Tuesday, May 14, 2024

An ultimate beginners guide to cryptocurrency

According to the latest data, as of March 2020, the total market value of bitcoin was $99,257,557,910. As one of the most volatile yet popular global currencies, investing in bitcoin or deciding to buy cryptocurrency for that matter should be strategic and well researched as the value can change with short notice.

However, investing in the right way can be highly rewarding. For first time investors in cryptocurrency, knowing what you’re doing is crucial. Here’s some information to get you started.

What is a cryptocurrency?

A cryptocurrency is a type of digital currency and form of payment than can be used to purchase goods and services online. In addition, it is quite often used for stock market investment, in which real currency will need to first be exchanged in order to get hold of your cryptocurrency.

Some forms of cryptocurrency such as popular bitcoin operate with blockchain technology, which is decentralised across the many computers that manage and record transactions. There are more than 2,200 cryptocurrencies out there in the world as of 2020, meaning that choosing one can be a hard decision. 

How to buy cryptocurrency

To buy cryptocurrency, you will first need to invest in a ‘wallet’, which is an online app that can hold your cryptocurrency. The general process requires that you sign up to an account on an exchange, which then grants you access to trade real money for your chosen cryptocurrency such as bitcoin or ethereum.

A good place to start is to find a site that allows you to create a wallet and both buy and sell cryptocurrency. In addition, some cryptocurrencies require you to purchase them using another form of cryptocurrency such as bitcoin; for this reason, it’s good to do your research thoroughly before deciding on which ones to invest in.

Who accepts cryptocurrency?

According to statistics, 66% of all payments in the UK are now made via contactless payment, meaning that there has never been a better time to invest in a cryptocurrency. What’s more, nearly 5.4 million people never use cash, and by 2028, cash payments are set to account for just 9% of all payments. This indicates that more and more providers are beginning to transition into the digital revolution, creating huge possibilities for those investing in cryptocurrency.

From retail providers to hotels, travel companies and even car parks, more and more places than before are now starting to accept certain types of cryptocurrency.

The pros and cons of cryptocurrency

One of the fall-backs of cryptocurrency is that you need to be in it for the long run as market values can continually fluctuate. In addition, similar to real currency, cryptocurrency does not generate cash flow, meaning that if you want to make a profit then someone needs to pay more for it than you initially did.

Differentially, many people see the value in cryptocurrency due to its decentralisation. With real-life currency that belongs to a bank, it’s value can decrease over time, yet since cryptocurrency is not owned by the bank, it is less likely to lose value.

What’s the future of cryptocurrency looking like?

Whilst the cryptocurrency market is highly volatile, it does show some promising potential and if you do your research, invest correctly and are in it for the long run, then the odds may be in your favour.

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