Unless you have been living under a rock in the last 12 months or so, you likely know about the meteoric rise of cryptocurrency. The market exploded recently and more and more people were getting involved in the space. There are dozens and dozens of coins and tokens you can invest in and blockchain technology has the potential to change many industries.
But if you are just beginning to get interested in the topic, it can be quite intimidating. There are some confusing terms and the technology itself can be tough to get a handle on. In an effort to help you out get started in cryptocurrency, here are a few tips.
The first and most important thing that you should do when getting started with cryptocurrency is to educate yourself. Whenever you are dealing with investments, you need to be sure that you understand all the ins and outs of the industry before putting any money forward. Thankfully, with how quickly cryptocurrency took off, there are a ton of people in the same boat.
As a result, there are plenty of articles and videos online that are good guides to those who are just getting started in the space. Also, there are many great websites and communities (like Trybe) that are great for asking and answering questions and sharing crypto and blockchain knowledge with others.
Watch Out For Cryptocurrency Scams
While there have definitely been some ICOs and platforms that have become incredibly successful and made their investors millions of dollars, there are also many that have been scams. In fact, there are studies that show that 80% of ICOs are scams and very few actually reach exchanges.
While there are no surefire giveaways when trying to identify a scam, there are a few things you can look out for. These include things like something sounding too good to be true, an inactive or tiny social media presence, inexperienced team or no whitepaper. Also, googling the platform with the word “scam” after it can be good, as it will show if anyone else is concerned about the validity of the platform.
Prepare For A Bumpy Ride
Investing in cryptocurrency is inherently different than other standard investments. While a normal invest might be more than .5% or less in a day, a cryptocurrency can sometimes have movements well over 20 times that. As a result, these are very unpredictable investments. Your coin could be trading at $10 one day, $6 the next and then $13 the next.
If you are going to be active in trading crypto, you need to be aware of that. If the big leaps and hard crashes are too much for you to handle, cryptocurrency might not be for you. Of course, there are some cryptocurrencies out there that claim to offer less risk, but that also comes with less reward.
Know What Is Required To Invest
When you invest in a standard investment, all you need is a brokerage account with a bank or other provider, and some money in that account. However, with crypto investing, it is not that easy. There are many things you need to do before you make an investment.
First, you will need an account at a crypto exchange, which can often take a few days or longer to get approved. Next, you will need your own wallet address, so you can send coins from your exchange account to your secure wallet. And finally, if you are going to invest in a smaller coin, you may need a bigger coin (like Bitcoin or Ethereum), as some won’t allow you to invest with fiat currency directly.
If you are interested in even more cryptocurrency-related articles and information from us here at Bit Rebels then we have a lot to choose from.