How to Start Investing In Cryptocurrency for Noobs
You have most likely heard of cryptocurrencies and how they are making investors super wealthy. In the last one year alone, the two foremost cryptocurrencies, Bitcoin and Ethereum, have generated returns of over 600% and 4000% respectively. Essentially, if you had bought $1000 worth of Bitcoin at the start of the year, you would have made $7000 by now. Quite lucrative, right? So how do you go about it?
The first step to investing in cryptocurrencies is to register with a cryptocurrency exchange. A cryptocurrency exchange is simply a platform that allows you to buy and sell your cryptocoins. There are numerous exchanges out there, but don’t just rush to create an exchange account. That’s because, there are several factors you need to look out for before putting your money in an exchange. Some of the factors to consider are as below:
Different exchanges charge different transaction fees. Go for one that has favorable transaction fees, though fees should not be your only consideration factor.
Cryptocurrency exchanges are susceptible to hackers. Several exchanges have been hacked and millions lost. That’s why you need to check out the security features of an exchange. Some of the features to look out for include two factor verification, and google authentication.
Once you select an exchange that’s favorable to your needs and bought cryptocurrencies, you need to store them in a secure place. Though there is an option to leave your cryptocurrencies in an exchanges, this is never advisable, as they can be lost in case of a hack. That’s why you need to create an account in a safe crypto storage. In crypto world, that storage is called a wallet. The transfer process is simple. You just copy you wallet cryptocurrency address into your exchange, then click send, and that’s it.
There are three types of wallets that you may choose to store your cryptocurrencies. These are as below:
These are online based platforms where you can store your crypto coin private keys. The advantage of online wallets is that they allow you to access your coins from anywhere, provided there is an internet connection. The problem is that they are susceptible to hackers.
These are some of the safest cryptocurrency wallets out there. They store your coins private keys offline and are safe from malware attacks. The only drawdown is that you have to be on your computer for you to access them.
These operate the same way USB storage works. You transfer your cryptocurrency keys to a USB-like device, and keep them away from the computer. This protects your coins from hackers since they are away from any computer networks. However, you should always ensure that your hardware wallet is safely stored. Otherwise, you will lose your cryptocoins for good.
For information on what cryptocurrencies to buy at any one time, join crypto trading groups and forums online. These forums and real-time crypto chat groups give you a chance to interact with experienced traders, who can give you insights on the best cryptocurrency opportunities out there, and increase your chances of profit.