Cryptocurrency: Beginner’s Guide to Digital Money
Over the last decade, cryptocurrency has become a brand-new internet-related phenomenon. This innovative way of approaching money assets is fueling niche economies, innovation, and web communities. This is something that is on the front burner especially where old social media are starting to falter. Cryptocurrency is also becoming an awesome investment opportunity unseen before in its innovative approach. As well as the potential to democratize investing.
Imagine being able to become a stock owner immediately. You can do it in a much shorter period of time instead of waiting for months to receive the formal ownership of shares. Today, thanks to applied cryptography and secure sending, this becomes possible.
Experts say that, eventually, crypto will be even more common in the future. So, knowing about blockchain, digital wallets, etc., can put you a little ahead of the game. Give this blog post a quick read and make notes if you want to start learning about cryptocurrency. In this article, we’ll touch upon such subjects as different cryptos and digital assets.
What Is Cryptocurrency?
Knowing about cryptocurrency is important, at least superficially, because the future will have crypto, at least to an extent. Cryptocurrencies can be best utilized for quick gains as the crypto market is highly volatile. Gains from cryptocurrencies can be availed via two methods:
For trading, one needs basic knowledge of how the market works and how to read charts and do all the analysis. But for mining, one will need a proper setup, a speed internet connection, and good power along with good power backup. Each mined blockchain will generate income.
In actuality, cryptocurrency by definition is not really “a currency”. The better name for it is “digital asset”, which is often referred to as “digital currency” utilized for purchasing goods or services. Traditional currency is something that gets issued by the Central Bank and declared legal tender by governments. But since the government can’t issue Bitcoin or Ethereum, therefore, it can’t be called a currency that way.
Basically, cryptocurrency is virtual money (created as an alternative to traditional currency) designed to work as a medium of currency exchange. The better term would be “crypto-assets”. The best cryptocurrencies to start with are Bitcoin, Ethereum, Ripple, Litecoin.
Cryptocurrency is a peer-to-peer electronic system, which is used to purchase goods or services through the Internet. The sole utility of bitcoin was to enable money transfers across the globe without the involvement of any government/banks. That definition has changed a bit now when people are investing in bitcoins to make money out of their investment.
Why Deal With Cryptocurrencies?
Before the cryptocurrency, bank charges and charges on wire transfers in developing countries were way high and mostly very annoying. Especially wire transfers were at the mercy of agents informing you there is no foreign currency. Therefore, you either had to delay your payment or not get your payment on time.
Today, cryptocurrency comes with many advantages. One of the main advantages is in allowing easy and cheap cross-border transactions. Here are more advantages of cryptocurrencies:
- Stands on the legal ground, which opens up more possibilities for transactions.
- Lower costs in comparison to some of the popular payment methods offered digitally.
- Will make you decent money by mining coins (through cryptocurrency transactions called “mining”).
- Opens the door for many start-ups and for all those who weren’t able to afford selling shares or Initial Public Offers (IPOs) or listing on stock exchanges removing the regional limitations and giving a green light to becoming a global brand with supporters from all over the world.
- Since cryptocurrency is a decentralized currency, this makes it possible to trade anywhere in the world and can’t be deflated or inflated by the central government.
- Controls money with quick and hard-to-fake transactions which prevent financial frauds that banks deal with on daily basis.
Of course, anonymity is another appealing advantage supplied by cryptocurrency because you don’t have to show your ID while making transactions. This is something that won’t be stricken by government moves like demonetization, inflation adjustment, etc.
The first cryptocurrency was called “bitcoin” and it was first brought to the world for peer-to-peer electronic transfer tasks. Today, there are over 1000 cryptocurrencies all around the world but only a few of them are more important, about which we will learn later.
What A Beginner Should Keep In Mind Before Getting Started
If you are a beginner, consider focusing on cryptocurrency that has a low-risk level. Pick something that will go well with your particular trading style. Any beginner does not know much about cryptocurrencies. And this is perfectly normal. But this is the reason why it’s important not to trade cryptocurrencies that are generally high-risk. Unless you are running a complex trading setup. Since most beginners prefer to trade the easiest way (which is speculative trading), in that case, you need a volatile cryptocurrency.
One that is driven by high trading volumes is bitcoin. But you’d need to read into the market to determine where it’s overbought or oversold. The wrong entry point means – you expose yourself to an even greater risk of loss. This is why trading cryptocurrencies that have the potential for growth in the future is a smart move.
So how do you determine which ones have growth potential? Finding the right information about that is much easier than you think. Read about the ongoing projects and keep updated on the news regarding those projects. Positive announcements tend to encourage bullish performance while negative announcements cause bearish performance. Keep this in mind.
Crypto trading or investing is more than just buying a couple of cryptocurrencies and holding them until the boom. Learn about all the available investment strategies on the internet to broaden your perspective and investment stance. Think about how you can use the newly learned investment strategies to minimize risk and loss and boost your profits.
What Is Bitcoin?
Now, let’s talk about the most popular kinds of crypto’s that exist on the market today. Of course, the first thing to talk about is bitcoins. The perception of Bitcoin has changed quite drastically from being “internet money for nerds and criminals” to getting recognized as a serious asset. This is something that even a big playing investment manager desire to have in his portfolio. Bitcoin is limited to 21M coins. Up to today, 18M are mined, but 3 million are already lost and another 1M secured in a wallet of the famous inventor of Bitcoin, Satoshi Nakamoto.
Bitcoin is the only truly decentralized crypto with the biggest network effect today. And this is exactly what makes cryptocurrencies interesting. Bitcoin has by far the most secure blockchain and the best developers working on the project.
Main reasons why to learn about bitcoins:
- Has been around the longest
- Stable and well respected
- Controls the crypto market
- You can buy any other crypto with it
- Accepted by thousands of vendors
The whole mission of Bitcoin was to stop bank scams, as well as to become a response to QE money printing that eats away labor earnings. On the genesis block, the mission of bitcoin was an effort by Satoshi Nakamoto to stop the scams that the money changers feed the public.
Advantages of bitcoin crypto:
Client autonomy. The essential draw of bitcoin for some clients, and surely one of the focal fundamentals of digital forms of money all the more, for the most part, is independence. Computerized monetary forms permit clients more self-rule over their own cash than fiat monetary forms do, from a certain point of view. Clients can handle how they go through their cash without managing middlemen like a bank or government.
Buys are generally discrete. Only in cases when clients willfully distribute bitcoin exchanges, bitcoin transactions are discrete. It is not necessarily mean that bitcoin exchanges are really unknown or altogether untraceable. The thing is that they are considerably less promptly connected to individuals personally.
Distributed focus. The bitcoin installment framework is absolutely shareable. This implies that clients can send and get installments to or from anybody on the organization around the globe without requiring endorsement from any outside source or authority.
End of banking fees. Bitcoin clients are not dependent upon the reiteration of customary financial charges related to fiat monetary forms. This implies no record upkeep or least equilibrium expenses, no overdraft charges, and no returned store charges, among numerous others.
Since bitcoin exchanges have no middle-person organizations or government contributions, the expenses of executing are kept extremely low. This can be a significant bit of leeway for explorers. While standard wire moves and unfamiliar buys ordinarily include expenses and trade costs.
More Cryptos That Are Worth Investing In
Ripple is becoming one of the most used and developed cryptos we can have on the market. It was essentially created to be decentralized, but it is looking to be very interesting for the banks, so we may actually see one of the first official centralized currencies in the form of Ripple.
Ripple has partnered up with hundreds of banks, financial institutions, and remittance companies. Ripple will be the dominant company in the future that provides fast and near-fee-less international transactions.
Ethereum (ETH) provides several reasons to invest in. For a start, it keeps growing in popularity while you can equally use it to purchase goods and services. Trading Ethereum is also pretty easy because a good number of crypto exchanges offer this popular digital coin on their platforms, indicating that you won’t have difficulty trading the digital currency whenever you wish to.
Binance Coin (BNB) is one of the digital assets (in terms of cryptocurrency trading) that have the potential to offer investors a good Return on Investment (ROI) as seen by its increasing appreciation over the years.
EOS is a business-based open-source blockchain development platform. One of its outstanding qualities is its amazing speed of operation. With the ability to process millions of transactions per second, it offers better transaction speed than Ethereum and Bitcoin.
FunFair (FUN) is a cryptocurrency that powers the gaming ecosystem on FunFair. Pretty much all the activities on the platform are made using this cryptocurrency. Hence, the cryptocurrency is also likely going to see many prices push if the current activities and gamers on ecosystems increases.
Before you think about investing in cryptocurrencies, learn all you can about the crypto space. The world of crypto has aged well, and down the years, it has taught many lessons. Today you can learn from the crypto timeline or find a mentor to grasp the ins and outs of the crypto world. Without learning about the crypto market and what has happened in the past, you won’t be able to predict the future or, better translated, as you won’t benefit from your investment.
If you are new to trading and have enough budget, try various trading support services, e.g. trading courses, daily market updates, coin performance reports. Or anything that may help you learning and/or indicating profitable trade opportunities. After gathering the basic information on how to set everything up, don’t just jump straight into trading by setting trades irresponsibly. Make sure you have a strategy. Not only a strategy on where to invest but also plan how you’re going to invest.
The easiest way to experience crypto is probably to take online courses created by experienced traders. Once you have enough knowledge about how the crypto world works, start investing by buying crypto from exchanges like LocalBitcoins, etc. But keep your investments small and limited. After investing in short-stake deals and gaining experience, widen your investment approach by investing in various cryptocurrencies.