We have all heard the terms, Bitcoin and Crypto currency thrown around and how it has made a heap of people rich. Now you kicking yourself for not getting into it earlier. But, you shouldnt be too hard on yourself. Most people had the same scepticism and question whether it is worth getting into and weher it will atually eventuate into something more mainstream. Also, investing in something new can be a hard decision, especially when you’re dealing with money you’ve saved up or earned from previous investments. So, Is cryptocurrency a good investment? In this article, we will attempt to break down cryptocurrency in simple to understand language so you can make an informed decision whether or to invest or not to inves\.
So what is Bitcoin and Cryptocurrency?
Cryptocurrency is formed from two words – “crypto” which defines the encryption of data and “currency” and we all know this defines as money or medium of exchange. If we put them together, a cryptocurrency is a medium of exchange (like ordinary money) that exists in the digital world and uses encryption that ensures the security of transactions.
So when you want to buy something normally using your bankcard, you give your card details to the shop, and the shop then asks the bank if you are good for the money. The bank checks its records to make sure there are sufficient funds in the account and then approves the transaction and updates its records.
What if you want to remove the bank from that system? Who else could you trust to keep your money and these transaction records?
Cryptocurrency solves some of the pitfalls that come with traditional currency. For example, there are no banks, brokers, or middlemen that will slow down the processes and take their cut. Bitcoin also provides “banking” to those without access to a formal bank. In short, cryptocurrency is attempting to get rid of the bank manager reviewing your credit score and employment history.
Cryptocurrency is an alternative form of payment in cash and credit cards. The digital currency works on the concept of cryptography, where each token is created by a code with the help of data that is stored in blocks linked to each other. This system is known as blockchain technology.
For a great explanation on Blockchain and Bitcoin Visit – https://theprodigious.com/bitcoin-explained/
This article gives a very good explanation on the concept of Crypto currency and how it works.
How To Get Started With Cryptocurrency?
Getting started with cryptocurrency is easier than you think! Make sure you do your reasearch first so you are confident in making the right deisions. There are countless resources online like crypto discord groups where people discuss everything about cryptocurrencies. You can also join local meetups or attend events hosted by different companies which will help broaden your knowledge.
Just like trading in the share market, to buy and sell cryptocurrency, you will need to use an exchange. Most of these are free but some do charge a fee.Popular exchanges include:
Should I Invest in Bitcoin?
Now to the big question. Is cryptocurrency a good investment? Should I invest in Bitcoin or any other crytocurrency. Lets face it, it is a risk but a worth while risk if you have some spare cash lying around. Investing in cryptocurrency has always been volatile. Bitcoin experienced a wild ride over the last few months. After shattering records and reaching staggeringly high prices, cryptocurrencies has alsoseen to loose 30 – 50% in he blink of an eye. Before you invest in cryptocurrency, think about whether you can tolerate this level of risk. Although Bitcoin has always managed to bounce back from its slumps, there’s no guarantee it will always recover. If ou decide to invest, only invest what you can afford, and never panic. Just ride it out and have faith that when there are lows there can be highs as well.
If buying cryptocurrency seems too risky, you can consider other ways to potentially profit from the rise of cryptocurrencies. You can buy the stocks of companies such as Coinbase, Square, and PayPal or invest in an exchange like CME Group (NASDAQ:CME), which facilitates crypto futures trading. While investments in these companies may be profitable, they do not have the same upside potential as investing in cryptocurrency directly.
If you know you’re going to start stressing everytime your investments plummet overnight, crypto is probably not be the best investment for you. But if you have the patience, appetite and quite frankly the bankroll for this wild ride of an investment, cryptocurrency might be worth getting into.