Lately, there has been a lot of hype created around cryptocurrency, and rightly so. Once known as a haven for money launderers, cryptocurrency has come a long way. This year bitcoin’s market alone capped $1 trillion due to the recent surge in price. Cryptocurrency has seen a rise in value and trade like never before.
With improvement in security and growth in popularity, more people want to start trading with crypto. However, before investing, it is fundamental to understand the nature of cryptocurrency and how you can protect yourself.
What Is Cryptocurrency, And Why Are They So Popular?
Cryptocurrency is a digital form of currency that can be used for transactions. It uses blockchain technology for security that is a decentralized ledger where all transactions are stored.
More than 6,500 cryptocurrency exists as of now with bitcoin topping the market capitalization chart.
The most appealing part of it is the security. Blockchain technology prevents hacking and keeps your coins safe. As a result, more users started to invest after the introduction of blockchain.
Some trade with crypto due to its increase in value and high returns it generates. Over the years, it has gained significant growth. Single bitcoin that valued at 0.8$ in 2010 is now worth $56000.
Crypto removes banks from the equation with its decentralized system. It prevents devaluing of the currency as the money supply is no longer in control of the bank.
Should You Invest In Crypto?
Crypto investments could be a risky business. You can make a high profit from it, but you can also lose all your money. It comes down to the volatility of cryptocurrency.
It is considered as the one for the future. But a currency needs to be stable to be accepted as a form of payment. Forecasting is also difficult work. For example, in 2017, bitcoin was closed at $20,000, and forecast predicted it would come to a swooping low of $3,200.
As of now, coins value is continuing to grow, and experts predict that it may continue to do so over the years. It can prove to be a decent long-term investment or the worst investment you can ever make.
How To Buy Cryptocurrencies?
They are available on any cryptocurrency exchange platform. These exchanges provide users with a wallet where coins are secured and allow the users to trade safely.
U.S dollars or any other crypto is used to buy cryptocurrency. Before you invest, think about the risk and your budget, then plan a strategy.
Binance coin is one of the most popular platforms which stores the largest volume of cryptocurrencies. It charges a comparatively low fee of just 0.1% for all crypto trades.
How To Protect Yourself?
Undoubtedly, cryptocurrency is risky and can get hacked, but it does not mean you should avoid investing. Investors should invest in established companies that are popular among traders. This way, the chance of scams is avoided.
You can also go for alt-coins, also known as stable coins. These coins are not volatile and subject to fluctuations. It is backed by tech giant Facebook, who introduced Libra.
There is always a cloud of uncertainty revolving around cryptocurrency. Some experts discourage investors, but some encourage them to invest.
It is all down to the investor. By taking calculated risks and planning a strategy, people might be able to benefit from it.