Over the years, cryptocurrency has been in the headlines of popular online magazines such as Forbes, Times, Yahoo Finance etc. It is indeed becoming a popular trend and has finally entered the mainstream as one of blossoming financial investments. Despite the volatility and negative feedback from critics and sceptics, it remained resilient with prices that are continuously increasing. Nothing stops crypto from getting more popular each day, as more and more people are getting hooked on this digital currency.

If you are reading this article, you are probably one of the million people who already have knowledge about what cryptocurrency is. Perhaps, you wanted to know more, or you could be new in the industry. If you are a newbie in the field, here are the things that you must know before making a major decision of investing in cryptocurrency.

What is cryptocurrency?

In essence, cryptocurrency is a digital currency that is intangible, meaning it has no physical form. It is run by blockchain technology – a public ledger that records all data and transactions.

Cryptocurrency is decentralised. Unlike the traditional money that you have in your wallet, it is not distributed by the government. Therefore, this currency has no regulations, nor is it controlled by central banks or any institution. In addition, it is secured by cryptography, making it almost impossible to penetrate. The blockchain not only records transactions but also distributes them across computer networks worldwide, ensuring integrity and transparency. A lot of experts believe that cryptocurrency may cause disruption to the finance world.

Cryptocurrency is often criticised due to environmental issues as well as its involvement in illegal activities. Bitcoin mining requires rigorous energy since most of the computers and machinery being used are power-consuming.

On the other hand, cryptocurrencies are also praised due to their transparency, portability and inflation resistance features.

A cryptocurrency is a form of payment network that renders virtual tokens as a reward. It is acquired through solving complicated algorithms and mathematical problems.

Types of Cryptocurrency

The original cryptocurrency is Bitcoin. It was invented in 2008 by a person or a group of people under the pen name Satoshi Nakamoto.

Bitcoin was first launched in the market in January 2009. The first 50 bitcoins were mined by Nakamoto, and these coins are called the genesis block.

The scarcity or limited supply of Bitcoin is one of the reasons why it became an instant hit. The finite supply contributes to the continuous increase of its value and market capitalisation. In fact, some experts predict that in the next ten years, Bitcoin might even reach the price of over $500,000.

Introduction to Crypto Investing

Rather than a stock or bond, cryptocurrencies are often associated or compared to a commodity whose value is derived from their scarcity of supply. The higher the demand, the greater the value. These features make crypto an attractive yet speculative investment.

When compared to assets, the trading and storing of bitcoins are different in the way that assets require a broker through centralised exchanges. Cryptocurrencies work even without a middleman. Trades are directly recorded on the blockchain itself, and the balance of the users also reflects. The address of each user is also known as a public key which can only be accessed using a private key or a password.

Investing through Trading, Buying and Selling Cryptocurrencies

Cryptocurrencies are readily available and can be traded, bought or sold between two persons or parties. Trading is considered easier when crypto exchanges are used. The Bitcoin Era app can also be a great option for crypto traders and investors alike. The platform provides useful, and unique tools to make trading seamless. In addition, you can also find lists of cryptocurrencies along with their price and market cap on the CoinMarketCap website.

Buying cryptocurrencies is not as complicated as you think. Nearly every exchange from the lists offers trading in major cryptocurrencies like Bitcoin Cash, Ethereum and Litecoin. Exchanges with a good track record are the best options. There are some exchanges that refuse fiat currency which is not ideal for making purchases.

Popular exchanges include Coinbase, Luno and Kraken. Coinbase is not actually an exchange but a broker that accepts fiat currencies and deposits.

When finding an exchange, it is important to check if that particular exchange is available in your region or location. You must also check if funding your account with your chosen currency is possible. Opening an account is easy, and it only takes a few minutes. First, you may need to verify your identity.

Once your account is funded, you may start buying or selling cryptocurrencies. User interfaces of exchanges are mostly user-friendly. Before making a move, it is essential to check the price of cryptocurrencies in the market, as they may vary from one exchange to another.

Ways to store your cryptocurrencies.

Your cryptocurrencies can be secured in either a hard wallet or a soft wallet. They are also known as hot wallets or cold wallets.

Hot wallets are usually online applications readily downloadable and can be accessed online. It uses encryption, and the user can access their assets through their mobile devices or smartphones. In the event of a lost key, you can get it back through their recovery phrase.

On the other hand, a hardware wallet or cold wallet is offline storage and considered to be a lot more secure compared to a soft wallet. They can be in the form of a USB flash drive or a PC storage device. Since it can’t be accessed through the internet, the hardware wallet makes it impossible for hackers to penetrate even if they have access to the private key.

Lastly, you can invest in cryptocurrency in a lot of different ways. Some available alternatives are the following:

• Buying and holding for long-term investment.
• Crypto trading
• Crypto mining
• Via cloud mining pools
• Crypto funds
• and crypto stocks

Note: Before deciding to invest, you must bear in mind that cryptocurrency is highly volatile and always subject to price fluctuations. Do not invest more than you can afford to lose.

Source: Plato Data Intelligence: PlatoData.io