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30 Aug
2017

Raul Harman

Innovative enterprise consultant
 

Crypto and virtual currencies such as Bitcoin and Ethereum are currently two of the most popular investment products available online, and in 2017, both currencies have gone up 400% and 5000% respectively. Unlike other, government-regulated currencies, cryptocurrencies are anonymous, secure, and more importantly, decentralized. This allows users to store money and secure payments without having to use their name or go through a bank. What makes cryptocurrencies so appealing is the fact that transactions can’t be counterfeited or reversed, as well as low purchase and transaction fees. But with so many different currencies, exchanges, and options to choose from, finding the right one for your personal needs can be a little tricky.

Why should you invest in cryptocurrencies?

There are three main reasons people invest in cryptocurrencies:

  • to hedge their net worth against the inevitable fall of the government-regulated currencies such as the United States dollar

  • to support the vision behind the cryptocurrency, and that is free, hard money, made by the people, for the people

  • to understand and support the technology behind cryptocurrencies

There are those who invest in cryptocurrencies out of the fear of missing out on the great opportunity, as well as those hoping to make a quick profit during the peak of the cryptocurrency bubble. This is simply a bad business move and as such, will most likely leave you with far less money than you initially hoped for.

Choose the cryptocurrency and the appropriate exchange

Up until this year, the single most popular option was Bitcoin. Granted, it is still the dominant cryptocurrency, but its market share has dropped significantly (from 90% to around 40%), due to tears in the Bitcoin community, but also due to the rising popularity of other virtual currencies such as Dash, Ethereum, Monero, Litecoin, Ripple, and others. Smart investors tend to invest in more than one currency, although Bitcoin remains to be the staple of everyone’s crypto-portfolio. The best place to start is Changelly, which marks the market caps or values of relevant currencies.

All cryptocurrencies have their own exchanges, but the best practice is to stick to larger exchanges in order to increase the chance of your trade going through. The largest exchanges are Bitfinex, GDAX, Gemini, and Kraken. They offer large volumes of coins for trade and they are the places where you can trade USD for Bitcoin and Ethereum via bank transfers and credit cards. Once you’ve selected the exchange of your choice, you will need to verify your account using an ID such as your passport or driver’s license. Have in mind that although the exchange of cryptocurrencies is anonymous, the trade between real and virtual currencies is not.

Make a wallet

When you buy cryptocurrency, the amount you’ve bought is linked using a public key (a piece of digital code used to indicate the amount). A private key indicates the ownership of a public key and losing it means losing your money, so be careful. There are a few types of wallets, with the most popular being hardware or USB wallets such as Ledger Nano S, desktop or installed application such as Exodus, Jaxx and Parity and web-based, such as MyEtherWallet, which can be accessed anywhere but pose some degree of security risk.

Create a contract inside the wallet to send and receive funds

Once you have your wallet, it’s time to purchase some coins. Buying cryptocurrency from the exchange is as simple as pasting your public key into the exchange, and selling it means you have to paste the exchange’s public key into your own wallet. There’s a pretty straightforward transaction contract as well as a confirmation window, in case you change your mind or make a mistake. If you’re adamant about security issues, one of the best options is to buy Dash, as it is one of the most secure cryptocurrencies currently available.

As you can see, investing in cryptocurrencies offers numerous benefits that the “normal”, government-regulated currencies don’t. The process itself is simple and all you have to do is get verified on a specific exchange and keep your coins safe by storing the private key in your wallet.  

 

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