The Absolute Beginner’s Guide to Investing in Cryptocurrency

Bitcoin. Abstract finance illustration. Elements of this image furnished by NASA

Have you heard people talking about inesting in cryptocurrency and are wondering if it’s a good idea for you? This beginner’s guide will teach you what you need to know so you can decide.

The cryptocurrency market has been abuzz recently as the industry has exploded, introducing new and improved cryptocurrencies. Many of the top cryptos have increased their value by over 8000%, outperforming the most profitable global stock markets.

The crypto market is new and volatile but it shows no signs of stopping in its drive towards insane profit, so it’d be smart to get in now. If you’re thinking about investing in cryptocurrency, here is what you need to know.

What is Cryptocurrency?

“Cryptocurrency” is shorthand for “cryptographic currency,” or encrypted currency. This form of currency can be used to buy and sell goods online like traditional money, but usually only exists digitally

Unlike traditional currency, crypto is also completely decentralized. It isn’t issued by a government or financial regulatory agency. It instead uses something called “the blockchain” to create new “units” of currency and record transactions in a non-falsifiable way.

Think of it as a virtual bank ledger that no one person can alter or add to. This prevents counterfeiting and the willy-nilly “printing” of cryptocurrency, thus reducing its value.

Different Types of Cryptocurrency

Bitcoin was the first cryptocurrencies but many more have come after it. Ripple, Dash, Ethereum, Litecoin, and Monero are the other big players in the crypto market. Many of them have outperformed Bitcoin in terms of growth in the last year or so.

All of these cryptos function differently by “printing” unit of their currencies in different ways and have different market caps.

Bitcoin, for example, has a finite ceiling. There is only so much bitcoin left in the world. And we’re quickly approaching that limit and we can only speculate what will happen when we hit that cap.

Because of this, you may want to consider different currencies and stay clear of Bitcoin.

How to Begin Investing in Cryptocurrency

To invest in crypto, you need two things: a crypto exchange market of choice, and a digital crypto wallet.

On the exchange, you will be able to buy and sell cryptocurrencies like a stock and the wallet allows you to store your own currencies. A site like Coinbase will allow you to do both at the same time by providing you an exchange and a wallet. It’s the go-to for American crypto buyers.

Coinbase also has a mobile application that allows you to watch crypto markets on-the-go too.

The other bonus of Coinbase is that they have an extremely intuitive UI and even guide you through your first crypto purchase so that you don’t make any major flubs.

If you want to look at different options for crypto wallets or exchange you can check out this website. They’ve got good deals on cryptocurrency-related purchases.

Ready to Invest?

There is so much to learn about cryptocurrency to truly be able to invest wisely but hopefully, this brief primer has set you on your way towards obtaining crypto riches.

If you’re looking for financial advice outside of investing in cryptocurrency, consider checking out the Money section of our website.