An Ultimate Guide To Cryptocurrency

Table of Contents

Exchanging digital currency isn’t for the faint of heart. With cryptocurrency becoming more and more mainstream, there’s a growing number of people looking at trading their BTC to other types such as DOGE (a meme-based cryptocurrency) or even buying up ETHOS (ETHOS).

There are hundreds of cryptocurrencies to choose from, and the markets behind each of them can be confusing for those who are new to the scene.

What is Cryptocurrency?

Cryptocurrency is a form of digital money that is designed to be secure and, in many cases, anonymous. It is closely tied to the idea of blockchain technology, which was invented by Satoshi Nakamoto (the mysterious person/group behind Bitcoin).

A Brief To Cryptocurrency

Cryptocurrencies are entering the mainstream market and becoming more prevalent. There are new cryptocurrencies coming out almost every day, with some only having the value of $0.000001!

There is a lot to choose from when selecting your cryptocurrency investment strategy, but it’s important to be informed before getting started. Here are five things you need to know about cryptocurrency before you dive in head-first.

1) It’s Not An Easy Market To Break Into

One of the big reasons that people have not been able to break into the market is because they simply don’t understand how it works. There is a lot of jargon involved, with terms such as ‘stakeholders’ and ‘proof-of-stake’ and ‘proof-of-work’.

It’s these little terms that make up the cryptocurrency world which makes it inaccessible to some, but understanding how each aspect works is crucial if you want to get involved.

2) The Cryptocurrency Market Is Huge And Growing

One of the best reasons to invest in cryptocurrency is because it’s growing all the time. More companies are looking at ways they can get involved, and there has been a surge of new cryptocurrencies coming onto the market to meet this demand.

Some experts think that cryptocurrency will hit $1 trillion by the end of 2018 alone! It is one of the biggest growth markets around at the moment and there is a lot of money to be made if you get in at the start.

Also Read: Reasons to Invest Your Money in Ethereum

3) It’s A Volatile Market

At this time, cryptocurrency is one of the most volatile markets in the world. One day currencies will be up and running smoothly and then they will fall in value by hundreds of dollars in one day.

This can be seen as a big risk, but it’s also how we make the most money from this market. It means you need to be careful and selective with your investments – but take note – if you hold onto cryptocurrencies long enough they will rise in value like everything else.

4) The Ordinary Person Can Make Money

One of the main reasons we don’t see money flowing into cryptocurrency is simply because not everyone knows how to buy and sell.

While there is huge potential for making money in this market, it’s also true that you need to watch the market like a hawk and know what you’re doing. If you do that then you can make fantastic returns on your investment.

5) You Can Buy Little Amounts

One of the really interesting things about cryptocurrency is that you don’t have to invest a lot of money in order to get involved. There are sites where you can buy one coin, while others will let you buy fractions of coins.

What is Crypto Used For?

Cryptocurrency is often seen as being a storage of value – a place where people can put their money and leave it to accumulate returns. In many cases, that’s true – however cryptocurrency also has a number of uses that you might not be aware of.

The first thing to note about cryptocurrencies is that they are limited in number – only 21 million Bitcoins will ever be mined. That means that as the value of Bitcoin increases, it will become harder and harder to create new ones – which means that there is a steady supply of cryptocurrencies at any point in time.

However, that isn’t the only use for cryptocurrencies – people are now starting to form purchases with them which means they can be used as a currency. You can buy and sell things online and even offline using cryptocurrency as payment, and there has been an increase in the number of retail outlets accepting them as well.

Is It Safe To Buy Cryptocurrency?

If you are new to cryptocurrency then there is a lot of fear surrounding the idea of getting involved. There have been a number of stories about initial coin offerings being scams, and some people have lost money as a result.

One of the biggest risks with cryptocurrency is its volatility – this means that it can go up or down in value at any time. In many cases, this is due to a lack of knowledge about the market and how it works – meaning that you need to be careful when buying and selling.

Another risk is that cryptocurrency exchanges have been hacked in the past. If you buy your currency from an exchange then there is a risk that someone could steal it from them, which is why it’s essential to do your homework first and ensure that the exchange is reputable.

Is Cryptocurrency The Future?

Cryptocurrency is becoming more and more popular as time goes by, and we can’t see this slowing down. As technology continues to grow, cryptocurrencies are going to increase in number – meaning they are here to stay.

However, there is a dark side to cryptocurrency as well. Most currencies have a maximum number of coins that can be mined – this means that for them to increase in value more and more each year then there needs to be an influx of investors buying the currency on an ongoing basis.

That might mean it’s not something we see for many years, but the fact is that cryptocurrency is one of the best ways to store value online. You can invest in this market without exposing yourself to too much risk, and you could see some fantastic returns on your investment.

It’s also important to remember that cryptocurrencies are still very volatile – which means you need to be careful when investing. However, the volatility is going to present opportunities for you because prices change so quickly – just be sure that you have a plan in place before you start buying and selling.

Is It Better To Buy Or Mine Cryptocurrency?

Yes, just be on the safer side, it is good to mine the coins. One of the things to consider with cryptocurrency is whether or not it’s better to buy coins, or mine them instead.

The main advantage of mining cryptocurrency is that you aren’t exposed to any risk – if after some time your mining rig doesn’t generate any coins then it isn’t costing you anything. However, there are many downsides to consider too;

One of the biggest issues with mining is the fact that it’s expensive. You need to buy an expensive rig which can cost you thousands of pounds, and then you need to pay for your electricity costs too.

Many people fear that cryptocurrency is going to reduce in value over time – meaning that there’s no point buying coins now because they will cost less next year. However, mining coins is likely to be even less profitable next year because the difficulty rate will increase.

One of the best things about cryptocurrency is that it’s not controlled by a single person or entity – this means that nobody can change it and make it more difficult to mine without everyone accepting their changes (or leaving and creating a new currency).

If you are looking to invest in cryptocurrency then it’s essential that you know what you’re doing. You can end up losing money if you buy before prices rise, so be careful when investing.

However, mining is an even bigger gamble because there is no guarantee that it will be profitable for years to come. If the price of coins does increase then it might be worth investing in a rig, but if you are looking for a safer way to invest then consider only buying the coins instead.

How Does The Crypto Market Work?

The crypto market works very similarly to the stock market, except that there are no brokers or agents. All you need to do is go online and buy your currency using a wallet, which is an app that acts as your bank account for cryptocurrency.

However, before you invest in any coins it’s essential that you do your research first so you understand how the system works. One of the biggest mistakes that people make when investing in this market is not researching before they buy – which presents them with a risk they simply aren’t aware of, so be sure to do your research first.

Can Cryptocurrency Be Converted to Cash?

Yes. You can convert your cryptocurrency to cash, but it is highly recommended that you choose a secure wallet to do so. If you have chosen the right currency then there shouldn’t be any issues when it comes to converting your coins into pounds or another form of currency – just make sure that you are using a reputable exchange.

However, if you are going to invest in this market then you might not want to convert your coins into cash. It might be wiser to use other forms of investment such as the stock market or Forex (which is a type of trading), but it’s up to you how you decide to invest.

You also need to be aware that there are many brokers and agents who might offer a seemingly good deal, but ultimately they might use your cash for their own purposes.

Which Cryptocurrency is Best?

The truth is that there isn’t a single ‘best’ cryptocurrency, but rather many different ones which will serve different purposes. For example, you might be looking for an online currency which can be transferred easily and offers security.

However, it’s important that you remember that all of these coins are subject to the market – so just because they have a good purpose now, it doesn’t mean that they will have the same purpose in a year’s time.

Top 5 Cryptocurrencies

Bitcoin (BTC)

BTC is likely to be your best option if you are worried about security and anonymity. This currency is used by many people all over the world because it offers a safe, secure purchase that doesn’t come with any issues or risks – which means that this is a good option for anyone who is new to cryptocurrency.

Ethereum (ETH)

ETH is another popular currency that allows for security and anonymity when it comes to exchanges. Although the market has dropped in value recently, ETH still offers an affordable option which can be used by all kinds of investors.

Tether (USDT)

Tether offers a USD that is ‘pegged’ to the value of an asset – this means that it will always be equal to $1, which means you can use it as a store of wealth. Of course, there are some issues with Tether because it isn’t regulated – but if you want to invest in cryptocurrency then this is a good option to consider.

Binance (BNB)

BNB is a currency that is unique to the Binance exchange, which means it offers variety for people who are looking to invest in the market. Unlike most currencies, this one isn’t affected by market movements – instead it rises or falls depending on how well Binance is doing

Cardano (ADA)

If you want to invest in a currency that has some real potential, then it might be worth taking a look at ADA. This currency is set to skyrocket in the next few months and offers some of the best security and anonymity on the market – plus, this is one of the most trusted currencies right now.

Final Thoughts

If you are looking to invest in cryptocurrency then it’s important that you take the time to research first. It might be tempting to jump headfirst into this market because of the potential returns, but it is advisable that you consider your options first – especially if you don’t know much about investing.

Of course, there isn’t a single best cryptocurrency – but there are a few options which might work for you. BTC might be a good choice because it’s the most popular and offers security, plus ETH is another good option if you want anonymity.