During the last years, we heard about the virtual currency market, how it evolved and how it grew everywhere. But it may be somehow complicated to start investing in Bitcoin (BTC) and other cryptocurrencies. And yes, we are living a revolution of money. Virtual currencies work in a different way compared to other fiat currencies, but they are very effective and useful in many different fields.
If you haven’t yet invested in virtual currencies, the best what you can do is search information about them and take a decision on whether it is a good idea or not place your funds in this volatile market. In this article, you will have some simple rules that would let you know how to start investing in digital currencies such as Bitcoin, Ethereum (ETH) or Litecoin (LTC).
How Much to Invest?
This is a very interesting point. How much should I buy in virtual currencies? Do I really need to invest in a whole coin if I want to enter the market? Where can I do it? This is very simple, and all these questions have clear and simple answers. The first thing we need to mention is that you should never invest more money than you can afford to lose. This is the golden rule that must be respected at all times.
Do not take a credit to invest in this market and do not try to sell goods that you do need just to bet in cryptocurrencies. The price of most of the digital currencies tends to fluctuate abruptly. In some cases, the numbers can be huge (more than 20% or even 100%!).
The CEO of Debt Rescue, Neil Roets, commented on the matter:
“Some of them [investors] had gone as far as pawning their vehicles, taking out second bonds on their homes and borrowing money on credit cards in order to buy cryptocurrencies.”
The answer to the second question is also very simple. Most of the cryptocurrencies allow users to buy small fractions and part of them. For example, Bitcoin is currently being traded at around 108,000 ZAR. Buying an entire BTC would be very expensive for most of us. Instead, it is possible to purchase 0.001 BTC for just 108 ZAR.
If you are already decided to purchase some fractions – or maybe a whole Bitcoin – there are different virtual currency exchanges that would let you do so. Here is a list of trusted ways you can buy Bitcoin. Those are the most known and the best in terms of security and usability.
Which Currency Should I Buy?
This is also a good question that is related to the kind of investor you are. If you are in the game for the technology, then, those projects that offer the latest improvements in blockchain technology may be great for you. In this case, the flagship is Bitcoin (BTC) and a currency that should be in your portfolio.
If instead, you are a developer, EOS, Ethereum, Stellar (XLM), Tron (TRX), or Cardano (ADA) may be a great choice for building up your crypto portfolio. Instead, if you prefer to use virtual currencies to have important returns in a short period of time, you should be looking at tokens from ICOs or not so known virtual currencies.
If the main intention is to hedge your funds against an international or economic crisis, another good thing to do is buy Bitcoin (BTC), which tends to be more stable than the rest of the alt-coins. Cryptocurrencies are not related to any government and most of them are decentralized, like Bitcoin or Litecoin. These are great options for people that do not agree with the current financial and economic system and wants to stay away from it.
Other investors want to preserve their information and process private transactions. There are some virtual currencies such as Monero (XMR) and ZCash (ZEC) that allow people to send and receive payments without giving personal information or the amount of money transacted.
Where to Learn About Virtual Currencies?
If you want to know more about a specific virtual currency, there are different ways to do that. For example, you can go to the official website of the currency and read the latest news or read their white paper. A useful way to see how the development of a token is going on is to check the roadmap and compare it with the white paper to see if developers are working on it as they should. The social network Reddit is a good place to be in touch with the community of a specific currency. There are subreddits specifically designed for each virtual currency and they have, in general, very active and kind communities.
Where to Store Cryptocurrencies?
If you have bought virtual currencies in an exchange, then you may be wondering: ‘Which is the next step?’ Things are simple, but having your cryptocurrencies in an exchange is not the best decision you can take. These platforms are user-friendly, but they are very unsafe. Hackers and stealers may be able to attack the exchange and take away an important number of cryptocurrencies from individuals. Here is our article dedicated to ways you can securely store your crypto.
If you want to avoid it, the best would be to send the virtual currencies you bought to another wallet. Crypto wallets that work in desktop computers or in your smartphone are much better than exchanges, but they are not as safe as cold or hardware wallets. Hardware wallets allow investors to have their funds completely secure. As they are not connected to the internet, it is impossible for an external party to access the funds stored on the device. There are different hardware wallets in the market, the two most famous are Ledger and Trezor, and both can be bought on their official site.
To buy cryptocurrencies it is very important to be informed about what virtual currencies are and how they work. But it is also a key point to accept the risks associated with the market, the volatility, the difference between cryptocurrencies and more.