Do you want to double your money? If yes, then come and invest in cryptocurrency. Currently, as we all listen about cryptocurrency investment meanwhile most folks get confused. They do not get how to exactly invest in cryptocurrency. If you are facing the same issue and are still confused, then this post is for you.
What is Cryptocurrency
Firstly, you have a better understanding of cryptocurrency. Let's have a quick look at cryptocurrency if you don't know about it. Well, it is a secure digital currency based on a distributed network and used to perform secure transactions. Distributed network means it uses a ledger to store and verify the transaction and it always works in blocks, each block in a chain needs verification and then approval. After approval, it would be stored over the entire network or ledger. It always uses cryptography encryption algorithms to achieve a high level of security like confidentiality, integrity, non-repudiation, possession, authentication, and authorization.
Through digital currency, you can perform secure transactions anytime anywhere, you don't need to stick with a single centralized authority like the government and banks. The first digital currency Bitcoin came in 2009. Like Bitcoin, there are many other variants of digital currencies like Ethereum, Tether, USD Coins, Binance Coin, Binance USD, XRP, Cardano, Solana, Dogecoin, and Polkadot. That was all about cryptocurrency and its variants now let's move towards cryptocurrency investment.
Investing in cryptocurrency is fair upfront but the biggest challenge is to decide which type of currency you want to invest in and what platform to use. There are a few tips for cryptocurrency investors.
They must have an idea about the:
- Leading cryptocurrency and diversified building investment strategy
- Capital Gain tax
- Short-term investments
Steps You Should Keep in Mind before Investing in Cryptocurrency
Every currency is a bit different from the other, however your primary concern is to make a profit. Steps you should keep in mind before investing in cryptocurrency are:
- Choose the Best Digital Currency Exchange
- Start Purchasing Digital Currency
- Storing Digital Currencies in a Wallet
1. Choose the Best Digital Currency Exchange
An online market where users can sell, buy, and trade cryptocurrencies. There are two types of exchanges: the first is a centralized exchange and the other one is a decentralized exchange.
Centralized Exchange: Created and run by a centralized authority or company they perform like trustworthy brokers and provide the defense in depth. It acts fast in transactions in comparatively decentralized exchange. Centralized cryptocurrency exchange includes:
- Huobi Global
Decentralized Exchange: It is opposite to a centralized one. There is no single authority to own it; every user is an owner in a decentralized exchange and they have proper access to each task. It performs peer-to-peer transactions in a secure environment. Some examples of decentralized exchanges are:
- 0x Protocol (Matcha)
2. Start Purchasing Digital Currency
This exchanger helps you to purchase crypto which can be any like bitcoin or Ethereum and many others, by using a debit card. To purchase crypto, you must have funds in your bank account so you can purchase crypto. You are freely able to choose from hundreds of different digital currencies, I will suggest you buy Bitcoin (very best for beginners) or Ethereum. A single coin is probably valued at lots of dollars. However, maximum exchanges allow you to shop for a fragment of a coin, which is an extra low-cost purchase for first-time traders. Just like a stockbroker, an alternate will charge for each transaction you are making.
3. Storing Digital Currencies in a Wallet
Cryptocurrency exchanges aren't subsidized through reserve financial institutions, and they’re liable to robbery or hacking. You may even lose your funding in case you forget about or lose the codes to get admission to your account. That’s why it’s so critical to have an at-ease garage location in your cryptocurrencies. As mentioned above, if you’re shopping for cryptocurrency through a booking, you will probably have no knowledge about how cryptocurrency works and is stored. But if you purchased cryptocurrency using any exchanger then you have more options to open like:
Store the Crypto on the Exchange: When you buy cryptocurrency, it is by default stored on a crypto exchanger. If you don't like this default approach and feel less secure therefore you can move the cryptocurrency to hot wallets or cold wallets.
Hot Wallet: Crypto wallets use to store cryptocurrency, they run online over internet-connected devices like mobile, laptops, tablets, and desktops. They are convenient but there is a high risk of data breaches.
Cold Wallet: Cold Wallets are not connected to the internet so that’s why there is less chance of cyber-attack. In such types of wallets, cryptocurrency is stored in USB and hard drives; but it will always be vulnerable to theft and hardware malfunctioning.
Ease of transaction and security are the primary benefits of cryptocurrency investment. Before investing you need to keep a few things in mind for example digital currency type, exchanges, and wallets. As a beginner, you should invest in Bitcoin, Binance coin, Safe Moon, and Dogecoin to earn a quick profit.