When you have a good understanding of what cryptocurrency is, you can begin to learn how you get started and invest in your own.
Cryptocurrency has taken the world by storm and has become one of the most popular and profitable online activities. This is because cryptocurrency has the potential to make people a lot of money, build their wealth, and can be accessed by individuals that have the internet.
While cryptocurrency is easy to access, it still requires knowledge, skills, and expertise to be successful. It’s not an easy activity to complete and can be difficult to get to terms with. The market can be volatile and there is a lot of jargon that you need to become familiar with.
Whether you are a keen investor or a complete beginner, you should always start with the basics when you start your cryptocurrency journey.
Here are some top tips to help you get started with cryptocurrency.
How to purchase cryptocurrency
The first place you need to start is by purchasing coins.
You should always check the regulatory, legal, and tax implications in your country before you purchase and sell cryptocurrencies. This will ensure that everything you do is legal and you can benefit from your hard work and investments.
Coins can be purchased in a variety of ways, for example, on exchanges, ATMs, or other similar services. You will need to learn about the different platforms available, so you can find a reliable one that you can trust and are happy to use.
Exchanges
Exchanges are the most popular way to invest in cryptocurrencies because they offer users a variety of benefits and features that can be utilized to buy, sell, withdraw and hold cryptocurrency.
You can use your credit or debit card, bank transfers, or other supported payment methods, to buy cryptocurrencies like Bitcoin. There are a variety of exchange platforms that can be used around the world. The most common exchanges on the market are currently Coinbase, Binance, Bitfinex, Luno, and Kraken.
Each platform will have its own rules, for example, some platforms are decentralized so that users can stay anonymous, whereas others require identity documents to be submitted so they can regulate it.
ATMs
ATMs are currently used to purchase the popular bitcoin. There are thousands of these available worldwide, and enable you to buy bitcoin with your debit or credit card. They have been made to work similarly to a normal ATM. The only difference is that you will need to enter the address where the bitcoin is to be sent.
You can also purchase cryptocurrency with a credit card, PayPal, a peer-to-peer (P2P) exchange service, through mainstream brokerages, and much more.
Before you purchase cryptocurrency
When you start investing in cryptocurrency, you will want to make sure every step is taken with care and precautions, especially as you first get started.
As a fully digital currency, cryptocurrency is just as prone to cyber-attacks and hackers as anything else on the internet. However, where you will be dealing with secure and sensitive information such as your bank details and making money on your investments with rewards and trading, it opens you up to even higher risks.
This is why it is vital that when you set up your accounts, you do so with additional security and strong passwords.
When you begin investing in cryptocurrency, you will have to obtain a private key with a public address so that you can authorize transactions. You must understand the public address is visible to others, and you should keep the private key secret.
The public key appears on a transaction, so they can be traced while being kept confidential. All history of cryptocurrency transactions is made available, but user information is always kept secure.
Choose your platforms carefully
The reason why you want to invest in cryptocurrency will dictate what kind of platform you decide to use.
Firstly, you will want to ensure the platforms you use are safe, secure, legitimate, and offer good rewards. For example, you may wish to only use the platforms that offer the proof-of-stake model in crypto staking.
This will enable you to earn interest on your investments, and play a more positive role in the environment as you use less energy to build on your investments.
You should also choose platforms that meet your level of experience. Bitcoin is great for all levels, whereas Binance has been developed for more advanced traders.
Set up your payment options
Whether you use a platform that requires photo identification or none at all, you will need to set up the relevant payment options. The setup process is identical to setting up a brokerage account.
You should be able to directly connect your bank account, debit card, or credit card to the platform. You will need to make sure that the bank you hold an account with accepts the cryptocurrencies that you are investing in, as some banks are still stopping and questioning investments.
Some banks will charge you. You will also need to ensure that the interest rate of your credit card (if that is your payment method) does not clash with the volatility of the cryptocurrency market, as this may inflate your investments.
Once you have set up your payment details on the relevant platform, you will be able to place an order for your cryptocurrency. Simply use a bitcoin ATM, or head to the platform website to get started.
The online markets have now evolved to look like stock brokerage accounts, so if you have experience in other investments, this will feel familiar to you.
You can make one-off purchases after conducting your research, you can set up recurring investments so you can regularly make investments.
Storing cryptocurrency
Once you have purchased cryptocurrencies, the way you store and handle your investments is vital. The best way to store your cryptocurrency is with wallets.
These are a place to store your digital assets and are typically offered on bigger platforms such as bitcoin. They are made so that investors have more control over their cryptocurrencies, as a personal wallet will keep them off the market and their keys private. These are good for short-term investments and holdings.
There are currently two types of wallets that you can use, hot wallets and cold wallets. Hot wallets are wallets that are fully online and are stored on phones, computers, and tablets.
These are good for small cryptocurrency investments and for individuals who are regularly active on the exchange. This is because they are linked with public and private transactions, and act as custodial accounts that have been provided by the exchange platform.
Cold wallets are not connected to the internet and enable investors to store their private keys and view their portfolios with limited risks. Many platforms will enable you to generate a paper wallet, which can be printed and secured in a safe place, such as a safe or a bank deposit box.
Alternatively, you can use a USB drive hardware wallet which will have the same level of security to keep your private keys secure offline. These are common, as they have less risk of being affected by any viruses.
The way you store your cryptocurrency investments is vital to your success.
How much should you pay for cryptocurrency?
Cryptocurrency is an extremely volatile market, as can be seen with the most recent drop in bitcoin value.
As with any investment, the prices will go up and down, depending on what is going on in the market. The right price to pay will depend on a variety of factors, including what the markets are doing and a reasonable fee from the exchange platforms.
There is a general rule in the cryptocurrency world, as that is to avoid contributions that are more than 5% if they are risky assets, like crypto. Always make sure that you are okay with losing any money that you are deciding to invest, so you can plan for the worst-case scenario.
Selling cryptocurrency
Cryptocurrencies can be sold on the same platforms that they were purchased from. Once you have learned how to purchase cryptocurrency, you will find it easy to sell as the process is very similar.
Depending on what exchange platform you are using, you will find you come up against a set of rules for selling cryptocurrency. You must familiarize yourself with these so you can reduce any risks and ensure an easy trading space.
Some of these rules might include a limit on how much you can withdraw in a day and a month, as well as charges based on the percentage of cryptocurrencies that you sell.
Trading
Trading cryptocurrency goes beyond just buying it, and creating skills that will enable you to learn and predict movements in the prices of cryptocurrency so you can maximize your investments.
For example, you may learn about how certain prices rising and falling can be a good investment for you to make and take advantage of. Trading cryptocurrency is advanced, and something that you should learn how to do properly. It requires knowledge, trading styles, complex strategies, and knowing your limits.
Once you have put these top tips into practice, you should always continue to learn so you can become a better crypto trader.