Cryptocurrency was introduced in 2009, since then the digital realm has seen frantic rise in the investing and trading of the digital currency. But what exactly is cryptocurrency? Cryptocurrency is the concoction of currency and cryptographing. It’s an online form of currency which has been encoded by cryptographs in order to create a secure environment for the possession and trading of cryptocurrencies. The coding creates a ‘blockchain’ for the currency in order to keep it safe and secure. It can be exchanged online for a variety of goods and services ranging from e-commerce to even pizza delivery. The older the internet gets, the amount of people investing in cryptocurrency is growing at a fast pace rate. You may be familiar with the term ‘Bitcoin’, which was the world’s first form of online currency, to this day there are over 20 types of cryptocurrency to select from.
Here are five simple steps to help you begin investing in cryptocurrency.
Step one; Research.
The first step towards investing in cryptocurrency is research. Due to the volatile nature, the online currency holds, keeping up to date on relevant news and exchange rates is necessary in order to make cryptocurrency a successful investment. Researching the components of cryptocurrency allows you to better understand and optimise specific websites and wallets available.
Step two; Set up a digital wallet.
In order to store your cryptocurrency, you will need a digital wallet. A digital wallet is a form of online storage which protects your private key and public address in order to send and receive your cryptocurrencies. Digital wallets come in two forms, software and hardware.
Software digital wallets usually come in the form of an application for your desktop or laptop which you can download. The most popular software wallets are Trezor, Exodus and Copay. Software wallets are extremely convenient due to the accessibility that they provide towards not only the exchange platforms, but also your bank accounts. Although easily accessible, it does leave you vulnerable to internet hackers.
Hardware wallets are completely separate to the internet, keeping them safe and secure from hackers. They come in a form very similar to USB flash drives. The most popular hardware wallets as of now are Ledger and Trezor. Due to the physical nature of hardware wallets, many people find them a safer option as opposed to software wallets. Although they’re safe, they are impractical for day to day usage and not typically beginner friendly.
Step three; decide on an exchange platform and register
Once you’ve set up a wallet and you’re ready to begin your journey into the world of cryptocurrency, the next step is to decide on which exchange platform to use. The platform acts as an online marketplace which allows the members to buy and sell their cryptocurrency with other members on the exchange without government intervention.
Due to the volatile nature of cryptocurrency, it’s important to select an exchange platform which is trusted by its clients and has a good reputation. Website such as btc loophole provide an insight on which platform sites are efficient and trusting. On these platforms, you’re able to purchase, sell, trade
and invest in cryptocurrencies. To setup an account on a currency exchange platform you’ll need to provide details such as; name, email address, password and sometimes bank account information.
Step four; Purchase your coins.
Now that you’ve acquired a wallet and a membership to the exchange platform, you’re ready to start purchasing cryptocurrency. Almost every single exchange platform has a ‘buy’ area allocated to the purchase of cryptocurrencies. Some of the available currencies allow the purchase of a segment of the coins, such as Bitcoin. Bitcoin is the most traditional and popular form of cryptocurrency. The coins can be divided to as much as eight decimal points. On the platform of your choice, there should be a section which is labelled “Buy and Sell”. Here you’ll find a selection of cryptocurrencies such as Bitcoin, Ethereum and Litecoin. It’s important to identify three factors before purchasing your first online cryptocurrency.
Buying currency online can put you in an extremely vulnerable position if you choose the wrong website. It’s important to read reviews and research exchange platforms in order to avoid being hacked or tricked into thinking a fake website is reliable.
Some exchange platforms take a number of days to verify your account, which could cause a halt in your path towards cryptocurrency if you’re in a rush. Although annoying, exchange platforms do this to ensure their clients are safe during transactions.
Due to the nature of cryptocurrency, paying transaction fees are unavoidable. Looking at the websites for potential exchange platforms is a great start to understand and acknowledge the transaction fees. These fees can range from 0.1% of the overall purchase to 0.68%.
Step Five; Trading your cryptocurrency.
Once you’ve purchased your cryptocurrency and you’re satisfied, you are able to trade them. The cryptocurrency market tends to fluctuate quite regularly so it’s important to study the market trends and understand when it’s a good time to trade or sell them. Very similar to buying the currency online, the exchange platforms website should have a sell tab where you are able to sell the relevant cryptocurrency type.
As society progresses towards a more digital approach to investing and purchasing, cryptocurrency is forever expanding and being utilised, whether it be for e-commerce, trading or investing. These five simple steps provide the necessary information required to help aid you in beginning your journey towards investing in the digital phenomena known as cryptocurrency.