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FAQs

We all have questions when it comes to crypto and investing. Below are some frequently asked questions and answers when it comes to what crypto is, why one should invest in crypto, and what it takes to invest in crypto.

Frequently Asked Questions

What is an accredited investor?


Only accredited investors are eligible to invest in the Offered Products. An accredited investor includes:

  • Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or
  • Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000 (excluding the value of the person’s primary residence and certain indebtedness secured by such person’s primary residence).
  • Individual investors who hold, in good standing, certain professional certifications and designations and other credentials designated by the Commission as qualifying for accredited investor status. The Commission designated three certifications and designations administered by the Financial Industry Regulatory Authority, Inc. as qualifying for accredited investor status:

  1. Licensed General Securities Representative (Series 7);
  2. Licensed Investment Adviser Representative (Series 65); and
  3. Licensed Private Securities Offerings Representative (Series 82)




What are the benefits of adding digital assets to my portfolio?


Digital currencies possess many unique qualities. Because digital currencies are borderless, fungible, and accessible, they may be a great way to diversify your portfolio. Additionally, because of these unique qualities, digital currencies have historically been uncorrelated with other more traditional asset classes, such as stocks and bonds. In a market environment with geopolitical uncertainty and volatility, investors may benefit from a non-correlated asset class.




What are Cryptocurrencies?


This is a seemingly simple question, but since most people answer about what they think, hope, or want cryptocurrencies to be, it is a confusing one. Cryptocurrencies are a digital asset that started as a medium of exchange for people to buy goods and services. Over time, their functionality has expanded.




How are cryptocurrency transactions recorded?


Cryptocurrency transactions are recorded on a shared, digital ledger called a blockchain. This is decentralized technology, spread across many computers, that records every transaction.




Are blockchain and cryptocurrencies the same?


No. Blockchain is the technology that allows for cryptocurrencies to work. It is a decentralized and digital ledger of transactions used for cryptocurrencies and other assets/functions. It is important to separate the technology behind cryptocurrencies from the actual cryptocurrencies.




Help me with the lingo — crypto, coins, tokens, ICOs.


  1. Crypto — umbrella term for all digital and/or virtual currencies
  2. Coins — Generally, any cryptocurrency that has its own separate blockchain
  3. Tokens — Generally, any cryptocurrency that is built on top of existing blockchain, e.g., some companies issue their own cryptocurrencies, called tokens, which can be used to purchase goods or services specifically from issuing company
  4. ICO — Short for Initial Coin Offering, this is analogous to a privately held company going public via an initial public offering (IPO)—a way to raise funds for a new cryptocurrency or expand services for existing coins,




Why invest in cryptocurrency?


  • A Stable, Censorship-Resistant Store of Value
  • Desire for a reliable, long-term store of value. Unlike fiat money, most cryptocurrencies have a limited supply, capped by mathematical algorithms. This makes it impossible for any political body or government agency to dilute their value through inflation. Moreover, due to the cryptographic nature of cryptocurrencies, it is impossible for a government body to tax or confiscate tokens without the cooperation of the owner.
  • This property makes cryptocurrency attractive to people who are worried about hyperinflationary events, bank failures, or other disaster scenarios. Bitcoin in particular has attracted attention due to its deflationary and censorship-resistant properties, leading proponents to describe it as"digital gold."




What is a cryptocurrency wallet?


  • This is all about storing a cryptocurrency, wallet concept can be daunting a bit for the uninitiated. Basically, there are wallet software (this can be desktop, online or mobile), hardware based wallets, and of course the paper wallets. Talking about the “best” wallet in the ecosystem will be different for each one of us, it depends on a particular needs.
  • Wallets don’t just store cryptocurrency directly. It is accurate to think wallet as storing private keys. The Public key cryptography allows cryptocurrency to function, and uses a specific algorithms in order to generate pairs of keys. Public key is the address to which anyone can send its cryptocurrency balance. The private key allows owners spend funds from the specified address. Without the private key, public address becomes bottomless pit that you can only see; money still be sent there, but lost without a private key.
  • The type of wallets simply represents various ways a certain can secure their secret private key. There are two main types of cryptocurrency wallet, the hot and cold, these refers to the level or internet connectivity of the wallet. Paper wallet and hardware wallets are not actively connected to internet and considered as cold storage. Hot wallet is internet connected wallet, easy to spend, but vulnerable to cyber-attacks. A cold storage protects you from cyber-crime, but still it will be the owner’s responsibility to secure their property.




Why invest with Birchrock Capital?


Crypto is incredibly complicated, and investors need to either sacrifice time on other projects to become an expert or have an enormous amount of trust in their team. With a proven track record, Birchrock Capital operates within the existing regulatory framework, creating exposure for investors in a secure and compliant manner, helping you to navigate the digital assets world as we tirelessly and continuously inspect, monitor and compare projects ensuring that the best decisions are made with the interest of all investors at the forefront. Full transparency and open communication in all aspects of business.




Where can I find more information?


For more information or follow-up questions, please contact us directly at invesments@birchrockcapital.com





 

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Birchrock Capital makes no representations or warranties as to the accuracy or timeliness of the information contained herein.