What is Golem
Golem is Airbnb. Confused? Let me explain.
Airbnb uses idle rooms or properties to make money for the property owner. If the landlord does not have a use for it at that time, they can rent it out.
Walkthrough Video that Explains How to Buy Golem Online
The same logic applies to Golem. However, rather than using vacant property it uses idle computing power. Computers and other devices can sit idle not using portions of their computing power. Golem aims to harness this idle power to help boost processing, software performance and speed on other devices.
The provider of the idle energy will be rewarded in Golem tokens.
A similar analogy is when investing in company shares. Excess (or idle) capital not being used, is put to work for the company whilst paying the investor (or user) a dividend (or golem token).
What is so special about Golem
If Airbnb is anything to go by then Golem certainly has a good idea on its plate. And I would imagine that very few people would dislike the idea of using idle power to essentially move the internet into a more fluid state.
The Potential of Golem
This technology would certainly have huge benefits for businesses around the world. Individuals, companies and institutions would have access to a large reserve of energy to fill any service gaps they require.
Should a company have peak times their power output is tested, the Golem system can be used. Should a company come under attack from computer virus, the company would have access to extra computing power to fight it.
This will be able to speed up multiple processes within a company's infrastructure, which ultimately will increase efficiency and widely speaking efficient businesses are more successful businesses.
Golems Ethereum Connection
Now, saying and doing are two different things. Currently the Golem tokens are rewarded using the Ethereum platform through smart contracts. So, already we have something Golem is dependent on. Should Ethereum start to encounter problems and, lets say, begins to wither out of the crypto market, this will have a knock-on effect on Golem and unless they can devise a new way to trade Golem tokens, Golem will ultimately follow suit.
Currently Ethereum is second in the cryptocurrency market cap table and does have lots of prospects but it is a risk none the less.
There are other risks associated with Golem, basic supply and demand. If the demand for power out weighs the supply, the service would essentially not work. If a user wanted it for a specific demand or for their peak power times and there is a shortage of power in general, then Golem is not producing the product it advertises.
Given the examples mentioned, if you were under attack by a computer virus and wanted extra power, when it does not arrive, that service did not fulfil its obligation.
The same principle applies to your heating at home. If you are cold during winter and you go to turn the heating on, if it does not come on, your energy provider has not fulfilled their obligation and you ultimately will go to someone you feel will.
The other side of the coin is when supply exceeds demand and the incentive to the providers becomes fruitless.
Should I buy or trade Golem?
As we have discussed above, Golem is far from finished article. But do you want to buy it when it is? Once a product is completed and adopted by the masses, the price has already increased and stabilised. The investment potential is often gone.
That being said, Golem is still an idea but the idea phase can offer you the best return on investment. Especially in the case of Golem, if the idea comes to fruition the upsides are huge.
As is the case with nearly all investments, when there are huge returns at stake, there is often huge risks at stake. In the case of Golem, because you are investing in a product that is still in the idea phase, there is every chance that it will not progress through that phase and ultimately fizzle out as an idea and product or technology. This would likely mean you would lose 100% of your investment.
Given the current price of Golem ($0.31 per token, as of time of writing), there may be good reason to play the long game.
As Golem is a relatively new cryptocurrency, it is yet to make it onto any brokers radars just yet. Meaning that you currently cannot trade it in the form of CFDs.
That said, you can still trade it through cryptocurrency exchanges. The likes of Poloniex, coinswitch and other exchanges make trading Golem very easy.
As we seem to be seeing cryptocurrencies becoming more volatile, this will undoubtably attract traders to these markets. With such huge swings there is a lot of money to be made (and lost).
Identifying the best entry and exit points will certainly result in excellent returns. As with all types of investment you will always run the risk of losing your initial investment so it is always advised to be cautious and to manage your risk appropriately.
How to buy Golem online - step by step guide
Golem is cetainly an exciting prospect but it is still just that, a prospect. Until it becomes a reality, it is likely to rank lower in the market cap table compared with other cryptocurrencies. Because of this we are yet to see Golem on any of the more established exchanges.
Coinbase and Coinfloor are two exchanges you can use to buy cryptocurrency with fiat currency, however you cannot buy Golem directly on there yet. In order to buy Golem with fiat currency, you first must buy another cryptocurrency and then trade that for Golem tokens.
This does create an extra step when looking to buy Golem, but this is the same with most other smaller cryptocurrencies.
To own Golem you must have somewhere to store the tokens. This is called a wallet, it acts similar to your email as it has an address that your coins are sent to and a password for security. Currently there are no specific wallets designed solely for Golem, however because Golem uses the Ethereum platform you can send Golem coins to Ether wallets.
To buy Golem:
- Open a Coinbase account by filling in same form as pictured below. In this step by step we will use Bitcoin because it is the market leader in the crypto field. You can trade Golem for any cryptocurrency on an exchange, so if you can buy that cryptocurrency with fiat currency, you can use others.
- Once you have opened an account you will be required to determine a payment method you wish to use; bank transfer or credit / debit card. Coinbase does require verification before you can deposit into your account, this can take a little bit of time due to the popularity of Coinbase!
- Once you're verified, you can fund your account! Unfortunately, the only fiat currencies it offers is USD, EUR or GBP. If the currency from your country is different, you must change to one of these to use Coinbase. Once funded, click Buy/Sell to buy some Bitcoin.
- Now you are the proud owner of some Bitcoin, next you must find an exchange to trade it for Golem. I like the site coinswitch because it gives you a choice of exchange prices.
- Now back on coinswitch.co, continue to the next page where you will find the different price options.
- Input the amount of Bitcoin you want to exchange into Golem, Coinswitch will then work out how much Golem you are due based on the exchange rate at that time.
- When you opened your Golem wallet you were given an address, you must put that into the section asked for here and then click continue.
- The final step is to go back to Coinbase and send your Bitcoins to the person who you are selling them to. You will have received an address to send them.
How to buy Golem with a credit card
As Golem is still a project in motion, you cannot buy Golem tokens directly using a credit card. You must follow a similar process as described above and buy a more established cryptocurrency and the trade that for Golem.
This process is not uncommon in the crypto world but until we see more exchanges offering the opportunity to buy cryptocurrencies directly, this will likely continue.
If you do find any exchanges offering the chance to buy directly, make sure to do your research and begin with small amounts if you see it as a trustworthy site.
How to trade Golem
If you are looking to actively trade Golem, it is available on various exchanges. However if you do intend to trade it, you must be aware that you will be buying and selling the actual asset rather than trading it as a derivative.
It is now possible to trade cryptocurrencies as derivatives. Lots of brokers are now offering some of the larger cryptocurrencies as CFDs, which allows you to trade cryptocurrencies on leverage. Leverage is an exciting tool for traders because it means they do not need to put the full amount of their position down. The rest of the position is taken by the broker, allowing traders to leverage up their positions for greater returns (but also greater losses).
To actually trade Golem you must go to exchanges like Bittrex and Poloniex but if you are looking to trade other cryptocurrencies on leverage, you can go to any broker that offers it.
A popular broker where you can trade cryptocurrencies is AVA Trade. Creating an account is very simple, follow the steps highlighted below.
- Go to AVATrades website and fill in this form or sign up using Facebook or Google+.
- You will be required to fill out a questionnaire, this is so AVA Trade can gauge your knowledge level and help if they see fit.
- Next you need to choose an account. AVA Trade give an excellent explanation of each account. Once you have decided i would then recommend using MT4 because it is the most popular trading platform in the world.
- Now you must fund your account, similar to Coinbase you can either deposit via credit / debit card or bank transfer. You can then either trade using their web browser platform or you can download MT4. Personally I am a big fan of the MT4 platform.
The future of Golem trading
Golems idea of renting out idle computer power is certainly a great one and should the developers succeed then this technology will increase productivity and efficiency around the world.
The project is expected to take nearly 4 years from its ICO, which was in November 2016. That gives it three and a quarter years to make significant progress.
There are more notable difficulties lying ahead than that of other cryptocurrencies.
Computers will be connected throughout the world and the ability to deliver the transfer of information and power is bound to take time.
This means there will undoubtably be a time delay. In an ideal world, it could almost be used as an on / off switch. In reality, for this to happen, technology will need to evolve quickly, but I would hazard a guess that the progress of Golem will be quicker than that of improving connectivity speeds significantly.
Now, we mentioned supply and demand earlier. This is a problem if one out weighs the other. However, there is an issue before we get to that. Actually getting the technology adopted by the masses. If people are not using it, then the product is not there. Following that comes the supply and demand issue, this strikes me as a 'cross that bridge when we get to it' kind of issue. I would imagine a solution is available to this.
The final hurdle is legal issues. Since data is being sent across borders, there is the matter of data protection and cyber security. Without either, users willingness to participate in the network will diminish.
But it is cheap
Despite the negativity in bringing up the potential hurdles Golem may encounter, if it can pass those tests, the upside is huge. Considering the price, it is trading at the moment, the risks aren't huge as you can buy only a small amount.
Enjoyed this Golem guide? Then see our other cryptocurrency guides:
- How to buy and trade Bitcoin
- How to buy and trade Dash
- How to buy and trade Dogecoin
- How to buy and trade Ethereum
- How to buy and trade Golem
- How to buy and trade Litecoin
- How to buy and trade Monero
- How to buy and trade NEM
- How to buy and trade NEO
- How to buy and trade Peercoin
- How to buy and trade Potcoin
- How to buy and trade Ripple
- How to buy and trade Stratis
- How to buy and trade Tezos
- How to buy and trade Waves
- How to buy and trade Zcash