The concept of cryptocurrency to the uninformed can appear daunting at first, with how confusing and unpredictable it is commonly portrayed in the mainstream. Like with all unknown things, however, learning the basics of crypto investing and the cryptocurrency market is a surefire way of building interest in it while also lowering one’s own hesitation and fear towards it.
Starting slow is essential for tackling such a relatively new and confounding concept as cryptocurrency. As such, there are videos and articles out there on the net that can provide a more in-depth explanation of crypto to those really want to dip their toes into this. Even more nuanced and deeper elaborations on crypto investing can be provided by actual experts in the field such as Coin Center, so long as one knows who these professionals are out there on the internet.
What is cryptocurrency?
First, let us discuss what cryptocurrency is. A cryptocurrency is a form of virtual currency being used currently in today’s market. It is a decentralized form of currency in which no governing bodies or financial institutions are managing it. Why is it a good thing if it’s decentralized, you ask? Well, being decentralized means that there is more transparency between parties. The decentralized system is supported by the blockchain technology that cryptocurrency runs by. The blockchain is a digital asset/ledger where numerous people from numerous countries from numerous computers scan and record transactions. As a result of this, the people who keep tabs on the blockchain and manage the cryptocurrency transactions are rewarded through crypto through the process called mining. You can earn crypto assets without the need for buying crypto. However, mining is long, painstaking, and expensive. You would need the top of the line computers to do so, not just one computer but multiple computers. This is why there is a shortage of GPUs now because crypto miners are hoarding GPUs for themselves. But if you want to get some of this new cryptocurrency without mining, then this is where cryptocurrency exchanges and crypto trading comes in.
For a surface-level look into crypto investing, here are four tips as to how beginners can get into crypto investing.
Open a Cryptocurrency Wallet First
Before dipping into crypto investing, it is essential to first open up a cryptocurrency wallet for receiving, storing, and sending out crypto. Possessing this would not only ensure that your investments are safe from any malicious party, but that you can also conveniently keep track of them for business purposes.
Cryptocurrency wallets consist of two types: hardware wallets and software wallets. The former can take the form of USB drives, SD drives, or miniaturized tablets, all of which have the benefit of being disconnected from the Internet, making any intrusion by any online malicious third parties almost impossible. As for the latter, software wallets are applications that can be accessed through any device, as long as one possesses the required private key to open it. Some of these wallets can only accept one form of cryptocurrency, but there are already many versions that are capable of storing different cryptocurrencies without issues.
There are several options to choose from and one only needs to do some research into which brand/application they want to use in the future that fits their needs.
Research which Crypto platforms to use
Another thing to know before getting immersed in crypto is to know where exactly one can buy and sell cryptocurrency, and there are of course several options around the internet. One only needs to read and listen to reliable sources to find them.
Proper research must be done to identify which exchange services are legitimate and which ones are considered unreliable or just downright scams. Examples of reliable crypto exchange services include Binance and Coins.ph, the former being the largest exchange service internationally and the latter a prominent service in the Philippines. When choosing an exchange service to use, a factor one must consider is the reliability and security of their servers, since there exist risks in the form of cyber-attacks that would result in the loss of any investment in these services.
It is also important to note that a service that may have been the gold standard in the past may now be considered obsolete or faulty in the present, and thus one must be prepared to switch services in the case of these possible circumstances. But how can you buy cryptocurrency? Well, most crypto exchanges allow the purchase of crypto through the government-issued currencies in the world today. But, trading different kinds of cryptocurrency through crypto itself is also being done.
Start off by Buying and Selling Cryptocurrency
For any beginners in the field of investing in cryptocurrency, starting off by buying and selling may be the safest option to take. It is considerably less risky compared to trading and mining crypto, both of which have their own sets of benefits and drawbacks.
The ubiquitous and sound advice of ‘buying low and selling high’ can of course be applied in crypto, and with how often it fluctuates in value on a daily to monthly basis, one needs to be constantly aware of the current trends and respond accordingly. As a recent financial innovation, significant changes are to be expected, and thus one should remember that despite this method being the less risky of the three, there is still the chance that an investor may lose money simply due to overlooking certain factors or through pure chance.
After getting used to the intricacies of crypto investing through buying and selling, an investor confident enough in themselves can then opt to move on to the other two forms of crypto investing.
Avoid Diving Headfirst into Crypto Mining Unprepared
At first glance, mining crypto seems like a no-brainer option to choose for generating income since, as some people would say, the process is like ‘printing money’. There are of course significant caveats with crypto mining, several of which may lead to anyone unprepared to tackle it, such as beginners, to lose a significant amount of their money.
Preparing a crypto mine takes equipment, equipment that is both expensive to purchase and energy-intensive. A successful mining operation would require a large number of processors running at all times to generate cryptocurrency, which would not only be difficult to buy locally in the Philippines but can also be a negative impact on the environment. There have been cases wherein the costs itself of maintaining crypto mines had led to loss instead of profit.
When one is truly considering going into crypto mining, lengthy planning must be taken alongside preparing a hefty amount of investment to ensure a chance of even succeeding.
To summarize, while getting into crypto investments may seem intimidating at first glance, one would only need to do some surface-level research to get a solid image of how it works. By knowing how to open a cryptocurrency wallet, which exchange service to use, and which method of investment to first opt for, anyone taking their first steps into crypto is sure to have less of a rough time. But don’t take this blog post as definitive investment advice. There is still a lot more to do before you can fully invest in cryptocurrency.
While crypto investing has great potential for both profit and loss, and as your other financial assets, one can always rely back on older but tried and true forms of investment such as owning property, an opportunity that Crown Asia can provide for anyone looking for a house for sale in Cavite.
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Read more: Keeping Up With Cryptocurrency: Is It a Good Investment?
