Now that cryptocurrency has become more popular, one of the best things you could do with it is to invest, trade, or mine. Cryptocurrency is not new, and it has been one of the first options for many regarding which asset to invest in. Investing and trading with cryptocurrency is easier today.
Now, if you are unfamiliar with crypto, one of the most important aspects you should know is that it has risks like fraud, hacking, volatility, and many more. Well, it’s like other investments, but in cryptocurrency, if you don’t keep it in mind, it can affect your investment.
Aside from that, there are still other things you should consider. In this article, we will guide you through several questions to help prepare yourself if you decide to start a crypto investment.
What Is Cryptocurrency?
Cryptocurrency is just digital currency that is secured by cryptography. Still, it has no connections to a centralised bank or government – meaning the money can’t be counterfeit or double-spent.
Everything on cryptocurrency is run on blockchain technology, meaning your transactions’ data can’t be altered, deleted, or fabricated. This means your money and your privacy is constantly under several protections.
Even though it doesn’t have a physical form, it can still be treated like any fiat currency, used to pay for goods and services, and even stored in a wallet – still, a digital one. Its name originates from the fact that it is a currency that uses encryption algorithms to verify any transactions made – not to mention several cryptographic techniques.
Do You Know Which Exchanges You’ll Be Using?
Before you can even buy, trade, or exchange your cryptocurrencies, you’re going to need a place that allows you to buy and sell your cryptos – these are called crypto exchange platforms and are pretty commonplace in the crypto world, with there being over 500 of them.
So it would only be natural that you know where to buy cryptocurrencies in the first place before even associating with the crypto world. Anyone can start with crypto as long as they are prepared. One of the best ways to prepare is by ensuring you use a well-regulated and trustworthy platform. In case you have trouble locating such a platform, you can always check our recommendation: BitiCodes.
On top of researching the giant platforms, you can discuss with investors who are way more knowledgeable and experienced than you, so you can at least have several perspectives on which exchange you’ll be using. You can even get tips and tricks from them, so it wouldn’t hurt to ask.
Do You Know Where To Store Your Cryptocurrency?
If you’re all set on where you need to go to secure your crypto coins, probably from the more globally-renowned exchanges, you’ll need a place to store all of the coins you’ll buy and earn over time. So you will be doing more research on the different types of digital wallets and pick out a wallet that best suits your goals.
There are two categories for you to choose your digital wallet from – each with its different types that serve different purposes. Hot wallets are more convenient and easier to acquire for those who are trading around the clock. Then there are cold wallets that are more meant to store your crypto. Though harder to secure and use, they are safer.
Are You Prepared For The Volatility of Cryptocurrency?
Whenever you’re investing, there’s always the presence of volatility, whether you’re investing in stocks or cryptocurrency – it means that their values are never consistent and are very prone to fluctuations.
Suppose you’re aware of the volatility in stocks. In that case, you should multiply those expectations when it comes to cryptocurrency since there’s no way to determine the actual value of these coins.
Conclusion
The bottom line of this article is that you should do proper and thorough research before entering the world of cryptocurrency. Speak to as many experts as possible and learn the strategies that worked for them so that you can hopefully stand on your own two feet at the same level as them and potentially earn more out of crypto. In addition, If they’re open to it, they can tell you their mistakes so you won’t have to commit them yourself.
