If you’d like to find out more about this technology supporting cryptocurrencies, please check our info on the blockchain technology. As a newbie to cryptocurrency, it’s important to read a guide to cryptocurrency.
As a newbie, the world of cryptocurrency is a huge sea of unknown terms and technologies. We all ask ourselves “Where do I begin?”. What to keep in mind and what cryptocurrency keywords to look for when researching? What cryptocurrency resources to use?
This is a guide for the cryptocurrency beginners, to help you understand what to expect and to look out for. Most importantly, enjoy the process, it might be the best experience of your life just yet.
The rise of the Cryptocurrencies
Since the technological literacy of the population increases, approval of cryptocurrencies has raised as well. Online headlines like ‘Bitcoin price hits new all-time record’ and ‘Ethereum price surges’ are beginning to become a regular thing on the masses’ information feed.
What we know for certain is that individuals who were sceptical of Bitcoin and the tech behind it are gradually understanding and becoming increasingly more involved with crypto. The market cap of the whole crypto area is currently at $137 billion, March 2019, and the all-time high was $813 billion in January 2018. Who knows what will happen next month?
The Present Cryptocurrency Space
You’d have known of Bitcoin along with also the ‘altcoins.’ This naming convention began was because back in the times of 2011, forks of Bitcoin appeared from the markets. The forks, or clones, hoping to find their place on the market place, aiming to become ‘greater’ than Bitcoin. Since the appearance of Bitcoin, countless new cryptocurrencies have surfaced, aiming to take some of Bitcoin’s crypto market cap. Until now, Bitcoin has retained its crypto market dominance. But all these altcoins are gaining market share at an alarming rate. Ten times or even more expansion was discovered at a period as short as six months (visit PIVX, an altcoin).
Cryptocurrency, Stocks, and Fiat
The currencies we all know are known as ‘fiat’ in the cryptocurrency community. Although they have ‘currency’ in their own title, cryptocurrencies share more similarities with shares than to money. When you obtain any cryptocurrency or digital token, you’re in reality purchasing some tech inventory, part of the blockchain plus a bit of the system.
The most common places where people can purchase and exchange cryptocurrency are the cryptocurrency exchanges. Exchanges are places where you might purchase and sell your own crypto, with fiat.
There are numerous steps to estimate the reliability and quality of a market, including liquidity, disperse, fees, buy and withdrawal limitations, trading volume, protection, insurance, user-friendliness. Out of all of these, here are a few cryptocurrency exchanges perfect for beginners.
Most of the beginner friendly crypto exchanges will require you to deposit fiat from your bank account and then buy crypto. You will need a bank account, and then follow some basic steps:
- Access the’Buy/Sell Bitcoin’ tab
- Choose the payment method
- Input the desired amount
- Click ‘Purchase Bitcoin’
- View your blamed Bitcoins or other cryptos in your account
When you become acquainted with purchasing crypto and begin to itch for some crypto trading (e.g. BTC/ETH), just carry out an instantaneous transfer from Coinbase into Coinbase Pro (former GDAX) free of cost and begin trading. Consider Coinbase as the location to conveniently purchase and save your crypto and Coinbase Pro as your own gross profit trading platform. Transfers between both are free and instant.
As you gradually find familiarized with different currencies, you may wish the alternative of investing in them. Research your exchanges of choice thoroughly.
When registering on those trades for the first time, do make it a point to confirm your account together with the essential files early, since you don’t wish to get stuck in the centre of a dull and slow admin operate once the trading chance comes. Verification on crypto exchanges may take weeks, and purchase/withdraw limitations might just grow gradually as your exchange.
If you’re investing in a currency other than USD, check out the market’s simplicity of withdrawal and funding. You don’t want your trade to come into fiat withdrawal issues. Make sure to check the deposit and withdraw limits and commission fees.
Exchanges have inbuilt online wallets to keep your cryptocurrency. But for people who heard of this Mt. Gox hack, then you may feel uncomfortable to store it on a cryptocurrency exchange. If you don’t want to maintain your crypto holdings in the exchange wallet, you have the choice to use a more secure wallet. Wallets are considered the safest way to secure your crypto investment.
By keeping your cryptocurrency in a wallet, you eliminate the platform risk, and it’s all up to you. After that, the biggest risk would be to physically lose your cold stored wallet or forget the password. A small network fee may be changed for the transfer of your cryptocurrency to a wallet. Always take precautions and avoid cryptocurrency trading mistakes.
Since it is hard to own something and not physically see it, many cryptocurrency investors prefer to store their cryptocurrency on hardware wallets, to remind them of their crypto holdings. Additionally, the hardware wallet’s user interface makes it effortless to keep numerous coins, which is particularly handy once you take part in ICOs (Initial Coin Offering) later on.
Cryptocurrency as part of Your Investment Portfolio
This topic is exceptionally subjective. Crypto has the capability to realize many ‘rags to riches’ stories, but its volatility makes it inconsistent. As a precaution, the money that you put in crypto ought to be money that you’re fine with losing. Most cryptocurrency investors are influenced psychologically by the volatility of the market. Of course, the risk could be worth it in the end, but this possible outcome comes with a lot of risks and psychological torment.
The popular and conservative recommends this portfolio:
- < 30 years old (maximum) 30% Crypto, 50% Conventional Investments
- 30 – 40 years old (maximum ) 20% Crypto, 60% Conventional Investments