Nowadays, cryptocurrencies have become a global phenomenon known to most people. Interest in cryptocurrencies has been on the rise throughout 2019 and Bitcoin’s impressive 300{70b45ee78418f42abd3d9f3844ba2e48a8b0129d2b75d7c15f341553206e1abb}, rally from $3,130 in February 2019 to $13,800 on June 26 the same year.
What is Cryptocurrency?
It is an internet-based medium of exchange which uses cryptographic functions to conduct financial transactions. Cryptocurrencies leverage blockchain technology to gain decentralization, transparency, and immutability.
The most crucial feature of a cryptocurrency is that it is not controlled by any central authority: the decentralized nature of the blockchain makes cryptocurrencies theoretically immune to the old ways of government control and interference.
Cryptocurrency can be used to conduct transactions only in the digital world. Therefore, in order to buy or sell using cryptocurrency, it has to be converted from a digital form to some existing currency which is used in the real world. Eg: Dollars, Rupees etc.
Cryptocurrencies are rated as potentially extremely large value. In the future of cryptocurrency, it can become the cheapest, fastest, safest and most popular medium of exchange around the world.
Thousands of types of these currencies can be found in the market presently. Each one promotes its own set of advantages, for example: Ethereum is used in running applications and smart contracts, Ripple (XRP) with great level of liquidity and low fee. Among all of which, Bitcoin is one of the oldest.
It is widely believed that cryptocurrencies are the hottest investment opportunity currently available. Indeed, there are many stories of people becoming millionaires through their Bitcoin investments
4 Thing Investor need to remember
Despite the growing demand, many people are still deterred by the crypto market. Investing in the top-rank cryptocurrencies is an extremely complex process, which requires technical understanding of blockchain technology, and knowledge in risk management and security.
- If you are planning to invest in cryptocurrencies, make sure to spend at-least 24 hours of effective reading time to get an understanding of blockchain, cryptocurrencies, and security measures you should take before investing in cryptocurrencies and the likes. Keep in mind that no research is enough and you need to update constantly. What could have been true a couple of months ago might be completely wrong now. Technology, Finance, Investment strategies, Regulation and every other thing about cryptos is changing at such a fast pace that you need to keep up with its pace on a daily basis.
- You should start slowly with a small sumt that you consider meagre. You start by creating accounts, then buy bitcoin, buy altcoins, perform some transactions, participate in a good ICO and so on. You can do all these with a small amount and once you are comfortable, you can invest with the in a larger scale.
- Most of the time you come across fake news, manipulated images, tweets from fake accounts and the likes. There are interested parties who aim to spread fear, uncertainty and disinformation to devalue some coins. Learn to distinguish between the fake news from the real.
- Unlike stock exchanges, you have to create accounts in multiple websites where you can buy Bitcoin and a multitude of other exchanges where you can trade your bitcoins or ethereum with a multitude of coins. Without a proper tooI, it is hard to keep track of these assets distributed across different exchanges. You should consider a few portfolio trackers, such as Cointracking. This is a tool for tracking all investments. It lets you auto-import your trades from multitude of exchanges and have some decent reports which lets you track your investments.
Investing in cryptocurrencies doesn’t have to be difficult or risky. Investors simply need to have a plan before taking action and every responsible trader always does their own research before making an investment in any asset.
