A cryptocurrency is a digital currency that works on the concept of blockchain. Now, if you are a first-time crypto investor or planning to get started, I’m sure you don’t know as much about this marker as you should.
Did you know that only about 20% of the world population has invested in or knows about cryptocurrency?
That means the crypto market is a gold mine that is yet to be explored completely. So, now is the best time to invest in cryptocurrencies. But, you cannot afford to make decisions abruptly or impulsively when it comes to crypto trading, because the market is highly volatile and you can lose everything in a blink if you are not careful.
Consider these things before starting your crypto journey
Learn the basics
You may not need to be a pro in order to start investing in cryptocurrencies, but it will be immensely helpful to have a basic understanding of this market and how cryptocurrencies work.
Cryptocurrencies operate on the blockchain, which is the decentralized technology for the peer-to-peer transfer of digital data, including currencies. It’s like a token or coin that can hold value as well as can be used as a medium for value exchange.
Cryptocurrencies are of different types - utility token, security token, payment token, stable coin, and more - depending on the use.
Decentralization
Decentralization is one of the core features of blockchain, the technology behind cryptocurrencies. It ensures that the crypto transactions can work in a decentralized, middleman-free manner.
Since crypto transactions are decentralized, they are not governed by centralized entities such as banks or the government. Only the end-user has a control over his/her cryptocurrencies. Without a middleman, transactions are faster, more secure and low cost.
Not all Cryptocurrencies are the same
Before you start investing in cryptocurrencies, you should know that not all cryptocurrencies are the same. In fact, not one coin will be the same as any other coin. For instance, bitcoin is a payment-focused coin built with a focus on secure, low-cost cross-border payments. Libra coin, on the other hand, is a digital currency (payment system) for e-commerce businesses that provides a middleman-free (low transaction fee) means for performing online shopping transactions.
Altcoins
Altcoins are cryptocurrencies that were/are created as an alternative to bitcoin, usually to overcome its limitations. For instance, bitcoin is a highly volatile cryptocurrency. To overcome this, stablecoins were created that replicate their price based on the value of the US dollar or other fiat currencies in order to bring stability to the market.
New Cryptocurrencies worth your time & money
Investing all your money in just one or two cryptocurrencies is not wise. The wise thing to do instead is to diversify your portfolio across multiple crypto and fiat assets.
You should keep track of the new cryptocurrencies and projects coming into the market and invest in the ones that are actually worth your time and money.
For example, the Libra Ecosystem project that aims to solve the various issues of the multi-billion dollar e-commerce industry might just be the thing you want to invest in. Always research a crypto/project before you invest.
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