First things first: what is cryptocurrency?Cryptocurrency is a digital or virtual currency that uses cryptography to secure transactions and control creation of new units. Cryptocurrencies exist only as data and not as physical objects; you cannot actually hold a cryptocurrency coin in your hand (though there are now physical coins that have been produced). The most famous example of a cryptocurrency is Bitcoin. Other popular types of cryptocurrencies include Ethereum and XRP. The biggest difference between cryptocurrencies and traditional currencies like dollars or euros is that no single entity controls the supply of cryptocurrencies. Instead, each transaction creates new units of that currency at a predetermined rate (often referred to as mining).
BitcoinBitcoin is the most popular cryptocurrency, making up over half of all cryptocurrency market capitalization. It’s also one of the first cryptocurrencies to be introduced. Bitcoin was created by Satoshi Nakamoto in 2009 as a peer-to-peer electronic cash system that eliminates third party involvement between transactions, including banks or governments. The transactions are recorded on a public ledger called a blockchain, which allows users to track their funds easily and safely.
EthereumEthereum is the second most valuable cryptocurrency after Bitcoin. It’s a decentralized platform that runs smart contracts and allows developers to build and deploy decentralized applications. As a result, it has found wide use as a “world computer” that can be used by anyone to run their own programs or apps. Ethereum is not only being traded as an investment vehicle; it’s also being used on its own blockchain for real business use cases through apps like CryptoKitties and Arcade City.
XRP- An investment to considerRipple, originally known as opencoin– created a cryptocurrency in 2012 that was to facilitate international payments. In fact, it’s one of the most popular cryptocurrencies out there. It can be used to send money anywhere in the world in seconds and at no cost. This cryptocurrency is called XRP. However, despite its popularity with investors and traders alike, XRP is still considered an investment risk because there’s no guarantee on its longevity as a currency or commodity. The U.S. securities and exchange commision has alleged that Ripple conducted an illegal securities offering through sales of XRP, Ripple has claimed that XRP should be treated as a virtual currency rather than an investment contract like a stock. It looks promising that they will win the case. Although, it could stretch into 2023!
If you’re looking to invest in cryptocurrency, here’s how to do it:So you want to invest in crypto currency? Well, that’s great! We’re thrilled you’re here. First off, you’ll need to open a cryptocurrency wallet. That’s where you’ll store your crypto coins once you buy them. You can use an app or site like Coinbase or Uphold, or you can use a cold wallet. A cold wallet is an offline wallet where you can store your cryptocurrency, making it completely safe! Setting up your cold storage paper wallet is easy and requires minimal tech knowledge. The most complicated part of setting up a cold wallet is that you need to ensure your paper wallet’s private and public keys have never been on the internet, you’ll need to save the webpage that generates the keys,take your device off of the Internet, open the saved webpage on your desktop, then generate the keys. Once your wallet is set up, it’s time to find some coins to invest in—and this can be tricky because there are so many options out there! Some people like to invest in popular coins like Bitcoin or Ethereum because they’re more stable and have been around for a while. Others prefer smaller projects that have more potential for growth (but also risk). Once you’ve selected your coin(s), go ahead and make an account by clicking on its symbol from the list on the exchange site. Then transfer money from your bank account into this account using wire transfer or other methods offered by the exchange site. When everything looks good, buy all the coins! Remember: when investing in any kind of currency, always do your due diligence before making any purchases!
Don’t put all your eggs in one basketThe first rule of investing is that you shouldn’t invest more than you can afford to lose. With cryptocurrencies, this is especially important because they’re so volatile—they go up and down in value all the time. If the price falls below what you paid for it (and remember, with Bitcoin and Ethereum, it’s not just a matter of losing value but also having your entire investment vanish), then you’ve lost money. So how do you make sure that doesn’t happen? The best way to avoid incurring too much loss is by diversifying your portfolio and spreading out your assets among different types of crypto assets as well as other types of investments like stocks and bonds.
Bitcoin is still the most popular cryptocurrency, but keep your eyes open to other options as well.While it’s true that Bitcoin is still the most popular cryptocurrency, there are plenty of other options to consider. Ethereum and XRP have become increasingly popular in recent years and both offer their own unique benefits. Here are four key reasons why they might be worth your while:
- They’re secure
- They’re liquid
- They have a lot of users
- There are many developers working on them