In 2019, cryptocurrency will be 10 years old! This journey of 10 years has been amazing because for the first five year of existence of the concept of “digital money”, there were very few people who took to the idea. The only people who believed in the concept were programmers and mathematicians. They saw cryptocurrency as a challenge to solve problems and crack codes in exchange for a reward. Trading began soon thereafter and the high returns attracted all other traders.
The value of cryptocurrency has seen a significant increase since 2013, with an average rise of more than 900% in 2017. The future of cryptocurrency is looking bright and a lucrative investment option. You must do your research to understand the investment mechanisms before you make the first steps into the world of cryptocurrency. This guide will walk you through the entire process step-by-step.
Step 1 – Understand the elements of cryptocurrency world
The concept of cryptocurrency is not something that can be taught at any management institute or financial course. This subject is easily learned from the internet and from existing investors. It is important to know the terms cryptocurrency, blockchain, and Bitcoin network. Simply stated, cryptocurrency is peer-to-peer electronic money transmission that works only within its network and not through any centralized node.
Blockchain is an electronic public ledger that records Bitcoin transactions between nodes and adds them to the chain. This makes the system transparent. These blockchains can later be used to create new blocks that can be used for mining cryptocurrency.
The Bitcoin network is simply a network of nodes or computers that transact on the network.
Step 2 – Understand the benefits and uses of cryptocurrency
Cryptocurrencies are an innovative concept. You can categorize the uses of cryptocurrency as follows:
* The purpose of purchasing: This form is the simplest in which any currency may be used. Mobile wallets are becoming increasingly popular in digitalized areas where wallets have gone digital. With both the currency and wallet being digital, this is a significant step forward. You can purchase a variety of commodities, including computers, groceries, and some food and retail outlets, using your digital currency. You only need to verify that they accept this payment method.
* Investment purpose: This is the most popular use of the cryptocurrencycoin. You can trade Bitcoin using the same trading platform as Fiat currency. This investment is different from any other because the investment mechanism is similar to investing in stocks. However, stocks are dependent upon parameters such as growth of the company or turnover, while cryptocoins growth depends on demand and supply.
* Travel and stay bookings: There are many online travel and accommodation companies that accept cryptocoins. This trend is also being extended to the real-estate market.
Two of the biggest benefits of cryptocurrency are their decentralization and speedy transactions. These are the strengths that will make cryptocurrency stand out in the future.
Step 3 – Calculate the amount of surplus money you can invest
Once you have convinced yourself of the value of investing in the cryptocurrency network you will need to calculate the amount you want to invest. Wisdom advises that you start small and monitor the returns for at least six months before investing large sums. Although this is a high-risk investment, the returns are also high compared to other investment options.
Step 4 – Register on a network to get a wallet
This is an important step. This is an important step. To register, you’ll need to buy cryptocoins online. Indus Coin is one such trusted service provider. You can purchase your cryptocoins here and keep them safe in a wallet. You can access your account balance and past transactions. The wallet will also generate and request a new password each time you want to transact. This protects your wallet from Trojans and wallet-stealing viruses.
You can also download the basic view of your crypto wallet to your smartphone as an app, so you are always connected.
Step 5 – Keep track of your investment
It is not as simple as it sounds. However, you should be cautious. This is not an investment you can just invest and forget about for years. Markets for cryptocurrencies are extremely volatile, and there have been many fluctuations. This is because it is determined only through demand-supply mechanisms. Even a slight hitch in your investment can have a significant impact on your return. Although it is immune to inflation, decentralization exposes it to regulations from the Government that may not be favorable. These scenarios are important to consider and you should use your investor sense to manage the money.
The world’s markets will be revolutionized by cryptocurrencies. Both supply and growth rates are very encouraging. They are also more valuable because they are a scarce resource. This will be the only investment that will bring you great returns over time.