How to start with cryptocurrencies?
A beginner should know:
There are several ways to keep cryptocurrencies safe. Here are some of the most common methods:
Hardware wallets: Hardware wallets are physical devices specifically designed for the secure storage of cryptocurrencies. They are usually protected with a PIN or password and provide a high level of security against hacking.
Paper wallets: Paper wallets are physical documents with your cryptocurrency address and private key printed on them. They can be printed out and stored in a safe place.
Software wallets (also hot wallet): Software wallets are digital wallets that can be installed on your computer or smartphone. They provide a convenient way to access your cryptocurrencies, but are more vulnerable to hacking than hardware wallets.
Cold Wallet (Cold Storage): Cold storage refers to storing cryptocurrencies offline to protect them from hacking. This can be achieved by using hardware wallets or paper wallets.
It is important to note that keeping cryptocurrencies safe is crucial, as cryptocurrencies are not controlled by a central authority and there is no way to recover lost or stolen cryptocurrencies. It is also important to make regular backups of your wallets and ensure that you never share your private keys with third parties.
How to keep cryptocurrencies safe?
DYOR
Do your own research
As an owl, I can't give financial advice and it's important that you do your own research before investing in a cryptocurrency. However, there are some important factors you should consider before making a decision:
Market capitalization: Market capitalization indicates how much money has been invested in a cryptocurrency. The higher the market cap, the more stable the currency usually is.
Technology: The technology behind a cryptocurrency is an important factor. You should take a close look at how the technology works and how it is used.
Team: The team behind a cryptocurrency is also important. You should look at the experience and expertise of the developers and management.
Acceptance: The acceptance of a cryptocurrency is an important factor. The more companies and traders accept the currency, the more likely it is to increase in value in the future.
Some of the most popular cryptocurrencies are Bitcoin, Ethereum, Ripple, Litecoin, and Bitcoin Cash. However, it is important that you do your own research and learn about the different options before making a decision.
Where to buy cryptocurrencies?
1. Cryptocurrency Exchanges
A cryptocurrency exchange is a platform where you can buy and sell cryptocurrencies. Some of the most popular cryptocurrency exchanges are Coinbase, Binance, and Kraken.
There are even exchanges in countries like Northern Cyprus that allow FIAT/Crypto and Crypto/FIAT exchanges for a certain fee and without ID verification (KYC). Trading on these exchanges is exclusively physical.
Those who want to invest in cryptocurrencies can exchange FIAT money like Dollars, Euros, Yen and Pounds for Bitcoin or Altcoins on Exchanges (currency exchanges) and PayPal.
You should make sure that the exchange you sign up for has listed the cryptocurrency you want to buy, i.e. makes it available. Due to the variety of different blockchains, not all coins or tokens can be purchased even on the largest exchanges.
2. Peer-to-peer marketplaces:
Peer-to-peer marketplaces such as LocalBitcoins allow you to trade directly with others without using an exchange.
There are several ways to buy cryptocurrencies. Here are some of the most common methods:
3. Cryptocurrency ATMs:
Cryptocurrency ATMs are physical machines where you can buy cryptocurrencies. However, they are not as widespread as traditional ATMs.
4. Cryptocurrency Funds:
Cryptocurrency funds are mutual funds that invest in cryptocurrencies. You can buy shares in these funds to invest indirectly in cryptocurrencies.
5. Directly buying from people:
You can also buy cryptocurrencies directly from another person by paying them with cash or another payment method.
It is important to note that buying cryptocurrencies comes with risks and you should thoroughly research the cryptocurrency and the platform you want to buy it on before making a purchase.
How to understand Coinmarketcap?
CoinMarketCap is one of the most popular cryptocurrency data websites and offers a wealth of information about various cryptocurrencies. Here are some steps you can take to read CoinMarketCap:
Search for a specific cryptocurrency: type the name of the cryptocurrency in the search box to get information about it. You can also enter the abbreviation of the cryptocurrency to get the information faster.
Check the price: check the current price of the cryptocurrency and see how it has evolved over time. You can also view the price in different currencies to see how it behaves in different markets.
Check the market capitalization: check the cryptocurrency's market capitalization and see how it compares to other cryptocurrencies. A higher market cap may indicate that the cryptocurrency is more popular and successful.
Check the trading volume: check the trading volume of the cryptocurrency and see how active the trading of it is. A higher trading volume may indicate that the cryptocurrency is more popular and liquid.
Check the price charts: Check the cryptocurrency price charts and see how the price has evolved over time. You can select different time periods to take a closer look at the price trend.
Review the cryptocurrency information: review the cryptocurrency information, including the whitepaper, team, and roadmap. You can also see which exchanges trade the cryptocurrency and which wallets support it.
It is important to use a combination of these steps to make a comprehensive assessment of a cryptocurrency. It is also important to look for risks and potential issues that could affect the project.
The profit opportunities with cryptocurrencies can be very different and depend on various factors. Here are some of the ways to make profits with cryptocurrencies:
Trading: one way to make money with cryptocurrencies is to trade on cryptocurrency exchanges. Here, you can buy and sell cryptocurrencies to profit from price fluctuations. However, trading cryptocurrencies is very volatile and can involve high risks.
Mining: another way to earn money with cryptocurrencies is mining. This involves creating new cryptocurrencies by verifying transactions and adding new blocks to the blockchain. However, mining requires special hardware and a lot of electricity, which can come at a high cost.
Staking: some cryptocurrencies offer the option of staking, where you hold cryptocurrencies in a wallet and are rewarded for supporting the network. This can be a way to earn passive income.
ICOs: Initial Coin Offerings (ICOs) are a way to invest in new cryptocurrencies before they hit the market. However, ICOs come with high risks and there are many scams.
Long-term investments: Another way to make money with cryptocurrencies is to make a long-term investment. In this, you buy cryptocurrencies and hold them for a long period of time, hoping that their value will increase.
It is important to note that cryptocurrencies are highly volatile and can be associated with high risks. Before investing in cryptocurrencies, do thorough research and consider your risk tolerance.
Profit opportunities with cryptocurrencies
Most common investment strategies
There are several investment strategies that can be pursued with cryptocurrencies. Here are some of the most common strategies:
Buy and hold: this strategy involves buying cryptocurrencies and holding them for a longer period of time. The goal is to profit from a long-term rise in cryptocurrency value.
Dollar-cost averaging: This strategy involves buying a certain amount of cryptocurrencies on a regular basis, regardless of the current price. This reduces the risk of buying at an inopportune time.
Trading: this strategy involves buying and selling cryptocurrencies on a short-term basis to profit from price fluctuations. However, it requires a high level of experience and knowledge about the market.
Diversification: this strategy involves spreading the investment portfolio across different cryptocurrencies to minimize the risk. This reduces the risk of being affected by a decline in the value of a particular cryptocurrency.
ICO investments: This strategy involves investing in new cryptocurrencies before they hit the market. However, it comes with high risks as many ICOs are scams.
It is important to note that any strategy comes with risks and there is no guarantee of profits. Before investing in cryptocurrencies, you should do thorough research and consider your risk tolerance.
