So you’ve decided to get into cryptocurrency, but there’s a big question on your mind—do I need cryptocurrency? The truth is probably no matter what the reason for getting started is the answer is almost more important than just how much or by what amount. Here’s what you should know about the cryptocurrency market and where it might take a little extra effort before you decide to buy in.
What makes cryptocurrency different from traditional currencies and cash?
In a lot of ways, cryptocurrencies are different in the way that they operate and have become part of people’s day-to-day lives since their inception nearly two decades ago. They can be stored anywhere, accessed 24/7, and used on any device or platform. It’s an easy system, making them great for small investors looking to diversify their portfolio. There are also cryptocurrency exchanges, so if you want an alternative, you’ll want to check out some of those as well.
What does Bitcoin mean? Is it like gold or money? How do you invest in this currency?
Bitcoin is a digital form of cash—essentially virtual cash. Unlike traditional currencies such as dollars and euros, bitcoin uses cryptography and distributed ledger technology, which means you never have to keep a bank account or bank card as long as you have access to a computer. Instead of paying with paper cash, people pay with bitcoins instead. This makes cryptocurrencies a bit easier to use, but not necessarily safe.
One of the biggest misconceptions among newbies is how stable bitcoin is. While many consider bitcoin a long-term investment, there are actually plenty of risks to this type of investment. A major concern from experts is blockchain mining, as it involves a huge chunk of new coins being minted. Since blockchain is very complicated and new, it’s hard to determine if you will get paid back when you sell. And the fact that it doesn’t rely on a centralized third party makes this a risky game for investors who can’t afford the hassle involved with storing the money in a bank.
Cryptography is how all the transactions work and is how we make sure everything remains secure. If you don’t understand what’s happening behind the scenes, then you don’t understand how to own these currencies. Not only that, but Bitcoin has the most advanced cryptography in the world, thus making it harder to hack this currency than, say, crypto-based currencies like Ethereum or Litecoin.
There’s been a ton of hype about the newest cryptocurrency, but what really matters is knowing how to manage it. That’s why experts recommend using Coinbase, Gemini, Binance exchange, Kraken, Gemini Trust Wallet, and others to start buying and selling bitcoins. Also look for websites like Bitcoin.com and other sites offering free advice and resources. Keep reading and keep going. It’s worth it.
Crypto investing is a risk worth taking, especially when you’re young and inexperienced. With the right guidance from experienced advisors, you could turn this currency into something even greater.
Check out our guide on beginners’ cryptocurrency investing to help give you a little insight on what you need to know. Want to learn more about it? Check out our blog and our YouTube channel!
What cryptocurrency trading is like to start as an investor?
Once bitcoin becomes mainstream, it will be difficult for anyone to stop doing business with it—at least until the entire financial industry collapses due to the collapse of Lehman Brothers. After all, one year is a hell of a long time to wait for a company to go underwater. However, a whole bunch of companies started selling bitcoin and its associated tokens around the first half of 2013. By 2017, the majority of the leading U.S. banks had made at least 10 percent of their deposits. Now, every large corporation is looking to get in on the action and will continue to do so to keep their customers happy and in-line with the latest tech trends.
The thing is, while bitcoin is still a hot topic of discussion, no one knows whether cryptocurrency can live up to the hype as quickly as it has over the last few days. Some things are already beginning to happen, including the recent launch of Bitcoin ATMs, a new mobile app called Mycrypto, an updated website, and thousands of new pages on Google and Facebook. To think that this is a relatively simple digital currency seems absurd to the average person. But, remember, this currency is just a start. As the saying goes, “Be prepared for the future.”
Since the Bitcoin Association is a nonprofit organization, there’s no guarantee that they will succeed. This means that you should always be cautious with cryptocurrency investments. For example, if someone wants to buy a single bitcoin to send back to his girlfriend—you need to know exactly how it works and what the chances are. Otherwise, you can bet on a fractional percentage—say 50 percent. If you’re interested in starting your own digital currency firm, it will be wise to keep an eye on Bitcoin’s price, but don’t expect it to reach the same heights as Bitcoin.
How Do We Get Control Of Our Money From All Our Banking Accounts?
Many times, when it comes to cryptocurrencies, the key to control is just finding a wallet online that offers it. When buying bitcoins, go to places like Coincheck, Bitfinex, Gemini, Blockfi, Kraken, etc., and find legitimate options. The choice will make a big difference both as to where you choose to hold your money and how much of that your wallet is worth. Once you decide to buy bitcoins, you still need a good understanding of how bitcoin functions, and it’s best to learn this before purchasing anything that you like. Make sure to check out CoinGecko if you’re looking to trade bitcoin quickly.
What kind of insurance coverage is offered in crypto wallets?
If you’re looking to take cryptocurrency as far as possible, one must always have coverage. One type of insurance is debit/credit insurance, which includes protection against credit card theft. Another type is security insurance, which covers potential losses. Both types offer enough protection for one to feel confident, but there are other factors that can impact how bad things can get than just having a solid backup plan in place. Be sure to get the cover that you need.
How much of my BTC can I lose while holding it?
As of now, the maximum loss point in cryptocurrency is 1,000 BTC—unless otherwise stated.
Why would I care if I’m losing a decent bit? Well, it might be tough to recover with such high volatility, but it isn’t a problem if you’re able to handle the loss. An issue with a $1 BTC loss might be difficulty understanding what happened and feeling depressed. Someone who bought 20 bitcoin and lost a bunch of it would be extremely upset, and that’s why it’s not a smart idea to try to hold too much BTC. Don’t let yourself get into such a position. At the end of the day, this business is just meant to make trades through the internet. If you want it all, that’s okay. But, it’s better to be conservative.