversification

•   Treasury Inflation Protected Securities (TIPS)

💡 Here are more tips and details on hedging against inflation

The Takeaway

During periods of inflation — when purchasing power is declining and the cost of goods is rising — the Federal Reserve can intervene by adjusting monetary policy. Because cryptocurrencies aren’t beholden to a governing body like that, they cannot be manipulated in the same way that fiat currencies can. This is why many believed or hoped that holding cryptocurrencies, particularly Bitcoin, would act as an effective hedge against rising prices.

Crypto is still a relatively new asset class, so in the future it may prove to be a solid hedge against inflation, but it is still a developing and immature sector. Overall, it’s too early to say whether crypto is an effective hedge, but investors are looking to alternatives to the traditional choices of gold and bonds since those are no longer proving reliable.

That said, some believe that Bitcoin is tied more to monetary policy and asset inflation/deflation, not to core inflation. There are some signs indicating that that is the case and it may hold to be true in the future. Between 2020-2022 there have been so many dramatic world events as well, so it’s difficult to pinpoint exactly what crypto is tied to.

FAQ

Is the crypto market causing inflation?

No. The decline in value of many cryptocurrencies in 2022 coincided with a period of inflation in the broader U.S. economy, but that was not caused by the crypto markets.

Does crypto help with inflation? Does it hurt?

Crypto isn’t inherently good or bad for inflation. It is a way to diversify funds away from cash or stocks, which may help protect against inflation — although crypto does not have a long enough track record to know for sure.

Can cryptocurrencies suffer from inflation?

Not exactly. Cryptocurrencies don’t behave like traditional fiat currencies. They aren’t regulated and they don’t offer a consistent store of value, thus they generally aren’t used to make basic consumer purchases. So a drop in crypto values may impact investors’ portfolios, but not the cost of living.

Can you use cryptocurrencies to hedge against inflation?

Cryptocurrencies may be a way to protect against inflation, but they are very volatile and are becoming increasingly correlated with the broader market, so there is no guarantee they will hold value as other currencies decrease.


Photo credit: iStock/akinbostanci

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

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What Companies Accept Dogecoin and Other Cryptos as Payment?

Which Companies Accept Dogecoin and Other Cryptos as Payment?

A growing list of businesses accept cryptocurrencies like Dogecoin as a form of payment, especially as crypto itself becomes more widespread and commonplace. Though Dogecoin is not as big or as popular as Bitcoin or Ethereum, it’s still gaining more and more acceptance among merchants and service providers.

That’s a list that includes airlines, professional sports teams, and many more.

Dogecoin Basics

Dogecoin, as of September 24, 2022, is valued at around $0.06, with a total market cap of more than $8.5 billion. While this may seem like a lot — and enough to put it in the cryptocurrency top ten, according to CoinMarketCap — it’s still relatively small compared to Bitcoin (valued at $19,000 with a $366 billion market cap) or Ethereum ($1,345, $164.4 billion). Yet, it’s still one of the top cryptos by market cap.

History of Dogecoin

Jackson Palmer created Dogecoin in 2013 as both a reference to the then-popular meme and to what was then seen as an explosion of interest in Bitcoin. In early 2018, during another huge runup in crypto prices, Dogecoin’s market cap reached more than $1 billion, which may have been seen as extreme at the time (it would fall back down to around $400 million), but was nothing compared to what was coming.

Between April and May of 2021, Dogecoin’s market cap rose from around $8 billion to almost $95 billion. After values dropped in 2022, it’s currently at around $8.5 billion. So, if you had hopes to see Dogecoin to $100, or to the moon, those hopes have likely been dashed for now.

💡 Recommended: Dogecoin Price History: 2013 to 2022

While traders can buy and sell Dogecoin like any cryptocurrency on mainstream exchanges like Coinbase, it does not have the buzzing hive of developer activity and use in businesses that others do. That’s slowly starting to change.

More than 240,000 people have signed a Change.org petition aimed at getting Amazon to start accepting the coin. While that request hasn’t gotten much traction, there are some businesses that have decided to start accepting it as a means of payment.

How Dogecoin Works

As for how Dogecoin actually works, it’s more or less the same as Bitcoin. Dogecoin is a virtual currency that lives on a blockchain network, operating off of a proof-of-work protocol. That means that participants on the blockchain network can mine new coins.

Transactions are verified and recorded on the blockchain, and new coins are produced, or mined, every minute.

💡 Recommended: SoFi’s Crypto Guide for Beginners

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15 Companies That Accept Dogecoin as Payment in 2022

1. The Dallas Mavericks

The NBA basketball team, owned by billionaire Mark Cuban, is not afraid of the occasional stunt to get attention. In March 2021, the basketball team said in an official statement that it would be accepting Dogecoin for both tickets and merchandise. Cuban explained the reasoning for the decision:

   “The Mavericks have decided to accept Dogecoin as payment for Mavs tickets and merchandise for one very important, earth-shattering reason, because we can! Because we can, we have chosen to do so. We have chosen to do so because sometimes in business you have to do things that are fun, engaging and hopefully generate a lot of PR. So we will take Dogecoin, today, tomorrow and possibly forever more. For those of you who would like to learn more about Dogecoin we strongly encourage you to talk to your teenagers who are on TikTok and ask them about it. They will be able to explain it all to you”

There are some other sports teams that accept cryptocurrencies, too, like the NBA’s Sacramento Kings, the NFL’s Tennessee Titans, the NHL’s San Jose Sharks, and MLB’s Oakland Athletics.

2. AirBaltic

Around the same time the Mavericks said they would begin accepting Dogecoin as payment, the European airline AirBaltic made a similar announcement.

“As an innovative airline, we always strive to search for ways to improve the customer experience starting from the booking process. Over the years around 1,000 clients have used the payment option, which may not seem like a lot, but still offers passengers a unique payment option hard to find elsewhere,” the airline’s CEO Martin Gauss said in a statement.

AirBaltic is majority owned by the Latvian state, adding an official level of approval to a cryptocurrency that, as its founder has said whenever anyone would ask, is meant to be a joke.

3. Newegg

The electronics online retailer said in April 2021 that it would start accepting Dogecoin. “We’re committed to making it easy for our customers to shop however works best for them, and that means letting them complete transactions with the payment method that suits them best. To that end, we’re happy to give Dogecoin fans an easy way to shop online for tech,” a Newegg executive said in a statement.

4. The Kessler Collection

The Kessler Collection owns several luxury hotels throughout the United States. In March 2021, the company said it would “accept Bitcoin, Ethereum, Dogecoin.” The company specifically pointed to cryptocurrencies hitting “an all-time high” as a justification for the expansion of the number of currencies they would accept.

5. Twitch

Twitch is a digital streaming service traditionally used by gamers to broadcast their gaming and associated commentary. Though it’s owned by Amazon, which does not accept Dogecoin or other cryptocurrencies as a valid form of payment, you can use Dogecoin on Twitch. Users can tip streamers in a variety of cryptos, in fact.

6. Tesla

As of early 2022, electric car maker Tesla accepts crypto. Tesla accepts Dogecoin, too, but not all Tesla products are eligible for purchase with crypto, though, so take note before you try and pre-order a Cybertruck with your DOGE holdings.

7. Keys4Coins

Keys4Coins is a digital PC games store, which sells a number of different products and services in the gaming sphere. As the name of the company suggests, it does take coins (crypto coins) as a form of payment, too, including Dogecoin.

8. AMC

You can also buy movie tickets at AMC Theaters with Dogecoin and Shiba Inu, using the company’s mobile app. AMC’s leadership made the announcement in early 2022, and have said that they will accept other cryptocurrencies in the future, too.

9. GameStop

GameStop has embraced its place in the meme space, and has started accepting meme coins, like Dogecoin, as a form of payment. GameStop is getting deeper into the crypto space with NFTs and metaverse projects, too, and is also accepting a short list of other cryptos as well.

10. Bitrefill

Bitrefill is a digital platform that allows customers to buy gift cards or even cell phone air time with crypto. Given the wide range of gift cards available from the retailer, it could be a good way to get a lot of utility from your crypto holdings. Bitrefill accepts Dogecoin, and several other cryptos.

11. Sling TV

You can even pay for your monthly television subscription with Dogecoin, as Sling TV has partnered with a crypto payment processor to accept crypto payments. Along with Dogecoin, you can pay for Sling TV with Bitcoin, Bitcoin Cash, and Ethereum.

12. Menufy

Menufy is an online ordering platform designed for use by restaurants. It allows restaurants to accept cryptocurrency payments through a crypto payment processor. There are thirteen in all, including Dogecoin.

13. ExpressVPN

For those seeking to cover their tracks on the internet, a VPN can go a long way. And now, you can pay for a VPN service using crypto like Dogecoin. ExpressVPN accepts several cryptocurrencies in exchange for using its service.

14. Sheetz

Sheetz, a chain of convenience stores in the eastern United States, is unique among businesses of its type in that it will accept crypto at the gas pump and in the store. That includes Dogecoin, along with Bitcoin and Ethereum.

15. Various Non-Profits

There are many non-profit organizations that allow people to donate money to, or pay them using Dogecoin and cryptocurrency. An internet search will yield many, many results.

Bitcoin

Dogecoin

Ethereum

Tether

Bitcoin Cash

Newegg Yes Yes Yes No Yes
Dallas Mavericks Yes Yes No No No
The Kessler Collection Yes Yes Yes No No
AirBaltic Yes Yes Yes No Yes
Twitch Yes Yes Yes No Yes
Tesla No Yes No No No
Keys4Coins Yes Yes Yes No Yes
AMC Yes Yes Yes No Yes
GameStop Yes Yes Yes No No
Sheetz Yes Yes Yes No Yes
Bitrefill Yes Yes Yes Yes No
Sling TV Yes Yes Yes No Yes
Menufy Yes Yes Yes No Yes
ExpressVPN Yes Yes Yes No No

Pros and Cons of Using Dogecoin for Purchases

There are some considerations, or pros and cons, to take into account when using Dogecoin to make purchases.

On the pro side, Dogecoin’s user base is growing, and so is the potential number of businesses that might accept it. And since Dogecoin is modeled after Bitcoin, it’s relatively easy to transact. It’s also easy to exchange for fiat or other cryptocurrencies, as Dogecoin is listed on most major crypto exchanges.

Conversely, though it’s become more popular, Dogecoin is still not accepted by many businesses, relatively speaking. It’s also worth noting that it’s an incredibly volatile asset, and could lose value before you’re able to make a purchase. Finally, there’s no supply cap for Dogecoin, which could affect its value going forward.

Pros & Cons of Making Purchases With Dogecoin

Pros

Cons

Growing in popularity Still not widely accepted
Easy to transact Fluctuations in value
Easy to exchange No supply cap

Buying Crypto Today

While merchants have not begun accepting any types of cryptocurrencies, many do accept Dogecoin. Given its volatility, however, it can be hard to know whether using Dogecoin to make purchases will end up saving or costing the buyer money.

FAQ

Which retailers will accept Dogecoin?

Many retailers accept Dogecoin, such as Sheetz, GameStop, and Newegg. It’s likely that more will in the future, too.

How many companies accept Dogecoin as payment?

It’s hard to pin down just how many companies accept Dogecoin as payment, but the list is likely growing by the day. As cryptocurrency becomes more commonplace, it’s likely that more companies will accept it as payment, and Dogecoin may be among those cryptos.

Does Amazon take Dogecoin?

No, Amazon does not accept Dogecoin as a form of payment. In fact, it doesn’t accept any cryptocurrencies at all.


Photo credit: iStock/Ksenia Raykova

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

2Terms and conditions apply. Earn a bonus (as described below) when you open a new SoFi Digital Assets LLC account and buy at least $50 worth of any cryptocurrency within 7 days. The offer only applies to new crypto accounts, is limited to one per person, and expires on December 31, 2023. Once conditions are met and the account is opened, you will receive your bonus within 7 days. SoFi reserves the right to change or terminate the offer at any time without notice.

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12 Benefits of Cryptocurrency in 2022

14 Benefits of Cryptocurrency in 2023

The primary benefit of Bitcoin and most other cryptocurrencies based on blockchain technology is that many of them lack a central authority, payment processor, or company owner. From this stems several other benefits, such as ease of transactions, potential for higher return for traders, and even relatively good network security.

Since crypto networks tend to be peer-to-peer, meaning that people can transact directly with one another. Let’s look at some of the advantages of cryptocurrency in this crypto guide.

Benefits of Owning Crypto in 2023

1. Easy Transactions

Crypto transactions can be made easily, generally at a low cost, and in a relatively private manner. Using a smartphone app, hardware wallet, or exchange wallet, almost anyone can send and receive a variety of cryptocurrencies.

Some types of cryptocurrencies, including Bitcoin, Litecoin, and Ethereum, can be purchased with cash at a Bitcoin ATM. A bank account isn’t always required to use crypto, so it’s possible that someone could buy Bitcoin at an ATM using cash, then send those coins to their digital wallet or phone. This may be a huge advantage for people who might lack access to the traditional financial system.

2. Relatively Secure

Because cryptocurrencies are rooted in cryptography and blockchain security, decentralized cryptocurrencies tend to make for secure forms of payment. As such, the relative security of cryptos may be one of the biggest benefits for users.

Crypto security, in large part, is determined by hash rate. The higher the hash rate, the more computing power is required to compromise the network. Bitcoin is considered to be the most secure cryptocurrency, as it tends to have a higher hash rate than other networks.

Note, though, that using a crypto exchange is only as secure as the exchange itself, however. Most incidents of crypto being hacked involve exchanges being hacked or users making mistakes, like falling for phishing scams.

3. Short Settlement Times and Low Fees

While some people may only want to invest in cryptocurrency to take advantage of (prospective) price appreciation, others might find benefit in the ability to use crypto as a medium of exchange.

Bitcoin and Ether transactions can range from a few cents, to several dollars or more. Other cryptocurrencies, like Litecoin, XRP, and others, might be able to be sent for less. Payments for most cryptos settle within minutes, and some within seconds. Conversely, wire transfers at banks can cost significantly more, and often take three to five business days to settle.

4. Exponential Industry Growth

The cryptocurrency industry has been one of the fastest-growing markets that most of us have seen in our lifetimes, especially since the industry got its start with the debut of Bitcoin back in 2009. The total market cap of the cryptocurrency market in 2013 was about $1.6 billion. By September 2022, it’s worth more than $930 billion. That, too, is including the so-called “crypto winter” that the crypto markets experienced for much of 2022.

So, while the industry as a whole has seen incredible growth over the past decade, it’s important to keep in mind that markets ebb and flow.

5. The Possibility of Outsized Returns

Bitcoin has been one of the best-performing assets of the last 13 years. When it debuted in 2009, Bitcoin essentially had no value, but in the following years, it would rise to a fraction of a penny, and then eventually to tens of thousands of dollars. This represents millions of percentage points’ worth of gains. By comparison, the S&P 500 index of stocks returns an average of about 8% per year.

💡 Recommended: Bitcoin Price History: 2009-2023

Some altcoins have outperformed Bitcoin by wide margins at times, although many of those later saw their prices collapse. Gains like these might be among the most well-known cryptocurrency benefits. The losses, on the other hand, may be among the most well-known drawbacks. And that’s important to note, as crypto prices have fallen quite a bit, as of late. For example, during 2022, Bitcoin’s price has fallen by more than 60% as of September.

That type of volatility has characterized prices in the crypto space, which has been one of the key benefits of cryptocurrency for day traders and speculators, too. Taking advantage of the fluctuations in price can help traders earn returns, even if prices fall.

6. More Private Transactions

Privacy can be a big benefit of cryptocurrency, but crypto isn’t always as private as some people might think. Blockchains create a public ledger that records all transactions forever. While this ledger only shows wallet addresses, if an observer can connect a user’s identity to a specific wallet, then tracking transactions becomes possible.

While it’s worth noting that most crypto transactions are pseudonymous, there are ways to make more anonymous transactions. Coin mixing services group transactions together in a way that makes it hard to pick them apart from one another, which can make it difficult to track for outside observers. Individuals who run a full node also make their transactions more opaque because observers can’t always tell if the transactions running through the node were sent by the person running the node or by someone else.

Methods like these are for more advanced users and could prove difficult for those new to crypto. So while absolute privacy is really not one of the main positives of cryptocurrency, transactions are still generally more private than using fiat currency with third-party payment processors.

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7. Portfolio Diversification

Cryptocurrency has become known as a non-correlated asset class. Theoretically, crypto markets largely function independently of other markets, and their price action tends to be determined by factors other than those affecting stocks, bonds, and commodities. Though that theory has been tested this year, as assets of all types of slipped, including cryptocurrencies. It’s worth noting, though, that during the last few years, cryptos have begun to sometimes trade in tandem with stocks for short periods of time.

So, in terms of diversification, cryptocurrencies offer investors another vehicle with which to try and grow their money outside of stocks, ETFs, or bonds. Crypto has its own unique risks, but it is another avenue for potential returns for investors.

8. Potential Inflation Hedge

Mineable cryptocurrencies with a limited supply cap, like Bitcoin, Litecoin, and Monero, to name a few, were traditionally thought to be good hedges against inflation. Because monetary inflation can occur when central banks and governments print more money (increasing the supply), things that are more scarce tend to appreciate in value.

With more and more new dollars chasing fewer and fewer coins, the price of these fixed-supply coins as measured in dollars has a higher chance of going up. Additionally, the Bitcoin protocol, for example, is also designed to keep those coins scarce regardless of what happens with monetary policy.

The potential of cryptos to stand up to inflation has been yet another test this year, as we’ve experienced higher rates of inflation than in several decades. As mentioned, crypto prices have fallen, but it’s hard to say how much of that has to do with inflation. Crypto may still serve as a hedge, but it may not be as ironclad of a concept as it once was.

9. Cross-Border Payments

Cryptocurrencies have no regard for national borders. An individual in one country can send coins to someone in a different country without any added difficulty. With traditional financial services, getting funds across international borders can take a long time and come with hefty fees. In some cases, doing so might not even be possible due to regulations, sanctions, or tensions between specific countries.

But again, cryptocurrency gets around all of that, as users can engage in peer-to-peer transactions from anywhere in the world.

10. A More Inclusive Financial System

Some of the benefits of cryptocurrency extend to people who don’t have access to, or perhaps don’t trust, the traditional financial system. Due to its decentralized and permission-less nature, one of the benefits of cryptocurrency is that anyone can participate outside of that system.

People don’t need permission from any financial authority or government to use the crypto ecosystem. (Though it’s worth noting that Bitcoin mining is banned in China, and that there may be other local rules and regulations to take not of.) Participants also don’t necessarily need to have a bank account. There are billions of people today who are “unbanked,” meaning they have no access to the financial system, including bank accounts. With crypto, however, the only thing those people need is a smartphone, and they can essentially become their own bank.

11. Transactional Freedom

One of the great benefits of crypto is that it can be used to exchange value between two parties. This can be done independently of any third-party, making the transaction about as free as it can get. It’s similar to handing a dollar bill to a friend on the street.

Banks, or other payment processors, can choose to cut off services to anyone for any reason. This can make things difficult for some journalists, political dissidents, or other individuals working in nations with oppressive government regimes. Because there is no central authority governing Bitcoin or most other cryptocurrencies, it’s very difficult to stop anyone from using them.

12. Always-Open Markets

Stock markets, like the New York Stock Exchange (NYSE), are only open on weekdays during the regular business hours of 9:30 am to 4:30 pm Eastern Time. During nights, weekends, and on holidays, most traditional financial markets are not open for business.

Crypto markets, on the other hand, operate 24 hours a day, seven days a week, without exception. Some of the only things that could interrupt a person’s ability to trade cryptocurrency would be a power outage, internet outage, or centralized exchange outage.

13. Adaptability

Some cryptocurrency projects take measures to become more efficient or resource-intensive. That’s a big difference between, say, the traditional banking system, which is often stuck utilizing outdated technologies and protocols.

One example: “The Merge,” which involved Ethereum moving from a Proof-of-Work model to a Proof-of-Stake model, effectively ending mining operations, and instead, adopting a much more efficient operating model. The ability of cryptos to change things up in a big way, and on a widespread, operating level, means that it has another advantage over traditional systems.

14. Specialization

Some cryptos can be designed specifically for certain projects or uses. Some cryptos, for instance, are designed to work with metaverse projects or games, and can be used to help create in-game assets or tokens.

The Takeaway

Transactional freedom, security, and ease of transaction are among the most important advantages of cryptocurrency. Many cryptos are designed to have unique advantages over fiat currencies or the traditional banking system, even if they don’t have widespread use or adoption yet.

Of course, there are potential flaws as well — volatility being a major downside. As with anything, though, those interested in buying, selling, and trading crypto would be wise to do their research before getting involved in the crypto market.

FAQ

Is cryptocurrency a good investment?

Cryptocurrency can be a worthwhile investment, and has numerous benefits for investors. It is, however, a speculative investment, and there are lots of risks unique to the crypto markets. As such, investors should do their homework before getting in the market.

What should you know before trading cryptocurrency?

There are many considerations to take into account before trading crypto, including the fact that there are numerous exchanges, ways to trade, and coins on the market. Prospective traders should also know that fees may be involved, and that crypto is a highly volatile asset class.

How do I weigh up the pros and cons of each cryptocurrency?

Many cryptocurrencies are similar, but most are their own, individual projects. As such, researching how they each work, what their intended use is, and what the potential drawbacks are for each crypto is a good place to start when weighing pros and cons.


Photo credit: iStock/insta_photos

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

2Terms and conditions apply. Earn a bonus (as described below) when you open a new SoFi Digital Assets LLC account and buy at least $50 worth of any cryptocurrency within 7 days. The offer only applies to new crypto accounts, is limited to one per person, and expires on December 31, 2023. Once conditions are met and the account is opened, you will receive your bonus within 7 days. SoFi reserves the right to change or terminate the offer at any time without notice.

First Trade Amount Bonus Payout
Low High
$50 $99.99 $10
$100 $499.99 $15
$500 $4,999.99 $50
$5,000+ $100

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What is a 51% Attack?

What Is a 51% Attack?

A 51% attack is when a cryptocurrency miner or group of miners gains control of more than 50% of a network’s blockchain. The 51% attack scenario is rare — especially for more established cryptocurrencies — mainly because of the logistics, hardware, and costs required to carry one out. But a successful block attack may give the attacker complete control of the network and allows them to double-spend coins, prevent other transactions from confirming, and block other miners from mining.

Cryptocurrency investing can be potentially lucrative, but it involves a higher degree of risk, especially compared with stock or bond investing. And 51% attacks could be a threat for people who use, buy, and sell cryptocurrencies. If an investor is considering adding digital currencies to their portfolio, it’s important to understand the implications of a 51% attack.

Background on 51% Attacks

A 51% attack is an attack on a blockchain, which is a type of digital database in ledger form. With blockchain technology, information is collected in groups or blocks and linked together to create a data chain. In cryptocurrency trading, blockchains are used to record approved transfers of digital currencies and the mining of crypto coins or tokens.

With many cryptocurrencies, “miners” can attempt to add blocks to the chain by solving mathematical problems using mining machines — a process known as Proof of Work. These machines are essentially a network of computers. If miners succeed in adding a block to the chain, they receive cryptocurrency in return.

The speed at which all the mining machines within the network operate is the hashrate. A good hashrate can help gauge the health of the network.

A 51% attack occurs when one or more miners take control of more than 50% of a network’s mining power, computing power, or hashrate. If a 51 percent attack is successful, the miners responsible essentially control the network and certain transactions that occur within it. This could mean that the attackers could double-spend coins or manipulate transactions.

Additionally, a 51% attack on a blockchain could damage the reputation of a cryptocurrency, leading to a decline in value as investors sell their crypto.

Examples of a 51% Attack

51% attacks are not just a theoretical concern. There have been a few notable examples of 51% attacks in the past, including:

•   A 2018 attack on Bitcoin Gold (BTG) resulted in over $18 million worth of the currency being double spent.

•   Multiple attacks on Vertcoin (VTC) in 2018 resulted in doubling spending of more than $100,000 worth of VTC.

•   A 2019 attack on Ethereum Classic (ETC) resulted in over $1 million of the currency double spent. Additionally, the crypto faced three attacks in 2020.

•   A 2020 attack on Grin (GRIN), though the blockchain was able to regain control.

•   Three attacks on Bitcoin SV (BSV) occurred in 2021, damaging its reputation.

Most 51% attacks occur on smaller cryptocurrencies. Experts say it’s unlikely that major cryptocurrencies will face a successful 51% attack because it is prohibitively expensive to take control of more than half of mining power.

Recommended: Understanding the Different Types of Cryptocurrency

How a 51% Attack Works

When a cryptocurrency transaction occurs, newly mined blocks must be validated by a consensus of nodes or computers attached to the network. Once this validation occurs, the block can be added to the chain.

The blockchain contains a record of all transactions that anyone can view at any time. This record keeping system is decentralized, meaning no single person or entity has control over it. Different nodes or computer systems work together to mine, so the hashrate for a particular network is also decentralized.

However, when one or more miners control a majority of the hashrate, the cryptocurrency network is disrupted. This disruption is a 51% attack. Those responsible for a 51% attack would then be able to:

•   Exclude new transactions from being recorded

•   Modify the ordering of transactions

•   Prevent transactions from being validated or confirmed

•   Block other miners from mining coins or tokens within the network

•   Reverse transactions to double-spend coins

These side effects of a block attack can be problematic for cryptocurrency investors and those who accept digital currencies as payment.

For example, a double-spend scenario would allow someone to pay for something using cryptocurrency, then reverse the transaction after the fact. The malicious actor would effectively be able to keep whatever they purchased along with the cryptocurrency used in the transaction, bilking the seller.

What a 51% Attack Means for Cryptocurrency Investors

A 51% attack isn’t a common occurrence, but it’s not something that can be brushed off. For cryptocurrency investors, the biggest risk associated with a 51% attack may be the devaluation of a particular digital currency.

If a cryptocurrency is subject to frequent block attacks, that could cause investors to lose confidence in the market. Such an event could cause the price of the cryptocurrency to collapse.

The good news is that there are limitations to what a miner who stages a 51% attack can do. For example, someone carrying out a block attack wouldn’t be able to:

•   Reverse transactions made by other people

•   Alter the number of coins or tokens generated by a block

•   Create new coins or tokens from nothing

•   Transact with coins or tokens that don’t belong to them

The larger a blockchain grows, the more difficult it becomes for rogue miners to attack it. On the other hand, smaller networks may be more vulnerable to a block attack. Investors may be able to insulate themselves against the possibility of a 51% percent attack by investing in larger, more established cryptocurrency networks versus smaller ones.

Ways to Prevent a 51% Attack

50% Limit on a Single Miner

A blockchain’s protocol could ensure that no miner or a group of miners controls more than 50% of the blockchain’s hashing power.

Using Proof of Stake

A blockchain could use a more robust blockchain consensus algorithm. Some consensus algorithms, like Proof of Stake, are more resistant to 51% attacks than others, like Proof of Work.

Strong Network Community

A blockchain’s strong community could help prevent a 51% attack, especially if the blockchain uses a Proof of Stake (PoS) consensus algorithm. With PoS, the community must vote to determine if a user can be a block validator, which is like a miner in a Proof of Work system. If the community senses that a user is amassing power to attack the blockchain, they can throw the user out of the network, preventing an attack.

The Takeaway

Cryptocurrency investing may appeal to investors if they’re comfortable taking more risks to pursue higher returns. If an investor is new to cryptocurrency trading, the prospect of a 51% attack might seem intimidating. Understanding how they work and the likelihood of one occurring can help them feel more confident.

FAQ

What’s the difference between a 51% attack and a 34% attack?

A 51% attack is a type of attack in which a group of miners takes control of more than 50% of the total computing power of a cryptocurrency network. This allows them to double-spend coins, prevent other transactions from being confirmed, and so on. A 34% attack is a type of attack in which a group of miners takes control of more than 34% of the total computing power of a cryptocurrency network. This may allow the attacker to approve or disapprove transactions, though it does not allow them to take full control of the blockchain.

Can a 51% attack reoccur?

Yes, a 51% attack can reoccur. A 51% attack could reoccur if the original attacker regains control of 51% of the network’s hash power or if another entity gains control of 51% of the network’s hash power. Multiple attacks on a blockchain may occur if steps are not taken to improve a blockchain’s security.

Who is at risk of a 51% attack?

Smaller cryptocurrencies are more at risk of a 51% attack. It is less expensive and energy-intensive to amass 51% control of hashing power for smaller cryptocurrencies than larger and more established cryptos.


SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

2Terms and conditions apply. Earn a bonus (as described below) when you open a new SoFi Digital Assets LLC account and buy at least $50 worth of any cryptocurrency within 7 days. The offer only applies to new crypto accounts, is limited to one per person, and expires on December 31, 2023. Once conditions are met and the account is opened, you will receive your bonus within 7 days. SoFi reserves the right to change or terminate the offer at any time without notice.

First Trade Amount Bonus Payout
Low High
$50 $99.99 $10
$100 $499.99 $15
$500 $4,999.99 $50
$5,000+ $100

SOIN0922063

Read more
How to Create, Buy, and Sell NFTs: Easy Guide

Simple Guide to Buying, Selling, and Making NFTs

Non-fungible tokens (NFT) have become one of the most popular parts of the crypto world. From 2020 to 2021, the NFT market skyrocketed; NFT sales totaled $24.9 in 2021, up from $95 million in 2020. And though the market cooled off in 2022, NFTs still play a significant role in the crypto market, the metaverse, and Web3.

Many famous artists and celebrities have created and sold NFTs and NFT collections. Digital artist Mike Winkelman, known as Beeple, recently sold an NFT for $69 million, and soccer great Lionel Messi launched his own NFT collection. But you don’t have to be famous to create or trade NFTs. Read on to learn more about the NFT market, and how you can create and use these digital assets.

Understanding NFTs

Non-fungible tokens, commonly called NFTs, are collectible crypto assets intended to represent a unique digital item that can be bought, sold, or traded.

NFTs exist on blockchain technology and, unlike digital assets such as cryptocurrencies, each NFT is unique and cannot be replaced by another token. This is because NFTs are non-fungible. The term “fungible” refers to something that can be exchanged or traded for something else just like it. A dollar bill, for example, is fungible because all dollar bills are more or less the same. And one dollar bill represents $1.

An NFT acts as a representation and proof of ownership for either digital or physical items. Some of the most popular NFTs represent ownership of digital artwork, virtual real estate in a game, or collectibles, like basketball or Pokemon trading cards. These NFTs can then be sold and purchased.

The first NFT was created in 2014, and the market for NFTs has grown rapidly in recent years.

How to Create and Sell NFTs

For those more interested in creating NFT art, minting a piece of NFT artwork is relatively straightforward and does not require in-depth knowledge of the crypto industry. The following steps can help you create an NFT.

1. Create a Piece of Art

You first need to create a piece of art that you’ll want to turn into an NFT. You may decide to make a digital image, audio production, or video. Most marketplaces support NFTs that represent JPEG, MP3, MP4, TXT, and other digital files.

2. Choose a Blockchain

A creator must figure out which blockchain they want to issue their NFTs. Ethereum is the most popular blockchain service for this purpose at this time, but a variety of other blockchains are gaining in popularity, such as:

•   Tezos

•   Polkadot

•   Flow

•   Binance Smart Chain

Each blockchain has its unique NFT standards, marketplaces, and wallet services. If someone were to create NFT tokens on Binance Smart Chain, traders could only use those NFTs on platforms that support Binance Smart Chain assets. So, they couldn’t sell them on an NFT marketplace like OpenSea, which supports Ethereum and Klaytn blockchains.

3. Get a Wallet

You’ll need to set up a cryptocurrency wallet to pay a marketplace’s fees and receive payment once you sell your NFT.

Since Ethereum is the most commonly used NFT ecosystem, let’s look at what’s needed to create a new NFT on the Ethereum blockchain. First, an NFT creator would need an Ethereum wallet that supports ERC-721, Ethereum’s NFT token standard. Some wallets that qualify include Coinbase Wallet, MetaMask, Trust Wallet, Enjin, and D’Cent.

An NFT creator will also need to fund their wallet with a specific amount of Ether (ETH) tokens that eventually cover transaction fees. Those using the Coinbase wallet can buy ETH from Coinbase with U.S. dollars or another fiat currency. Other users will have to purchase ETH from a crypto exchange and send it to their digital wallet.

4. Find a Marketplace to Sell Your Art on

Before you create and sell your NFT art, you’ll need to choose the marketplace to list your NFT. There are now many NFT marketplaces from which to choose. Depending on your art and interests, you may choose a curated marketplace that specializes in specific kinds of art or a general open marketplace.

Also, you’ll want to keep in mind that marketplaces may charge users minting fees, and there may also be Ethereum gas fees and other costs for listing and transacting on the platform.

5. Minting an NFT

You’re now finally ready to mint your NFT. Most NFT marketplaces offer a step-by-step guide for uploading your digital file to their platform. That process will enable you to turn your digital art into a marketable NFT, known as minting an NFT.

Recommended: What Does Minting an NFT Mean?

6. Sell Your NFT

Once you’ve minted your NFT, you can choose to sell it. There are generally three options to sell your NFT art:

•   Fixed price: This allows you to set a price for the NFT and sell it instantly if a buyer is willing to buy the NFT at that price.

•   Timed auction: A timed auction will give those interested in your NFT a time limit to submit bids.

•   Unlimited auction: There is no set time limit with an unlimited auction. Instead, the seller can choose to end the auction whenever they want.

You also need to set a minimum price and determine the royalties you’ll be paid if the NFT is resold. NFT creators may earn royalties for their artwork when someone sells their tokens to a new person. Creators earn royalties automatically through smart contracts.

How to Buy NFTs

In some ways, buying and selling NFTs is similar to trading different types of crypto. But before learning how to buy NFT tokens, there are a few things worth considering, such as:

•   What marketplace do you intend to use?

•   Which cryptocurrency will be needed to fund your crypto wallet and make the purchase?

•   Are the NFTs you’d like to buy only available at a certain time?

Some NFTs are only available on certain platforms or marketplaces. For example, someone who wants to buy an NBA Top Shot pack of virtual trading cards must open an account with NBA Top Shot and create a Dapper wallet. Other NFT marketplaces include OpenSea, Rarible, Foundation, and Nifty Gateway.

The buyer will then fund their cryptocurrency wallet with either cryptocurrency or fiat currency options. You’ll then have to connect your wallet to the NFT marketplace. After that, you can start browsing the marketplace’s offerings and make a purchase.

For NBA Top Shot, a buyer must wait for a card pack to drop and buy a pack before they sell out.

NFT drops have become a popular method of selling NFTs to eager buyers. Drops like these often require users to sign up and have their accounts funded before the drop so they don’t miss their chance to buy once the NFTs drop.

Drops can sell out in seconds, so being ready ahead of time can be crucial. Of course, other NFTs and NFT platforms don’t utilize drops.

How to Sell NFTs

If you own an NFT, you’ll need to decide whether you want to HODL it or sell it. To sell an NFT, you must list the token on a marketplace. To do this, click on the NFT in your collection that you’d like to sell and locate the “sell” button. Clicking on “sell” will bring up a pricing page, allowing you to set the terms of the sale. As noted above, you can choose either a fixed price or an auction sale.

NFTs typically sell for ETH or ERC-20 tokens. However, some platforms only let you sell for the native token of their blockchain.

NFT Sale Fees

NFT sale fees are the charges associated with selling an NFT. These fees can vary depending on the platform used to sell the NFT. Anyone interested in making, buying, or selling an NFT need to consider the various costs associated with the market because they could eat into any potential profits.

Some fees associated with NFTs include gas, transaction, royalty, and minting fees.

Popular NFT Marketplaces

OpenSea

OpenSea is one of the most used NFT marketplaces. OpenSea offers all kinds of digital assets, from art to music to collectibles, which are free to browse. It also gives artists and creators an easy-to-use process to mint their NFTs.

Rarible

The Rarible platform allows all kinds of art, videos, collectibles, and music to be bought, sold, or created. Rarible has its own token (RARI), which you’ll need to use to buy and sell on the Rarible marketplace.

Foundation

Since Foundation’s launch in early 2021, more than $100 million of NFTs have been sold on the platform. To join the Foundation marketplace, users must get an invitation from a current artist on the platform.

Nifty Gateaway

Nifty Gateway has been the marketplace for the sale of some of the most popular digital artists, such as Beeple, Grimes, and Pak. It’s an art curation platform powered by the crypto exchange Gemini.

SuperRare

As its name suggests, the SuperRare marketplace is a highly selective platform focusing on art rather than meme and celebrity NFTs.

Pros and Cons of NFTs as an Investment

Pros and Cons of NFTs

Pros

Cons

Ownership of NFT is secured by blockchain technology NFTs are relatively new and are subject to greater volatility and risk
NFTs can be bought, sold, or created at any time, giving investors the ability to cash out their investment 24/7 NFTs generate no revenue, unlike dividend-paying stocks, bonds, and real estate
Investors can use NFTs to diversify a financial portfolio NFTs are not regulated, which could pose a risk to investors

Crypto Investing

Learning how to buy NFTs or create and sell them is not challenging. Developers have created graphic user interfaces that make the process as painless as possible. Of course, having previous experience using cryptocurrency wallets will be a big help.

FAQ

Can anyone make NFTs?

Yes, there is no centralized authority that controls the creation of NFTs. Anyone with an internet connection and the necessary technical skills can create an NFT.

Can NFTs be made completely for free?

You can create NFTs for free, but it depends on what blockchain and marketplace you use to mint your NFT. Usually, NFT creators will need to pay costs related to gas fees.

What are some places where you can buy NFTs?

You can buy and sell NFTs on various marketplaces, including OpenSea, Rarible, NBA Top Shot, SuperRare, and Foundation.


Photo credit: iStock/asbe

SoFi Invest®
INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

2Terms and conditions apply. Earn a bonus (as described below) when you open a new SoFi Digital Assets LLC account and buy at least $50 worth of any cryptocurrency within 7 days. The offer only applies to new crypto accounts, is limited to one per person, and expires on December 31, 2023. Once conditions are met and the account is opened, you will receive your bonus within 7 days. SoFi reserves the right to change or terminate the offer at any time without notice.

First Trade Amount Bonus Payout
Low High
$50 $99.99 $10
$100 $499.99 $15
$500 $4,999.99 $50
$5,000+ $100

SOIN0721292

Read more
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