Bitcoin Reaches New Highs in 2017.
Other cryptocurrencies, referred to as altcoin, have garnered more interest in 2017 too. If you want to start investing in a cryptocurrency, you have hundreds of options. However, not every altcoin is a good investment. You must have a basic understanding of cryptocurrency to make a wise decision on which to invest in. Also, remember that all investments come with some risk. No one can guarantee with 100% certainty success in the world of investing. With this important information out of the way, we can continue with explaining what cryptocurrency is, why you should invest in cryptocurrency, and how to get started.
What is Crypto Currency
One of the defining characteristics of cryptocurrency is it is not regulated by a centralized financial authority, bank, or government. The Internet handles transfer confirmations and value guarantee. People who participate in the mining of the currency are simultaneously helping the system verify the currency. Each transaction is recorded on a “public record” called the blockchain. This deters some people from acquiring cryptocurrency.
However, many cryptocurrencies make transactions anonymous, so no one will be able to see your name. Privacy is built into the nature of cryptocurrency as it uses cryptography to create an uncrackable code from legible information for tracking transactions.
What Exactly does Mining Coins Mean?
Mining refers to the process of acquiring a cryptocurrency. Your computer must solve a computational puzzle before any other computer to be rewarded with a crypto coin. The name of the coin depends on which cryptocurrency you’re mining for. Each coin that’s successfully mined appears on the blockchain for transparency.
Not just any computer can be used to mine cryptocurrency. The computer needs an ASIC chip designed for cryptocurrency to efficiently mine. You can buy an ASIC chip for a few hundred dollars, but some are a bit more expensive. Whenever you buy or receive cryptocurrency, you are given a digital key for accessing or validating the transaction. To keep this key safe, you must store the coins in a wallet.
Why Invest in Crypto Currency
Crypto Currency Can’t Be Frozen – You’ve probably heard the horror stories of people having their bank accounts frozen, even when they didn’t do anything wrong. When you have bills that need to be paid, it’s stressful to not have access to your hard earned money. With cryptocurrency, because it’s not centralized or regulated by an authority, it can’t be frozen. You always have access to your crypto coins whenever you need it.
No Limits – Many banks and financial institutions impose transaction limits. For example, you may only be allowed to deposit $2,000 in your savings account each month. Or you must maintain a certain balance to avoid account fees. You’re even limited by how much money you can withdraw from an ATM. Cryptocurrency doesn’t place limits on your transactions.
Low to No Transaction Fees – Many cryptocurrencies don’t charge transaction fees, allowing you to save money on purchases. Banks and other financial institutions, including PayPal, sometimes charge transaction fees. With cryptocurrency, you can send money internationally without a hefty transaction fee.
Better Identity Protection – Cryptocurrencies can keep your identity hidden during a transaction. The only information that the other party would see is the total amount changing hands. When you pay with a debit or credit card, sensitive information is transferred that can be misused or stolen.
Payments Can’t Be Reversed – A benefit for sellers, cryptocurrency payments can’t be reversed or stopped. Once you’ve paid someone in cryptocurrency, it’s a done deal. Thus, it protects sellers from fraud.
How to Get Started
Mine, Buy, or Both
To get started investing in cryptocurrency, you should first decide whether or not you will mine coin, buy it, or a combination. If you want to mine coin, you need to buy suitable hardware for that particular type of coin. Those who plan on just buying and trading cryptocurrency can skip to creating an account with a cryptocurrency exchange.
Find a Cryptocurrency Exchange
Choosing the right cryptocurrency exchange plays a role in being successful with cryptocurrency. New investors to cryptocurrency should look for an exchange that allows them to deposit money. A good cryptocurrency exchange has a variety of coins to choose from as well. Expert investors advise to diversify your investments, and the same applies to the crypto market. You shouldn’t put all your money on one coin.
Another factor you must look for in an exchange is high liquidity. If there aren’t a lot of buyers and sellers, transaction times take longer. Naturally, security is another primary concern when searching for a good cryptocurrency exchange. Coins should be kept in cold storage where they can’t be accessed by hackers. Other signs of good security are the availability of 2-factor authentication and email encryption and verification.
Some of the most highly reputable exchanges on the market are Coinbase and Binance. There are several exchanges on the market be careful and do your homework on exchanges before you sign up with an exchange. To learn more about how to buy cryptocurrency download my free Guide to Cryptocurrency Ebook or visit my How to buy Bitcoin section.
Once you have a cryptocurrency exchange and you know what types of coins you’ll invest in, you must open a digital wallet for safely storing your cryptocurrency. Bitcoin, for example, has the bitcoin wallet that miners can use for storing BTC (bitcoin). Types of cryptocurrency wallets you can use are mobile, desktop, online, hardware, and paper. The ledger Nano is one of the most popular and reputable hard wallets on the market, I highly suggest you order one if you are planning on investing in cryptocurrency.
Most importantly, you should continue learning about cryptocurrency and how to successfully invest in it. This guide is only a brief explanation of what it is and how to get started. You must delve deeper and spend time learning about the cryptocurrencies you plan on investing in.
To Learn more or if you want help getting started please reach out to me, I am here to help you.
Invest in the Top Coins
To benefit most from investing in cryptocurrency, you should look at the top cryptocurrencies. Messing with those that aren’t popular or successful enough will likely cause you to lose money instead of gain money. Below are descriptions of a few of the top Alt coins to invest in, to learn more about the top coins visit Coinmarketcap, this website list all the altcoins on the market and gives your analytics and also links to there websites and what exchanges you can purchase the coins.
BTC – Bitcoin is currently the most valuable cryptocurrency as well as the most well-known. Thus, you’ll have an easier time finding stores that accept it and people who are willing to trade it with you. For instance, BTC can be spent at Amazon and Victoria’s Secret. Almost all successful cryptocurrency investors have bitcoin. You can also order debit cards to spend your Bitcoin for day to day purchases.
ETH – Ethereum has reached a $29 billion market capitalization, making it the second largest cryptocurrency in terms of market capitalization. BTC is in first place with a market cap of $102 billion. Transaction fees of ETH are $0.15 on average with the potential to decrease with time. ETH’s transaction fee has already decreased. Different from BTC, Ethereum doesn’t have a blockchain size limit.
LTC – Litecoin is a cryptocurrency that completes transactions immediately without a wait time. It can be profitably mined with consumer-grade hardware. LTC’s market capitalization is around $3 million. The cryptocurrency has a volume of $131 million and a maximum supply of 84 million LTC.
XRP – Ripple keeps transactions free and secure. Several banks and payment networks have started using XRP, viewing it as one of the most secure cryptocurrencies. Examples of companies that use XRP are UniCredit, Santander, and UBS. Ripple has a market cap of nearly $8 million, a volume of $40,000,000, and a max supply of 100,000,000,000 XRP.
Cryptocurrency is gradually becoming more popular and accepted around the globe. Big businesses, small businesses, and even governments have started to accept this form of payment. Although it might seem like it’s too late to get in on the profit, there’s still a lot of opportunity for growing your wealth through cryptocurrency investing. As long as you dedicate yourself to learning about cryptocurrency and invest in a variety of the top cryptocurrencies, you can succeed.