The world of crypto-currency is one that can seem vast to many. They are complex in many different ways and so, not that many people understand how it all works. Before investing in crypto-currencies, it is important to understand that they are not a sound investment because they are volatile and can be manipulated. Crypto-currencies are derived from a blockchain with a blockchain being a way to store data. However, what makes blockchains different is that the data is distributed to a number of different servers that are not owned centrally. Any new block that is added, will be referenced to the previous block. Therefore, a crypto-currency is the information stored within a block.
What is a crypto-currency?
A crypto-currency is a revolutionary way to make payments and transfer money peer to peer across the world. The transfer can be made quickly, with lower fees and securely. Investing in a crypto-currency is simple while it is possible to profit should it increase in value.
To get started with crypto-currencies, you will need to find an exchange such as Coinbase. There are many exchanges out there but there are some that are trusted and others that are unknown. Therefore, it is important that you carry out the correct research to ensure you choose the correct exchange for your needs. When using these exchanges there will be a fee to pay, which will be a percentage of the amount you are purchasing.
Using an Exchange
As you will be using real currency to make your purchase, you will be required to verify your identity. You will need to provide your photo ID, passport or driver’s license. It is worth remembering that often, verification can take some time.
Making your Purchase
Making a purchase can be achieved by using a credit or debit card or even Paypal in some instances. Using a credit care or debit card is the quickest option but it is likely that the fees will be higher.
What currencies should you purchase?
Everyone will know that the original crypto-currency is Bitcoin and that is the number one in market cap. It is seen as the main cryptocurrency, which is why it is often the best one to begin with. However, if you carry out the correct research, you might find that some of the other currencies are the better option for you. Some of the top currencies are Litecoin, Ethereum and Ripple to name but a few and all perform in their own way. If you are unsure but have a certain amount to invest, you could even spread it across several crypto-currencies.
As a newcomer to the world of crypto-currencies, it is possible to find out how they have performed over periods such as daily, weekly or monthly, using sites such as CoinGecko. This will give you an idea of how they have performed recently and what they have done over the previous weeks or months.
What is next?
Once you have decided to invest in one or more crypto-currency, it is time to sit tight and wait for your investment to grow. It is important to realise that crypto-currencies can rise and drop quickly but remember to invest wisely.