Cryptocurrency has become immensely popular across the globe in the past few years. Regardless of its multiple bearish runs and volatility, more investors are investing in it in recent times.
Launched in 2009, cryptocurrency has withstood the test of time and come a long way. Today, Bitcoin (BTC) is the world’s largest digital currency by market capitalization, thanks to its positive adoption and safety.
If you want to invest in cryptocurrency, you should know its basics and its working. Many investors fail in the crypto market because they do not understand it comprehensively before putting money into it.
Let us find out what cryptocurrency is all about and how you can become a crypto investor.
Cryptocurrency, sometimes called crypto, is any digital currency that uses cryptography for transactions. Digital currency is free from a central issuing regulatory authority and uses a decentralized system for its transactions and issuing of new units.
Did you ever think about using a currency that is not operated by banks?
Cryptocurrencies are digital payment systems that do not rely on banks or any financial authority. These are peer-to-peer system which enables all to use them anywhere in the world.
Instead of being physical money, cryptocurrency exists online on blockchain technology that is protected by cryptography. When you make a crypto transaction, it is recorded permanently in a public ledger where it can be traced at any time.
You can send cryptocurrency to anyone across the border as it is available 24/7. Many global leaders have come forward in the support of digital currency as the best alternative to fiat or traditional currency.
Carl Runefelt, alias, The Moon, is a global crypto leader who has invested in more than 350 crypto startups.
He says, “When Bitcoin or when the world is in some type of volatility some kind of uncertainty, I think that is generally something strong for Bitcoin because Bitcoin has zero third-party risk so no matter what happens, you never have any third-party risk against anything. So, Bitcoin is the safest place in the world to put your money or put your wealth.”
How to Buy Cryptocurrency?
Investors are always looking for the right opportunity to invest money and cryptocurrency has already become favorite of investors worldwide. You may have met people talking about making millions of dollars with cryptocurrency.
You might be wondering how to repeat their stories your way!
To buy cryptocurrency, these are the following ways you can follow.
- Chose a crypto exchange to buy cryptocurrency. Multiple crypto exchanges are working in the market such as Coinbase, Binance, etc.
- You can buy cryptocurrency through online brokers who offer different ways to trade cryptocurrencies. In addition, these platforms offer other financial assets as well such as bonds and stocks and offer lower trading costs.
- Once you have chosen an account, the next step is to fund it. You can put money in your crypto account using a credit card. Some platforms also accept wire transfers.
- You can now place an order via the exchange or your broker’s platform.
- Lastly, you should store your cryptocurrency. There are two ways for it – one, you can store it in an inline wallet available on the crypto exchange and second, in an offline wallet that you can buy and keep it alongside.
How does Cryptocurrency work?
There might be many questions in your mind about digital currency, but on top of those, “How cryptocurrency works?”
Cryptocurrencies are virtual currencies that are supported by blockchain technology and not by the traditional banking system. The units of cryptocurrency are processed through mining that involves computer power to solve complex mathematical problems.
You can also buy digital currency through a broker. Cryptocurrencies have a limited supply to maintain an inflation hedge.
Carl, on his YouTube channel, The Moon, says, “Bitcoin is the best hedge against inflation that we have in the world right now, and Bitcoin is also the best form of money that we have and have maybe ever seen in the history of humans.”
The protocols of Bitcoin are designed in a way that only a limited number of BTC can be traded.
Furthermore, cryptocurrencies are still emerging in financial terms and their different applications are still new to many. You can also trade financial assets such as bonds and stocks using cryptocurrency.
Understanding cryptocurrency is significant for crypto users and anyone interested to start investing in it.
Successful crypto investors plan their investments with a strong trading strategy and a remarkable understanding of the crypto market. So, if you are looking to invest in cryptocurrency, the above-mentioned information can help you make the right decisions.