The arrival of Bitcoin in 2009 was probably the first time that many people ever heard about the concept of cryptocurrencies. Even then, only a handful of people paid any attention to how the cryptocurrency could change the world. People started paying attention to cryptocurrency after its first major rally to a trading price of about $260 in 2013. Still, the scepticism about money outside the control of government remained strong – cryptocurrency only managed to break out into public consciousness over the last three years. However, by the time most people were convinced that the idea of cryptocurrency could survive, the Bitcoin ship has sailed.
If you joined the cryptocurrency market to early in 2018 in the hopes of riding an extension of the 2017 rally, you’ll most likely have lost about half of your money now. Interestingly, the massive decline in the market this year has done an excellent job of keeping many beginners out of the cryptocurrency markets. This piece provides insights on 5 steps that could help you move from being a cryptocurrency newbie to a professional investor/trader in no time.
Cryptocurrency: the basics
Cryptocurrency is simply a word formed out of “cryptography” and “currency”. Cryptocurrency is essentially digital money that is cryptographically generated, stored, and spent on without requiring a third-party such as a bank to verify transactions. The records of transactions are stored on a decentralized network called a blockchain – a transparent, permanent, secure, and unalterable ledger of records. Cryptocurrency are functionally supposed to be digital money meant to serve a transactional purpose; however, cryptocurrencies are mostly being held for speculative purposes right now. Tokens, coins, altcoins are different variations of cryptocurrencies meant to serve different purposes; however, the terms are often erroneously used interchangeably.
How to start buying crypto
If you are just starting out with cryptocurrency, the first cryptocurrency you’ll want to buy is probably Bitcoin – it is also the easiest cryptocurrency to buy because of its 53% dominance in the general cryptocurrency market. Some cryptocurrency exchanges such as Coinbase and Coinmama will allow you to buy cryptocurrency with your credit cards (up to a limit). You can also buy cryptocurrencies by making a wire transfer, direct deposit, or ACH if you are unable to use a credit card; however, buying with a wire transfer might take a couple of days before your get your coins. You can get more information, objective reviews, and verdicts about different exchanges on online resources such as www.chainbits.com.
Protecting your crypto from thieves
Buying cryptocurrencies is only half the battle, you still need to take proactive measures to protect your cryptocurrencies from hackers. The immutable nature of cryptocurrencies means that cryptocurrency transactions can’t be reversed; hence, if your cryptocurrencies are lost or stolen; it is technically impossible to recover them. As much as you might be tempted to let everybody know that you are about to become a Bitcoin billionaire, you should try to keep the details of your cryptocurrency holdings private. In addition to using a secure password (not your date of birth), you should also activate 2FA for all your accounts.
Don’t keep all your crypto eggs in one basket
Bitcoin is the biggest, most popular cryptocurrency and its blockchain has never been hacked. However, there are about 2000 other coins and tokens in the market and you’ll be doing yourself a disservice to limit your exposure in cryptocurrencies to Bitcoin alone. The cryptocurrency market is only stating to scratch the surface of its potential, with a market capitalization around $230 billion. If the market were to rise to attain its true potential, it is highly unlikely that all that growth will come from Bitcoin alone.
Navigating the maze of ICOs
If you missed the initial waves on Bitcoin, it might be somewhat disconcerting to purchase the cryptocurrency at its current price around $6,500; knowing fully well that you could have bought it for a fraction of that price a couple of years back. Initial Coin Offerings (ICOs) provide an interesting opportunity to buy into new coins before they gain mass-market adoption. You can think of buying into an ICO as buying into Bitcoin when 10,000 BTC was used to buy $20 worth of pizza. However, you’ll need to devote energy to browse through ICO listing sites, conducting your due diligence, understanding the project, checking out the quality of the team, and being sure that the project has a potential to survive and thrive.