10 Important Things You Should Know About Cryptocurrency Before Diving In
Cryptocurrency is a digital asset that is used as a form of exchange to purchase goods and services. Bitcoin which is quite popular is a type of cryptocurrency.
The underlying technology that powers cryptocurrency is called Blockchain.
Simply put, Blockchain is a decentralized technology that manages and records transactions.
This article talks about 10 things you should know if you want to go into cryptocurrency.
It is not insured
You take responsibility for any losses if you invest in cryptocurrency. There is no insurance to cover losses.
Ensure your risk appetite is high before investing in crypto.
When should you buy it?
There is no perfect time to buy cryptocurrency.
It is a very volatile currency, it rises and falls sharply within a short period of time.
Do proper research before you begin to invest.
Don’t trade over the public internet
If you are connected to the public internet, you should never carry out financial transactions.
The fact that the internet is accessible to the public means it is not secured and it is easy for attackers to intercept traffic and have access to sensitive information like your card details or pin.
How many types of cryptocurrencies are currently available?
Presently, there are approximately 2,957 cryptocurrencies available. But Bitcoin remains the most popular of them all.
Other common ones are Ethereum and Litecoin.
Transactions are not reversible
Once you’ve made a transaction involving cryptocurrency, you cannot reverse it.
It’s different from other financial transactions that can be reverted in case of any error.
You should double-check your transaction before you authorize it.
Is the risk low?
The volatility makes investments in cryptocurrency a high-risk investment.
If you have a low-risk appetite, you should consider other investment options. Crypto is likely not for you.
How is cryptocurrency stored?
The method of storage employed for the cryptocurrency is called a Digital Wallet.
This wallet can be stored offline or online.
The wallet allows you to send, receive and trade your cryptocurrency. It is secured with a PIN or Token.
Is your cryptocurrency secured?
The safest way to keep cryptocurrency is in an offline wallet. This makes it less prone to cyber-attacks.
However, you still need to go online for you to trade the funds.
When choosing a crypto exchange platform, security is something to look out for.
What determines the price of cryptocurrency?
Cryptocurrencies are not controlled by any regulatory body. This means that the price is determined by its users.
They can drive it up or down. The price goes up if a big crypto exchange adopts a cryptocurrency and the price would also diminish if big crypto leaves a cryptocurrency
How to invest in cryptocurrency
There are various exchange platforms you can use to invest in crypto. What should influence your choice is the security they offer.
Is your crypto secure in the digital wallet they provide? Also, consider how much they charge for each transaction, this varies across platforms.
When you’ve decided which platform to use and it’s a good time to invest, register and set up your account.
You can buy cryptocurrency in your local currency using your bank account or credit card.
This technology is relatively new to some while others have made quite a lot of money from it.
However, it is not too late to join the train. This is a technology that has come to stay and the future looks bright. We don’t offer any investment advice.
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