Crypto means ‘digital currency’. It is real money, but instead of being paper, it’s digital. Crypto is decentralized, meaning no central banking authority governs and controls the value. It operates as a digital ledger. This ledger is called the blockchain.
There are many benefits to cryptocurrency. They allow parties to transfer money online without issue. There is no central counterparty involved, such as a bank. Cryptocurrencies can make global money transfers instantly at any time, 24 hours a day. Cryptocurrency is also more private while still being secure than bank transfers. These are among some of the advantages of cryptocurrency and digital currency.
Let’s break down the basics of buying and selling cryptocurrency. Here is your beginner’s guide to crypto.
What are the best crypto coins to buy?
Bitcoin and Ethereum are extremely high-value coins, but dozens of cryptocurrencies are worth investing in. Litecoin, EOS, Stellar, Chainlink, AAVE, Dogecoin, Cardano, and Polkadot are all excellent coins to start with.
The more research you do into who created a given cryptocurrency, what it’s being used for, and predictions for its future, the better your investment will likely be.
What Is Bitcoin?
Bitcoin was the first cryptocurrency. It first came to peoples’ attention in 2008 and has since soared in value. Since then, Bitcoin has surged in popularity. You’ll find this coin in all the best crypto exchanges Canada. While it is the most high-value crypto coin, there are dozens of other alternatives, from Ethereum to Cardano.
What Is Ethereum?
Ethereum is the next most popular cryptocurrency in the world. While Bitcoin has a market capitalization of almost $900 billion, Ethereum is just under $500 million. While Bitcoin is purely cryptocurrency, Ethereum is built on a network developing apps, software, and more.
Ethereum is a high-value crypto coin with many upsides, one of many crypto coins that could overtake Bitcoin as the top cryptocurrency in the world.
How Many Cryptocurrencies Are There?
There are an estimated more than 16,000 cryptocurrencies, each varying in value. Each cryptocurrency can have different technical features and functions, with some being pure currency and others being more advanced systems.
Is Cryptocurrency a Risky Investment?
Crypto is high-risk. It is extremely volatile, meaning that prices of cryptocurrency rise and fall with little notice. It is also a high-risk investment because not all crypto coins successfully generate value. Most cryptocurrency fails. Investing in crypto requires lots of care and research, betting on the right coin to generate a return.
Where Can I Buy and Sell Crypto?
You can buy and sell crypto in several locations. Bitcoin ATMs allow you to transfer your cash to crypto or vice versa. You have peer-to-peer networks that allow the buying and selling of cryptocurrency directly with others.
Many people use online exchanges in a smartphone app you can put on your phone and make trades anywhere.
How Do I Buy Cryptocurrency?
To buy cryptocurrency, you choose your method of purchase. If it’s an online exchange, you’re required to open an account and deposit funds into it, which can be done through your bank account. Next, place a trade order. Once you have purchased crypto, you hold onto the currency. As the value rises or falls, you can treat it like a stock or similar investment related to when to sell and how long to hold onto it.
How Can I Make Money with Crypto?
The best crypto exchange profits come from long-term investing. This is how investors steer around volatility and the constant up-and-down that can come with cryptocurrency. Due to the unpredictability of crypto, making money requires strong investing principles, avoiding crypto promising unreasonable returns, and conducting a lot of research.
Is Buying and Selling Crypto Legal?
Yes, buying, selling, and trading cryptocurrency are legal. The regulation is still evolving. Many countries are researching how to create stablecoins and regulate them, ‘stablecoins’ being a cryptocurrency tied to a stable asset such as a national currency or gold.
There are still questions about taxing cryptocurrency, money laundering, and other regulatory matters. However, none of these should impact the average person’s day-to-day investing in crypto.
Are There Other Ways to Invest in Crypto?
To minimize some risk of a high-risk form of investing, you may find other ways to capitalize on cryptocurrency without buying the coin directly. You can do this by investing in an ETF, a cryptocurrency-focused mutual fund, or investing in a company focusing on cryptocurrency.