Cryptocurrencies – a buzzword ever since the rise of Bitcoin in 2008. But what has started as a buzzword, now is on the verge of going mainstream.
And everyone, including your grandma, is talking about it. For some people, it’s a get-rich-quick scheme. For others, it’s Money 3.0. In any case, you should be familiar with the concept, and get involved in this lucrative space.
This blog post will help you to get started with Bitcoin, Ethereum, Ripple and other crypto coins.
So, let’s start with the basics to invest in cryptocurrency.
What is cryptocurrency?
Cryptocurrency is a type of digital asset built on top of the technology known as the blockchain.
But what exactly is blockchain? In short, blockchain is a distributed ledger spread across the network of peers, and without a central authority.
All data on the blockchain are cryptographically secured which makes ledger tamper-proof. And this is the technology underlying cryptocurrencies.
What does that mean? It means that as opposed to banks, cryptocurrencies are decentralized, secure, and can be tracked.
The first decentralized cryptocurrency was bitcoin, and ever since, over 6,000 altcoins (other cryptocurrencies) has been created and released.
Now that you have some basic knowledge about cryptocurrencies, let’s see how you can get involved.
How to invest in cryptocurrency?
If you have finally decided to invest in some appealing coins, you should know that the start is pretty simple.
The first thing you should do, is deciding what coins do you want to invest in. To get a clearer picture of this, I recommend you to visit CoinMarketCap. It’s a website that lists down cryptocurrencies in decreasing order of market cap.
Once you found some interesting coins, it’s time to research your potential investment. Read their white papers and see what are they up to. Also, don’t forget to check out the team, and go through related threads on Bitcoin Talk.
Now, it’s time for shopping. Let’s say that you want to buy bitcoin. First, you have to find a crypto exchange where you want to do your shopping. My recommendation is two huge crypto exchanges: Coinbase and Binance.
Both exchanges have a pretty straightforward buying process.
For example, to buy bitcoin on Coinbase you’ll have to:
- Create an account
- Verify your identity
- Buy bitcoin with your debit card or via your bank account (you can start with as little as $25).
And that’s it. Within minutes, you’ll own BTC.
How to store your cryptocurrency?
Once you invest in cryptocurrency, you’ll need a secure place to hold them (you don’t want to keep them on exchange). For this purpose, you can choose between hot or cold crypto wallets.
Hot vs cold wallets
A hot wallet means that you’re keeping your coins in a device that is connected to the internet. With hot wallets, you have fast transactions and a user-friendly interface.
However, these types of wallets are more susceptible to malicious attacks. Some of the popular hot wallets include Exodus, DropBit, and Electrum.
On the other side, we have cold wallets. These types of wallets are offline and way more secure compared with hot wallets. Cold storage is perfect if you want to hold a large number of coins for a long period of time.
But, not all is perfect. Disadvantages of cold wallets include:
- They are susceptible to physical damage.
- The transactions are slower.
- And finally, setting up a cold wallet can be complicated.
Final shark tips for investing responsibly
Investing in cryptocurrencies can be a lucrative way to diversify your income, but at the same time, it can be risky. To be more precise, the industry is flooded with scams and Ponzi schemes. And I can’t highlight enough how important is doing your own research.
Also, risk as much money as you can afford, at least at the beginning.
Another thing. Bitcoin and Ethereum aren’t the only cryptocurrencies out there. Some amazing projects are conquering the industry so don’t forget to stay up to date. Additionally, there are many other ways to start investing. You can learn about smart investing here.
And finally, have fun investing in cryptocurrencies.
Which coin did you invest in? Let me know in the comments below.
Or if you want to bounce an idea on crypto off me feel free to reach out. We can discuss blockchain technology, altcoins, ICO’s, STO’s or IEO’s.