Investing in cryptocurrency is quickly becoming a viable alternative to more traditional, physical assets. As the internet overtakes older forms of communication, it ushers in innovative forms of money transaction. Crypto-blockchain technology is toward the top of the list.
However, for all of its convenience and popularity, it is a market steeped in mystery. If a layperson were to inquire, what exactly is cryptocurrency?
What is a digital asset?
“It is a digital asset. Digital money,” Lakshika Kothari of Dfyn Network tells SheThePeople in an interview.“Understand it as a decentralised, open system that is high in transparency. There is little to no counterfeiting here and you can track your money.”
Crypto is a sort of digital currency that records wealth ownership in a computerised database. Money is only available electronically, not on paper. Cryptocurrencies, like paper money, work in currencies; consider Bitcoin, Ether, Tether, and Cardano.
A crypto boom, if you will, has occurred in the last year, owing in great part to the widespread engagement of women in trading and investing. According to data, the number of women investing in cryptocurrency has surged by 1400 percent in India alone. Is this a foreshadowing of better times to come as a result of more financial independence?
Hopefully. Crypto founders have noted a turning of the space in recent times, where younger women users have been described as more “bullish” and generous with investments than men. They have shown “great potential in leading this industry forward,” Shivam Thakral, CEO BuyUcoin, has said to the press.
Is there a new spotlight?
It appears to be a huge up-and-coming field to investigate (although with a lot of regulatory issues still to be resolved), and there is a noticeable increase in interest in investing in bitcoin. Experts feel that it is a long-term exchange mechanism. So, if you’re seeking for some pointers on how to get started, keep the following in mind.
Beginner’s Guide To Investing In Cryptocurrency:
- Transfers and exchanges that are made quickly
The lack of intermediaries transmitting your money from one address to another is cryptocurrency’s USP. The procedure is entirely peer-to-peer, with no central banks or administrators involved. Money is linked to addresses rather than people, so the user remains anonymous.
In bitcoin, however, transaction fees are subtracted based on the exchange amount and market congestion.
- What is your ‘risk appetite’?
Knowledge of this, according to Kothari, is essential for investing in the crypto industry. The fail-safe margin is usually 10% of one’s net worth. “Even if you lose your investment, most individuals will be ok. Because cryptocurrency is such a new market, it is bound to fluctuate. Coding is constantly evolving. “Asset values can rise or fall,” she explains.
How much one should invest in crypto should be a balance of how much one is willing to lose and earn at the same time.
- Keep your cash safe in a wallet.
It’s ideal to store your crypto money in a digital wallet, just like you would physical coins or cash. Though it is generally a secure system, placing it out in the open could tempt hackers. Keep track of where your crypto “keys” are in a ledger device (hardware wallet). This ledger acts as a wallet for your digital currency. As a result, if you lose your wallet, you also lose your money.
Keeping this ledger in a bank locker or safety deposit box is an excellent idea for optimal security. Apps for crypto wallets are also popular.
- Invest wisely and carefully.
People joining the blockchain-crypto arena, according to Jincy Samuel, co-founder of Coinsecure, should be aware of its volatility. With crypto, she said “it is important not to put all your eggs into one basket. Spread them out wisely.”
Taking inspiration from experienced traders is a wonderful concept for newbies. Helose Greeff, a UK-based eToro trader, says she wants to avoid high-risk investments and instead trusts in more long-term technology. “I tend to have moderate returns and just keep compounding that over time,” she told Insider.
- Research, research, research
Kothari said she read a number of whitepapers on the issue before starting to invest in bitcoin to gain a better understanding of what she was getting herself into.
Due to their blockchain technology and dependable reputation, Bitcoin and Ethereum remain top alternatives for crypto investors, especially newcomers, all over the world. According to Kothari, these are not businesses, hence there is no cash flow linked with them. “People have faith in them and have invested money in them.”
Bitcoin will be the most popular cryptocurrency in 2021.
Source: shethepeople