Cryptocurrency will turn 10 years old in 2019! The amazing part of this journey of 10 years is that for the first five years of the existence of this concept of 'digital money', there were actually very few takers to the concept. Those who did believe in the concept were programmers or people with technical expertise in software and mathematics both. These people approached cryptocurrency more like a challenge to solve problems or crack codes for a reward that could be traded. The trading came soon after and high returns piqued the interest of all others too. Bitcoin doubler x2
Post 2013, the value of cryptocurrency has been on an upswing with as much as a surge of over 900% in the year 2017. Cryptocurrency is surely looking stable and an extremely lucrative investment option. However, while taking the first steps in the world of cryptocurrencies, you must first do your research and understand the mechanisms associated with the investments. Here is a step by step guide that will take you through the process:
Step 1: Understand the aspects of cryptocurrency world
Conceptually, cryptocurrency is not a subject that is taught in any of the management institutes or financial courses. The knowledge of this subject can be gathered mostly from the internet or from existing investors. The main terms to understand here are cryptocurrency, blockchain and Bitcoin network. Simply put, cryptocurrency is a peer-to-peer electronic cash transmission method which only works within its network and not through a centralized node.
Blockchain is a kind of an electronic public ledger which records the Bitcoin transactions between participating nodes and adds it to its chain, thereby keeping the system extremely transparent. These blockchains later also lead to creation of new blocks for the purpose of mining cryptocurrency.
Bitcoin network is simply nodes or computers which are transacting on the network.
Step 2: Understand the uses and advantages of cryptocurrency
Cryptocurrencies are a novel concept and hence although the uses are many, all may not be extremely popular. The uses of cryptocurrency can broadly be classified for:
• Purpose of purchasing: This is the most basic form in which any currency can be used. Mobile wallets are already extremely popular where the wallets have become digital. This is a step ahead with the wallet and the currency both being digital. Purchasing through your digital currency can be done for a number of commodities like computers, grocery and even some food and retail outlets. All you need to check is whether or not they accept this method of payment.
• Purpose of investment: This is emerging as the biggest use of the cryptocoin. The Bitcoin ticker symbol is BTC or XBT and you can trade it similar to the way Fiat currency is traded in the market. The difference between this investment and any other is that the mechanism of investment is just like investing in stocks, but stocks are dependent on parameters like growth of the company, turnover etc while the cryptocoins growth is dependent on only demand and supply.
• Purpose of travel and stay bookings: Many online travel and stay operators have started accepting cryptocoins and this is extending to the real estate market too.
The two biggest advantages of cryptocurrency are that these are decentralized and transactions are cheap and fast. These are strength areas that will stand apart in the future and cannot be ignored.
Step 3: Compute the surplus money that you can invest
Once you are convinced of the benefits of the investment in the cryptocurrency network, you need to work out the surplus amount that you would want to invest. Wisdom says that you must start modest and check the returns for a period of at least six months before you invest a huge amount. This is a high risk investment but the returns are also disproportionately high as compared to other investment tools.
Step 4: Register on a network and get yourself a wallet
This is an important step. You need to ascertain the best cryptocurrency exchange or wallet for your needs. For the registration process, all you will need to do is buy cryptocoins from an online provider. One such reliable service provider is Indus Coin. Here, you can buy your cryptocoins and keep them safe in your wallet. The wallet has special safety features built in which provides you access to your past transactions and account balance but will generate and ask for a new password every time you wish to transact. This keeps your wallet safe from wallet-stealing viruses and Trojans.
The basic view of your cryptocurrency wallet can also be downloaded on your phone as an app so that you remain connected on the go.
Step 5: Keep tracking your investment
As easy as the process sounds, it requires caution too. This is not the kind of investment where you can invest your money and then forget about it for some years. The markets of cryptocurrencies have been really volatile and fluctuations are many. The fact that this is only determined through demand-supply mechanism means that even a small hitch can impact your investment. Decentralization gives it immunity from inflation but keeps it exposed to Government regulations that may sometimes not be favorable. So, you need to be aware of these scenarios and use your investor sense to manage this money.
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