Since their beginning, cryptocurrencies have shown a long-term tendency to increase in value. By owning our private key, we are responsible for our own money. By transferring money to bank accounts, we give full control over our money to the banks. The problem with that is that all banks and financial institutions are centralized, and the risk is in the center. The bank can block you or go bankrupt, and your savings disappear with the bank. With crypto, we are our own bank. We decide who we will send our money to and we can do that without anyone, anywhere in the world, as long as that person has access to the internet and a crypto wallet.
The appearance of these currencies has changed the global market and economy in ways unimaginable before, and due to their transparency and value, many have shown interest in their potential. From business tycoons to simple individuals, cryptocurrencies are offering a chance to everyone willing to take the risk. But, how to start? Where to invest? What are the risks? These are just some of the questions bothering us, so we made the effort to present you with the basics in the text below.
Understanding Cryptocurrencies
Before you get on the “crypto train,” you’ll have to understand the basics. For starters, the currency is not “backed up” by any hard assets of any kind. They are completely decentralized, which makes them a transparent currency to trade, and yet they have a certain value due to the trade and exchange conducted. Also, you can invest in currencies, or in other words, buy them and wait for a currency to jump in value. All these are high-risk endeavors, and therefore, if you don’t have a strong financial foothold, we recommend making it a “side hustle” for starters. If you are buying, you’ll need to analyze the market’s oscillations in order to make a good assessment of the upcoming changes in value. Risk management and assessment are the keys to success, and keeping a cold head in times of distress can make you rich in the future.
Exchange, wallet, stocks …. What?
Yes, there are plenty of terms to define and explain here. First, the cryptocurrency exchange is literally a business of trading currencies and even flat money. The platforms where these trades are conducted are where buyers and sellers meet for this purpose. Now, these platforms are a true blessing, giving you the chance to buy, sell, and exchange currencies with other users. However, their complex trading interfaces and the many charts in different colors can seem like a true nightmare for beginners. Thankfully, most of these platforms have beginner-friendly interfaces, making it easy for you to operate and conduct business. Of course, all these services come at a cost, and there are many fees included. For example, as a beginner using these “friendly” interfaces, the fees are huge, which is why we advise you to learn fast and conduct business via the regular standard trade interface of the platform.
How can you send crypto?
This question is often asked by newcomers as it seems complex, yet it is easily solved. The above-mentioned platform is one way to conduct such activities. You can send money between exchanges, which is one of the best practices to sending crypto, via a withdrawal network. Simply, choose the right crypto and make sure the withdrawal network is matched before sending the currency. Otherwise, it might get lost in the dark abyss of the internet.
Then, there is the sending and withdrawing of crypto from an exchange platform to a wallet. Wallets are storing spaces for your currencies. For example, imagine you want to withdraw money from your exchange platform to your wallet, and then send it from wallet to wallet. In this example, there are a few activities. First, when withdrawing money, you’ll need to simply choose the withdraw function allowing you to do this, and once you’ve chosen the address you want to send the crypto to, you simply hit the button. You’ll need to understand there are a few different types of wallets, like hardware ones, which are a physical storing space for your currency (like a hard drive), or software programs that allow you to access your crypto at any given time via a key.
Once you’ve withdrawn the money and want to send it to another wallet, you’ll have to know the recipient’s address (wallet address) to conduct this transfer. It is possible to send crypto to someone else, transfer your own between different storing bodies (different wallets), and conduct payments by using the currency. Usually, the transfer is conducted within a short time period, and the fees are minimal. So, to summarize, you can send crypto via an exchange platform, withdraw it from an exchange to a wallet, and send it from wallet to wallet if you want.
Basically, there are many open combinations available; each is secure and ensures your currency’s safety.
Broker or self-taught trade
There are many advantages to paying someone else to do all the work for you. However, when it comes to brokers, their fees are quite high, and most of the things you can learn by yourself with some effort and patience. We are not saying it is necessarily a bad idea; it is the perfect solution for people who are unable to commit to cryptocurrencies full-time due to other investments and businesses. But newcomers, who are going for the right breakthrough and have limited resources to invest, know that the fees are high, and also that there might be an abuse of the information. And like the brokers on Wall Street, these interfaces are interacting instead of you on your exchange platforms. One simple piece of advice for beginners is – to try and diversify their portfolio, thereby increasing their chances of profiting sooner. A rich portfolio usually means investing in different currencies you think will grow in value over time.
Verifying your identity
You’ll probably have to submit the needed identification documentation to confirm your identity when creating an account. These are precautionary measures taken to ensure the safety and security of everyone involved.
Verifying your account means verifying your identity after you set up an account on a platform. These measures are preventing fraud and any sort of abuse that might happen.
Work with cash
We strongly advise only investing with cash and avoiding credit card payments, although many platforms are offering this option. Cash is essentially untraceable and, of course, your personal information will be protected and secure. If you happen to have the cash to invest, it is a better and safer option at any time.
Other alternatives to consider are mining or investing in companies that are working with cryptocurrencies. These two have both been popular choices recently.
Understand that your investment is not 100% secure and, unlike investing in companies that can over time grow and expand, thereby increasing your share in them, cryptocurrencies can drastically drop in value or do the exact opposite. It’s a high-risk game, yet in the end, it can be quite rewarding.