Cryptocurrencies for Beginners: An Introduction

Introduction: To Invest in Cryptocurrencies

The first cryptocurrency to exist was Bitcoin, which was created using Blockchain technology and most likely introduced in 2009 by the enigmatic figure Satoshi Nakamoto. 17 million bitcoins had been mined as of the time this blog was written, and it is thought that a total of 21 million bitcoin could still be mined. Ethereum, Litecoin, Ripple, Golem, Civic, and Bitcoin Cash and Bitcoin Gold hard forks are some of the other most widely used cryptocurrencies.

Users are advised not to invest all of their funds in one cryptocurrency and to try to avoid making investments at the height of the bubble. When the crypto bubble was at its height, it has been noticed that prices have abruptly fallen. Users should only invest money they can afford to lose in cryptocurrencies because the market is highly volatile and because they are decentralized, governments have no control over them.

Steve Wozniak, a co-founder of Apple, predicted that Bitcoin is a true form of gold and that it will eventually surpass all other currencies, including the USD, EUR, INR, and ASD, and become the standard form of payment worldwide.

Cryptocurrencies: Why Invest in Them and Why Not?

After the first cryptocurrency, Bitcoin, more than 1600 others have been introduced, each with a special feature.

In contrast to fiat currency, where a user needs a platform like a bank to transfer money from one account to another, cryptocurrencies were created on a decentralized platform, which means users don’t need a third party to transfer cryptocurrency from one destination to another. Cryptocurrency is based on a very secure blockchain technology, and there is almost no chance that someone will hack into your account and steal your funds unless you share some crucial information.

Always avoid purchasing cryptocurrencies at the peak of the market bubble. Many of us purchase cryptocurrencies at their peak in the hope of making quick money, but instead fall for the bubble’s hype and lose their money. Before making an investment, users should conduct extensive research. Investing in multiple cryptocurrencies is always a good idea rather than just one because it has been observed that some cryptocurrencies grow more and others averagely do when other cryptocurrencies fall out of favor.

Cryptocurrencies to Focus

In 2014, Bitcoin holds 90% of the market share, with the remaining 10% going to other cryptocurrencies. Despite a sharp decline in market share from 90% to 38% in 2017, Bitcoin continues to rule the cryptocurrency market. Instead, altcoins like Litecoin, Ethereum, and Ripple have grown quickly and seized the majority of the market.

While Bitcoin continues to rule the cryptocurrency market, there are other cryptocurrencies that you should take into account before making a cryptocurrency investment. Some of the major cryptocurrencies you must consider:

Bitcoin

Litecoin

Ripple

Ethereum

Tron

Civic

Golem

Monero

Where and how can I purchase cryptocurrency?

While purchasing cryptocurrencies was difficult a few years ago, users now have access to a wide range of platforms.

In 2015, Unocoin wallet and Zebpay wallet were the two most popular bitcoin platforms in India, where users could buy and sell the cryptocurrency. Users must purchase bitcoin from their wallets alone; they cannot purchase it from a third party. Users had to pay a small fee to complete their transactions because there was a price difference between buying and selling rates.

The cryptocurrency market expanded significantly in 2017, and the price of Bitcoin rose wildly, especially in the final six months of the year, forcing users to look for alternatives. At one point, the price of Bitcoin in India crossed the 14 lakh mark.

With 90% of the market, Unodax and Zebpay were the two biggest platforms in India and they only dealt in Bitcoin. It allows other businesses to develop alongside alternative currencies and even pressured Unocoin and others to expand the number of currencies supported by their platforms.

For its users to trade other cryptocurrencies besides Bitcoin in Unocoin, one of India’s top cryptocurrency and blockchain companies, Unocoin, has created the exclusive platform UnoDAX Exchange. UnoDAX allows users to order any cryptocurrency that is currently available, and if it matches the recipient, the order will be executed. Unocion only offered instant buy and sell of bitcoin.

The major exchanges Koinex, Coinsecure, Bitbns, and WazirX are also available to trade cryptocurrencies in India.

In order to open an account on any exchange, users must sign up with an email address and submit their KYC information. One can begin trading the coins of their choice once their account has been verified.

Before purchasing any coins, users must conduct thorough research to avoid falling victim to the cryptocurrency bubble. Users must investigate the exchange’s credibility, transparency, security measures, and other factors.

On every transaction, exchanges impose a small fee. Maker fee and Taker fee are the two different types of fees. If you want to transfer your cryptocurrencies to another exchange or your personal wallet, you must also pay the transfer fee in addition to the transaction fee. Because each exchange has a different price module for transferring coins, the fees solely depend on the coins and exchange.

Major Altcoins other than Bitcoin

As was already stated, Bitcoin currently holds a 38% market share, followed by Ripple, Ethereum, Litecoin, and Bitcoin Cash. Many other coins, including Golem, Civic, Raiden Network, Kyber Network, Basic Attention, 0X, Augur, Monero, Tron, and many more, are listed on exchanges like UnoDAX, Bitfinex, Kraken, and Bitstamp. You must purchase a coin if it fits your portfolio.

However, you should only invest money that you can afford to lose in the market because there is no government that has any control over the cryptocurrency market, which is very unpredictable.

When to Buy?

When to purchase your preferred cryptocurrency doesn’t have any hard rules. However, market stability must be investigated. When the price of cryptocurrencies is constantly falling or at the height of a bubble, you shouldn’t buy any. The price should always be stable and have been at a low level for a while to qualify as the best time.

Cryptocurrencies Storage Method

Before purchasing any cryptocurrency, one must be aware of the best practices for keeping it secure.

In general, all exchanges offer a storage facility where you can keep your coins safely. If you hold cryptocurrencies on exchanges, you shouldn’t divulge your user information, password, or 2FA.

Among the options for storing cryptocurrency are paper wallets, hardware wallets, and software wallets.

Paper Wallet: A paper wallet is a form of offline, secure cryptocurrency storage. Your private and public keys are printed on a piece of paper along with a QR code. For upcoming transactions, one simply needs to scan the QR code. There’s no need to be concerned about your account being hacked or being attacked by any harmful malware, which is why it’s safe. You simply need to keep your piece of the paper secure in a locker and, if at all possible, keep two to three pieces of the paper wallet under your complete control.

A physical device called a “hardware wallet” is where you store your cryptocurrency. Although there are numerous types of hardware wallets, USB hardware wallets are the most popular. Simply keep in mind that if you store your cryptocurrency in a hardware wallet, you should never lose the wallet itself because once it is gone, there is no way to get your cryptocurrency back.

One well-known incident involved a person who mined over 7000 bitcoins, stored them in a hardware wallet, and kept them with another hardware wallet. He accidentally damaged the hardware wallet in which he stored his cryptocurrency one day, losing all of his bitcoin in the process.

What can be purchased in India with cryptocurrencies?

Most people believe that buying and selling cryptocurrencies are only done to make investments and profit from high returns over both the long and short term. Influencers and bitcoin investors are of the opinion that Bitcoin will replace all fiat currencies and become a universally recognized form of payment in the upcoming years.

One of the biggest online retailers, Dell, now accepts bitcoin. Other instances include Expedia and UNICEF.

The Unocoin merchant service was being used by the Sapna Book Mall in India to accept bitcoin payments. People were using BookMyShow to purchase movie tickets and the Unocoin platform to recharge their mobile devices. The service has reportedly been discontinued, but they intend to resume it soon.

Conclusion:

In the past, cryptocurrency has provided better returns than real estate, gold, stock markets, etc. It is one of the investment sectors that is expanding. You can invest in cryptocurrencies and hold them for a long time to earn nice returns, or you can sell them quickly to make a quick profit because many coins have seen growth of more than 100% in the past. Due to the erratic nature of the cryptocurrency market and the lack of governmental regulation, Any cryptocurrency that one can afford to lose money on must be invested with that amount.

If you don’t want to keep it on the exchange where you are trading, you can store your cryptocurrency in a hardware wallet, a paper wallet, or a software wallet.