In recent events, cryptocurrency has taken the markets by storm. Even if you don’t entirely know or understand what cryptocurrencies are, it’s very likely that you’ve heard it mentioned on the news or online. In a world that’s rapidly becoming more and more digitized, it seems to make sense that a digital currency would also rise in popularity.
The big question everyone has on their minds now is: should I invest too? Everyone else is doing it, so why shouldn’t I?
While it may be tempting to jump into the world of cryptocurrency, it’s important to realize that it’s not for everyone, at least not at the moment. Before you dump all of your money into this world, take time to consider a few things to know if it’s right for you.
What is Cryptocurrency?
Before you can understand whether or not you should invest in it, you need to know what cryptocurrency is. If you’re unfamiliar with the term “cryptocurrency,” maybe you’ve heard of names like bitcoin, ethereum or ZCash. There are tons of types of cryptocurrencies on the market, but they generally all function in similar ways. Cryptocurrency is a digital currency used in encrypted transactions, free of any centralized bank and the regulations that accompany centralized banks. While cryptocurrency has the reputation of being used to purchase illegal or deviant items from the “Dark Web,” it has many practical uses in today’s market. A growing number of online stores and services now accept bitcoin and its competitors to purchase their goods.
Who is Investing in Cryptocurrency Now?
Many cryptocurrency investors are Millennials and those involved in the tech industry. You are more likely to gain from your investment if you have prior knowledge in tech and economics. If you don’t already have a background in these fields, it’s recommended to study up before investing so you don’t get in over your head.
It’s important to note that right now, cryptocurrency is not cheap. So it’s difficult to make a small investment in this field. Be prepared to invest a large sum of money if you plan on entering the cryptocurrency market.
Why Invest in Cryptocurrency?
You may be thinking: What’s the point of all of this? Why invest in cryptocurrency instead of, say, real estate? Or the stock market? Interestingly enough, there are actually several benefits as to why an investment in cryptocurrency will benefit you in the long run. First, cryptocurrencies have low inflation rates. Without government regulations, cryptocurrency doesn’t rely on specific policies made by governments that could cause hyperinflation or other issues.
Cryptocurrencies are also fairly simple to use in transactions, as well as cheap. It is good for purchasing goods internationally, because the worth of cryptocurrency does not change around the world. Cryptocurrency is also extremely transportable. Since everything is digital, exchanging large sums of funds is quick and easy.
How Do You Invest in Cryptocurrency?
Once you get the hang of it, purchasing cryptocurrency is fairly easy. For example, check out a great piece on how to buy Ethereum in Australia, which breaks the process down into four simple steps.
While every cryptocurrency is purchased slightly differently, the overall process contains similar steps. To purchase cryptocurrency, you’ll need a few tools. Of course, you’ll need a computer, an Internet connection and money to invest in the cryptocurrency. You’ll also need to sign up for a cryptocurrency trading sight and connect your bank account to this site. Once you’re set up online, you can purchase cryptocurrency. It’s recommend to store it in a hardware wallet if you plan on keeping it for a while, so that you don’t lose track of it.
In Conclusion
Now that you know more about cryptocurrencies, hopefully you have a clearer idea of whether or not you’d want to invest in them. If you have the money, knowledge and desire to invest, you may want to consider taking a chance and going for it. Otherwise, hold off until you’re ready. Enjoy your journey into this new frontier!
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This is a good article, but I do have one big nitpick.
The author states, “its difficult to make a small investment in this field.” That simply isn’t true. Cryptocurrencies are divisible; you can purchase fractional amounts just as easy as whole coins. For example, Bitcoin is divisible to 8 decimal places.
Despite my nitpick, thanks for the article. It’s good to see someone on this site who isn’t against any and all investment into crypto!
Wait … who ever could you be referring to, Carrie? ahahahaha
As tempting as it is, I came to the conclusion that I probably don’t need to be investing in Cryptocurrencies. I’ve been following bitcoin since it was at $150 a few years ago and thought it was overpriced then. Sure I’m kicking myself a bit but I’m only interested where I think an asset is heading instead of where it’s been. I think at this point in time crypto currencies are too popular and are all hype right now. We’ll see – I’ve been wrong in the past but I think I’ll sit this one out.
I’m with you, Ben.
Me, too.
I was planning on buying a few Bitcoins when they were about $150 a piece.
In the end I didn’t. But my plan would have been to hold them until I could sell them for massive gains. Which is one of the problems with Bitcoin developing into a usable currency.
If people hoard it, then it’s of little use in that respect.
(Hindsight is wonderful though: HAD I bought, it would have been through the MTGox exchange. So, I might have lost them anyway. Who knows?)