Should You Invest in Cryptocurrency?
It is safe to say the cryptocurrency has gone mainstream. While you may have only heard about it from the most tech-savvy of individuals ten years ago, you might listen to your grandparents talking about investing in Bitcoin these days.
It is also making a big push in the business world. Beyond investing, many businesses are looking for ways to use cryptocurrency as a part of their digital transformation. Mass adoption might be a way off, but it is safe to say that crypto is here to stay.
This rise in prominence has many people looking to put some money into the crypto markets. They see prices climbing higher and hear about people who made a fortune, so they don’t want to miss the opportunity. While there is money to be made in the crypto markets, you should take some time to learn a little about it before you start.
Coins Are Secured Using Blockchain
If you are new to crypto, you might wonder how transactions are secured and validated. What stops people from double-spending coins? What keeps criminals from altering the records? The answer to that is the blockchain.
Without going too deep, the blockchain is a decentralized ledger that contains all transactions. As they occur, transactions are packaged into blocks, and the blocks are released as cryptographic puzzles. Miners solve these puzzles to validate transactions, and for using their resources to do so, they receive a reward. Once a block is added to the chain, it is dependent on the other blocks, and it can’t be altered.
Blockchain isn’t even just for cryptocurrency. The security of blockchain can be used for other purposes. In recent years, we have seen efforts to use it as a part of security DevSecOps and validate smart contracts.
Thousands of Cryptocurrencies Available
For many people, Bitcoin is synonymous with cryptocurrency. While it might be the biggest name in crypto, it is far from the only coin available. There are thousands of coins you can use for investing. Beyond Bitcoin, you have altcoins like Ethereum, Dogecoin, and Litecoin. Different coins operate in different ways, and they all have their pros and cons.
If you are going to invest in crypto, it is good to start with the more established coins. With that said, you can find great opportunities with some of the smaller cryptocurrencies. Whereas a single Bitcoin costs tens of thousands of dollars, you can find other coins that cost anywhere from a few hundred dollars to less than a dollar. Many of these coins present more risk, but there is also the potential for bigger payouts.
You Can Enter With Minimal Investment
When you look at the prices of coins that cost thousands of dollars, it does not seem practical for investing or commercial transactions. To get around this, you can buy most crypto coins in pieces. Using Bitcoin as an example, you can buy as little as 0.00000001 Bitcoin. That small unit is called a Satoshi. At the time of writing, 10,000 Satoshi sells for a little over four dollars.
Choose Secure Crypto Wallet
With cryptocurrency becoming more popular, it is also becoming a more common target for criminals. What makes it even worse is that it is hard to recover crypto coins once they have been stolen. As one of your first steps, you will want to find a secure crypto wallet before investing.
Beyond finding a good wallet, there are steps you should take to keep your crypto coins secure. Make sure two-factor authentication is turned on. If you have a lot of value in coins, you might want to consider splitting them between multiple wallets. Also, be aware of crypto scams.
Be Careful with Price Volatility
The volatility in crypto markets can get wild. With some coins, the prices can double in a matter of days and then go back down just as quickly. The more established coins don’t experience as much volatility, but it is still significant compared to conventional investments.
If you are going to invest in crypto, you need to expect volatility. Prices can swing wildly in a single day, and you need to be ready to ride out some of these dips. You also want to be careful with the coins in which you choose to invest. If you are going to take a chance on a high-risk coin, only invest what you can afford to lose.