Know the Basics About Cryptocurrencies

Know the difference between the different currencies and find the right wallet. Here is an introduction to investment in cryptocurrencies.

Getting started with cryptocurrencies can seem a little overwhelming if you don’t know anything about the difference between Bitcoins or Ethereum, wallets, blockchains, or other things related to digital cryptocurrencies. So, we have gathered some information that might be useful for you to get started with crypto investments.

With the currencies constantly going up and down, it’s a risky form of investment, where you should be sure to place your money at the right time to get a profit from your investment. Therefore, it’s a good idea to gain some proper knowledge about cryptocurrencies, before you get started with crypto investment.

Difference between currencies

Since cryptocurrencies aren’t controlled by any kind of central bank, basically everyone can create a new cryptocurrency with the right technical skill. Many like to praise cryptos for being a decentralized currency, taking the power away from the central banks. But decentralization also makes the currencies more vulnerable. Therefore, you should do proper background checks on the currencies, before you invest in any of the valutas.

Bitcoins have for long been considered the most stable and trustworthy currency. But with its insanely high value, it can be difficult to gain a profit of Bitcoins, since it might already have peaked at an all-time high value above 60.000 dollars in 2021. Other currencies might be more profitable in the future.

Wallets

Just like in the real world, you need a wallet for your cryptos. A crypto wallet is software where you store all of your digital assets. In its simplest form that’s it. A wallet, that you can use for buying stuff and services online with your cryptos.

But a modern wallet has multiple other features, that might be of your interest. Some wallets also work as your marketplace, where you can sell and buy cryptos, which make them optimal for investment. You can also find more advanced features in the different wallets, so it’s a good idea to gain knowledge about wallets if you want to invest in cryptos. Learn more about crypto wallets here.

Exchange Service

Just like with the currencies you are already familiar with (like dollars, euros, pounds, etc.) the transfer from one currency to another doesn’t happen by itself. When you travel around the world dollars don’t automatically change from American dollars to Chinese renminbi’s. So, you also need a service to exchange your dollars for Bitcoins. Here you should also do careful research on which exchange service to use.

Different exchange services will have different rates for buying and selling cryptocurrencies. In some cases, your exchange is combined with your wallet, since you use it for both keeping your money and trading with cryptos. But it’s important to separate the features in your research because what might be a good exchange service for you, might not offer what is a good wallet for you. Find out more about the crypto exchange here.