Are you interested in investing in Cryptocurrency? Before you begin, it’s crucial to know exactly what it is, why you would invest in it, and how much you can earn. If this sounds like you, this guide will help you learn a few things about how to invest in cryptocurrency. So now, let’s get started!
What are cryptocurrencies?
Cryptocurrencies are basically digital currencies. They use cryptography to protect transactions and control the creation of new units. The most popular cryptocurrencies include Bitcoin, Ethereum, and Litecoin.
Buy and Hold (HODL)
This is the oldest way to invest in Cryptocurrency. First, you buy a certain amount of coins or tokens at a given price; then, you hold them until they reach a certain value. The longer you hold your coins, the more valuable they become.
Trading
Trading is similar to buying and holding, except that instead of waiting for your coins to increase in value, you sell them when the price reaches an all-time high. This can be lucrative if you have good timing. However, selling too early or too late can also lead to losses.
Buy ICO tokens (initial coin offerings).
ICOs are like IPOs (Initial Public Offerings). Still, instead of stocks, they offer coins or tokens — digital assets that can be used to access certain services on their platform or to pay for transactions made within their network (e.g., Ethereum). In 2017 alone, ICO projects raised more than $4 billion from investors worldwide!
Mining
Mining is the process of transactions (generating new coins and adding blocks to the blockchain). It’s a complicated process and requires a lot of computational power.
In cryptocurrency mining, you use your computer hardware to solve cryptographic puzzles that validate transactions on the blockchain. The first one who solves it gets rewarded with a certain amount of Cryptocurrency. The reward can be as small as 10 cents or as large as several million dollars!
Crypto Wallets
It is a software program that stores your public and private keys and interacts with various blockchains. It enables users to send and receive digital currency and monitor their balance. The most popular cryptocurrency wallets are web-based applications or mobile apps.
Buy Cryptocurrency on Exchange Platforms
Exchange platforms offer a variety of cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), XRP, Litecoin (LTC) and more. Once you have signed up for an exchange platform, you can deposit money into your account using your bank card or other payment methods like PayPal or credit card. Then, if you have deposited enough money into your account, you can buy some cryptocurrency from them at market rate prices determined by the supply and demand for each coin on the platform.
How to Protect Yourself from Cryptocurrency Scams
Ensure that you buy your coins from legitimate exchanges or brokers only. Avoid buying them from websites or individuals who claim to be selling them at a discount or who ask you to send money via PayPal, MoneyGram or Western Union etc. These are all signs that should raise red flags in your mind!
Suppose someone offers you an investment opportunity in which they promise huge returns on your investment but asks you to send money first before receiving any coins back. In that case, this is another sign of possible fraud!
As the trend of cryptocurrencies continues to grow, so does the number of people investing in them. However, many people are wondering how to invest in Cryptocurrency. If you have been thinking about investing some money into crypto but aren’t sure where to start, this guide will help you make the most of your investment.
