Cryptocurrencies have become widespread and no longer only consist of a fringe community that is idealistic. Today, cryptocurrencies such as Bitcoin and Litecoin are worth billions of real dollars. Understanding the basics of cryptocurrency is essential whether you have an interest in investing your money or if you are thinking of mining alternative cryptocurrencies. Use this beginners guide to cryptocurrency before choosing the cryptocurrency that is right for you.

What is Cryptocurrency?

Cryptocurrencies are a new form of digital currency that is gaining popularity with the advent of Bitcoin. Traditional currencies are known as fiat currencies and are stored in banking institutions that are valued based on current economies and investments. Cryptocurrencies provide an alternative solution to fiat currencies with the use of blockchain. Purchasing, investing in, and mining cryptocurrencies can all be done using online marketplaces and virtual wallets.

What is Blockchain and What are the Benefits of Using Blockchain?

Blockchain is the method in which cryptocurrencies are managed and tracked. With traditional fiat currencies, transferring money can become increasingly difficult to track, leading to fraud and tax evasion along with white collared crimes. Using blockchain provides a much more secure method of transferring and managing funds without the risk of losing your cryptocurrency. With the blockchain method, easily keep track of where your money is at all times without the risk of traditional fiat currencies.

How Does Cryptocurrency Increase in Value?

The value of each individual cryptocurrency is based on the amount of fiat currency invested in the alternate coin. When there is more commitment to a currency, its value rises globally. As individuals continue to invest in cryptocurrency, it becomes more valuable in the real world. Traditional companies such as Overstock, Newegg, and even Subway (in some locations) are allowing Bitcoin as a valid form of currency to pay for goods and services. As the rise of cryptocurrency continues, more businesses and brands are likely to follow suit.

Obtaining a Virtual Wallet

Virtual wallets are essential for anyone interested in investing in cryptocurrency. A virtual wallet is similar to an online banking system, only providing you with more freedom and flexibility while managing your funds. Virtual wallets are available with online exchanges such as CoinBase in addition to independent applications and software downloads. Before choosing a downloadable virtual wallet that is right for you, research reviews to avoid scams or vulnerabilities once you begin investing real money into the coin of your choice.

Marketplaces

There are various cryptocurrency marketplaces to choose from once you begin your journey into the cryptocurrency industry. The largest and more secure marketplace to purchase cryptocurrency from currently is CoinBase. Once you register as a member of CoinBase, obtain your virtual wallet by downloading it to your desktop or by opting for a smartphone app that is compatible with your phone.

CoinBase provides real-time updates of the current value of the most popular cryptocurrencies available. Some of the top performing cryptocurrencies include Bitcoin, Litecoin, and Ethereum. Currently, the total value of the crypto market is approximately $30 billion USD, making it extremely appealing to investors and individuals who are heavily dedicated to tracking the finance industry.

Once you are ready to invest in the cryptocurrency coin that is right for you using CoinBase, there are only a few steps necessary to get started:

  1. Log in to your official CoinBase account
  2. Verify your virtual wallet is valid and in working order
  3. Select the “Buy/Sell” bitcoin tab
  4. Choose the payment method that is right for you
  5. Enter in the amount of Bitcoin you wish to purchase
  6. Select “Buy Bitcoin” or “Buy Bitcoin Immediately”
  7. Instantly receive Bitcoin in your virtual wallet

Purchasing Bitcoin directly also offers advantages if you are thinking of investing in different altcoins on the market. Once you have Bitcoin available in your virtual wallet, it is much easier to begin trading or exchanging the coin for alternatives. Keeping an eye on the market each day is essential to avoid investing in a coin that is losing value or simply not sustainable long-term.

Additional cryptocurrency exchanges to consider once you become familiar with altcoins includes both Polo and Bittrex. Join communities of cryptocurrency marketplaces to familiarize yourself with the best methods to purchase and invest your fiat currency. Choosing a Cryptocurrency That is Right for You

When Bitcoin first launched, individuals were skeptical of its potential and success. While it was once extremely affordable, one Bitcoin as of late 2018 is worth more than $6,000 USD each. Purchasing an entire Bitcoin may not seem feasible, which is why altcoins have become increasingly popular in the past few years. Use marketplaces such as CoinBase to track the current trends of upcoming and new altcoins such as Litecoin, Ethereum, Dogecoin, and more to determine the best value for your money based on growth and value over set timelines.

Join forums and online cryptocurrency communities to discuss your options and to stay updated with the latest shifts and changes in the marketplace. Monitor your virtual wallet after you have invested real fiat currency to ensure its security and to steer clear of potential hacks and vulnerabilities. Receive Google Alerts on your phone and in your inbox to monitor hacking attempts and security breaches that are most commonly associated with cryptocurrencies.

Minimize Your Risk

Before choosing to invest in cryptocurrency it is imperative to understand the risks and potential rewards. While it is tempting to invest a large amount of real money, it is important to remember that cryptocurrencies work similar to traditional stock markets. Cryptocurrencies become devalued and more valuable at faster rates due to the volatile market and new altcoins becoming increasingly available to the everyday individual. Never invest more money than you are willing to risk, especially as the cryptocurrency market continues to evolve and take shape.

After reviewing this beginners guide to cryptocurrency, move forward with your investments feeling comfortable with and confident in your choices. With a complete understanding of top performing cryptocurrencies, virtual wallets, and trading markets, get started in your cryptocurrency venture immediately.

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