Anyone hearing about cryptocurrencies for the first time is held in a situation of many unknowns. To get into the cryptocurrency market, you must understand what they are. At first, the biggest challenge lies on where to start. What are the top keywords to factor? Are there helpful resources? This article is purposefully a beginner’s guide to getting started with cryptocurrencies. In less than an hour, you will have a bright idea of how crypto investing is all about.
The Emergence of Cryptocurrency Investing
As more people become technologically literate, more accept crypto as a legit store of value. Familiar titles such as ‘bitcoin go on a bullish run’ are common. We might also hear about the ‘ethereum price rise’ in public news feeds. At the onset, there was a lot of negativity towards cryptocurrency speculators. Today the attitude seems to have reversed as more are getting educated and investing on leading bitcoin and ethereum coins and the underlying technology. At the moment, the market cap is in the billions of dollars.
What Makes up the Current Crypto Space?
Apart from bitcoin, we have started hearing the term ‘altcoins.’ This name arose back in 2010 when competitor coins started emerging. It seems the clones or offshoots of bitcoin aspire to occupy their market niche areas. Everyone aspires to be the next bitcoin if not better. As of today, because there are many altcoins in the market, bitcoins’ dominance regarding market cap is significantly challenged. The altcoins seem to be gaining market share at an incredible speed.
Fiat, Stocks, Crypto
In crypto language, the regular currency we handle today is referred to as fiat. Despite sharing the name currency in their description, cryptocurrencies can be easily compared to stocks than currency. When you buy the cryptocurrency, you are in essence purchasing a particular part of a tech stock, better described as the blockchain.
The principal place people can go about trading their cryptocurrency is the exchanges. These are platforms where you buy and sell crypto using fiat. There are several ways of gauging how reliable a transaction is. You should consider their level of liquidity, fees, spread, insurance, security, trading volume, and limits on purchase and withdrawals.
Most exchanges can store your coins in online wallets. However, with the occasional cases of hacks, it is not advisable to have your coins stored online. A recommended storage alternative is through paper wallet services. To understand how to go about this, carefully follow the online tutorials that explain how it is done. A hardware wallet is another safe way of holding onto your coins. It also gives the user a tangible feel of their holdings. If you are a regular participant in ICOs, you might need a hardware wallet to keep your coins for future use.
Percentage of Altcoins as a Portion of Your Investments
In spite of the occasional rags to riches stories from bitcoin holders, exercise great caution. Having no collateral, holding bitcoins are very unpredictable. Those who are smart only speculate with money you are willing to lose.
Opinions on cryptocurrency investing vary from person to person. This article points out a general picture, and every reader should exercise their discretion whether to spend or not.