Should I invest in cryptocurrency? Maybe Yes but considering the risks, you may feel it’s not worth the time? Well, the unpredictability and lack of understanding about the different types of cryptocurrencies often confuses beginners like you.
But once you understand all the basics, best cryptocurrency to invest in, pros and cons you’d be able to reap the huge profits it offers.
We are at your help. Check out our guide to investing in cryptocurrency and you’ll get all your answers.
What is Cryptocurrency?
You must have heard the names bitcoin and meme-worthy ‘dogecoin’ but there are many more on the list. All these different types of cryptocurrencies are created using a secure technology called cryptography where the various cryptocurrencies are distributed across the wide decentralized network.
Going with a non-technical definition, it is basically a form of token issued for online transactions in exchange for goods and services.
How Do They Work and Is Cryptocurrency Safe?
These are probably the few questions that come to everyone’s mind before investing in cryptocurrency. Check out this graphical representation to learn its working process.
But, Is it safe? The new digital currency is absolutely safe as very secure blockchain technology is used to make the transactions of users safe.
The entire transaction is encrypted and all the details are stored on a decentralized network. However, the transaction amount is public but the name of the sender and receiver is kept private. This makes it safe but there’s a catch as these are not managed by any governmental authority.
Pros and Cons Of Investing In Cryptocurrency
1. Transparent- The transparency that comes with crypto is something that has made it a trending investment. All the transactions are verified and protected from the reach of hackers.
2. 24×7 Accessible– Access and invest anytime and anywhere as all it needs is a mobile and internet connection. Of course, a crypto wallet as well where all the digital currencies are stored. You can make it more secure by using the best crypto wallet 2021.
3. Huge Growth Potential- Though the bitcoin price range changes every second, the profit potentials are worthy of appreciation. However, investors have to keep a check on the bitcoin price index and other crypto prediction websites for the latest updates.
4. Market Fluctuations– If you are unfamiliar with the trend of the stock market, understanding cryptocurrencies would be even more difficult for you. It is because crypto is subject to price change so there’s always a risk of losing the money. Crypto prediction websites will keep you up-to-date about those fluctuations.
5. Non-retrievable– Once a loss is forever a loss in the case of investing in cryptocurrency due to the absence of centralized authority. So keep your private access key safe and secure or else you’ll lose all the money in your crypto wallet.
4 Things To Know Before Investing In Cryptocurrency
Till now we have talked only about WHAT and HOW but knowing the answer of WHY will get you the answer of Should I invest in cryptocurrency? You might be investing due to the growing culture of cryptocurrency or amused by its potential to double your money. Whatsoever is the reason, understand these few things as they can make investment-worthy and protect you from loss to a certain extent.
1. Right Time
There’s no right time and no best cryptocurrency to invest in. The best example is the speech of Elon Musk that can create huge fluctuations in the dogecoin price within seconds. However, experts suggest that those opting for long-term benefits should consider making such investments.
There’s more to learn about the right timing, check out this video by the co-founder of ACE-X, Atul Chatur for better understanding:
2. White Paper
Every crypto project comes with a white paper that gives a detailed insight into it. Make sure you go through it completely before trying your luck.
3. Crypto Community
Join Reddit for learning more about this digital currency space. You’ll understand which is best, bitcoin, dogecoin, or any other digital currency.
4. Check Legitimacy
Do not invest in a newborn project as there’s not much information available about it thus risk is more. Also, beware of fraudsters and hackers.
Know The Best Cryptocurrency To Invest In
Understanding the market valuation strategy is the key. As of now, the top cryptocurrencies for Indian investors in 2021 are:
- Bitcoin (BTC)
- COSMOS (ATOM)
- BINANCE COIN (BNB)
- Zcash (ZEC)