Did you buy crypto for the first time and not do anything with it? Or still haven’t jumped on the bandwagon? In order to buy, sell, and make money with crypto, you need to understand it.
1) Understand what you’re investing in with crypto
If you’re like most people, the word “crypto” probably conjures up images of Bitcoin and other digital currencies. And while it’s true that crypto can refer to anything related to cryptography or digital currencies, there’s a lot more to it than that.
In its simplest form, crypto is a catch-all term for anything related to cryptography or digital currencies. This includes things like blockchains, smart contracts, and digital wallets. But it goes beyond that, too.
Crypto can also refer to the community of people passionate about all things related to cryptography and digital currencies. This includes developers, investors, and enthusiasts. They’re the people propping filling Twitter with “to the moon” and laying down major assets to keep exchanges alive.
Understanding the value of crypto
Why are some cryptocurrencies worth so much? This question has been asked since the dawn of currency, and is one that still puzzles people today. There are many theories about what gives cryptocurrencies their value, but ultimately it comes down to supply and demand.
Cryptocurrencies are valuable because people are willing to trade them for goods and services. This is because cryptocurrencies offer certain advantages over traditional fiat currencies. For example, cryptocurrencies are decentralized, which means they are not subject to the whims of central banks or governments. They are also global, which makes them easy to trade and store.
Cryptocurrencies are also scarce. There will only ever be 21 million Bitcoin in existence, for example. This scarcity, combined with their utility, gives them value.
Of course, the value of cryptocurrencies can fluctuate wildly. This is because they are still a relatively new asset class and their prices are driven by speculation. However, over time, as more people use and invest in cryptocurrencies, their prices are likely to stabilize.
So, in short, the value of cryptocurrencies comes down to supply and demand. Their utility and scarcity give them value, and as more people use them, their prices are likely to rise.
Understanding how crypto is stored
There are a few ways to store cryptocurrency. The most popular way is through a digital wallet, which can be either hot or cold. Hot wallets are connected to the internet and therefore more vulnerable to hacking, while cold wallets are offline and considered much safer.
Another option is to store your crypto on an exchange, but this comes with its own risks as exchanges have been known to be hacked in the past, and have recently been facing trouble with bankruptcy. The best way to store your cryptocurrency is to find a balance between security and convenience that works for you.
2) Learn how the crypto system works and how to buy it
Buying crypto
It’s actually pretty simple. Just like buying any other asset, you need to find a reputable exchange or marketplace to purchase your coins from. Once you’ve found a seller that you trust, you’ll need to send them your payment in the form of fiat currency (USD, EUR, etc.) or another cryptocurrency. The seller will then release the coins to your wallet.
Of course, there’s a bit more to it than that. You’ll need to make sure that you’re using a secure wallet to store your coins in, and you’ll also need to be aware of the potential risks involved in buying and selling cryptocurrencies.
What are fees related to buying crypto?
Fees associated with buying cryptocurrency can vary depending on the exchange you use. Some exchanges charge a flat fee for all trades, while others charge different fees for different types of orders. Make sure to check the fee schedule of exchange before trading on it.
Here are some common fees you may encounter when buying cryptocurrency:
- Trading Fees: These are fees charged by the exchange for each trade that you make. They can be either a flat fee or a percentage of the total trade value.
- Deposit Fees: Some exchanges charge a fee for depositing funds into your account. This fee is usually a small percentage of the total deposit amount.
- Withdrawal Fees: Exchanges typically charge a fee for withdrawing funds from your account. This fee is usually a small percentage of the total withdrawal amount.
- Conversion Fees: If you’re buying cryptocurrency with fiat currency (e.g. USD, EUR, etc.), you may be charged a conversion fee by the exchange. This fee is usually a small percentage of the total trade value.
Be sure to take all of these fees into account when calculating your total costs of buying cryptocurrency.
Now that you know cryptocurrency, you’re probably wondering how you can get your hands on some. The most common way to do this is through mining.
How to make money on crypto through mining
Mining is the process of verifying and adding transactions to the public ledger, or blockchain. In return for their work, miners are rewarded with cryptocurrency.
So, how do you start mining cryptocurrency?
First, you’ll need to set up a mining rig. This is a computer that’s specifically designed for mining cryptocurrency. Once your rig is set up, you’ll need to download a mining software program.
There are various programs available, so be sure to do your research to find the one that’s right for you. Once your software is set up, you’ll be ready to start mining!
Keep in mind that mining cryptocurrency can be quite resource-intensive, and it’s important to make sure you’re not overloading your system. Monitor your rig’s temperature and hash rate, and adjust your settings as necessary to avoid damaging your hardware.
With a little bit of effort, you can start earning cryptocurrency through mining! Just be sure to do your research and stay safe while you’re doing it.
3) Learn about the volatility in order to understand crypto
When it comes to cryptocurrency, there’s no shortage of news to be found. From coins fluctuating in value by the minute to new ICOs popping up every other day, it can be hard to keep track of everything that’s going on. But what does all of this have to do with the stock market?
Turns out, quite a lot.
You see, cryptocurrency is still a relatively new asset class, and as such, it’s very volatile. Prices can swing wildly up or down in just a few hours. This volatility is partly due to the fact that there’s no central authority regulating the market. So when news comes out that could potentially impact the price of crypto, it can cause a ripple effect that is felt across the entire market.
This was most evident back in December of 2017 when the price of Bitcoin reached an all-time high of nearly $20,000 before crashing back down to around $6,000 just a few months later. This massive price swing was due in part to the introduction of futures contracts on Bitcoin, which allowed investors to bet on the price of Bitcoin going up or down.
These contracts are regulated by the U.S. Commodity Futures Trading Commission (CFTC), which gave them a level of legitimacy that helped drive up the price of Bitcoin. However, when the price started to crash, the CFTC stepped in and put restraints on how these contracts could be traded, which only added to the panic.
This is just one example of how the stock market can impact the price of the cryptocurrency. So if you’re thinking about investing in crypto, it’s important to keep an eye on what’s happening in the markets. Who knows, you might just find the perfect time to buy in.
4) Understand risk management with crypto investing
When it comes to investing in cryptocurrency, there are a lot of things that can go wrong.
Here are some tips on managing your investment risks when investing in crypto.
- Diversify your investments. Diversifying your risks is one of the most important things you can do when investing in crypto. By spreading your investments across different assets and even different types of cryptocurrencies, you can minimize the impact of any one asset’s performance on your overall portfolio. This is especially important in the volatile crypto world, where prices can swing wildly daily. Don’t put all your eggs in one basket, as they say.
- Understand the technology. One of the biggest risks when investing in crypto is not understanding its technology. Make sure you do your research and understand how the blockchain works and what the different coins and tokens are built on before investing.
- Be aware of scams. Unfortunately, there are a lot of scams in the crypto world. Be very careful before sending any money to someone you don’t know or investing in something that sounds too good.
- Have a long-term perspective. Cryptocurrency is a volatile asset, and its prices can go up and down a lot in the short term. If you’re investing in crypto, it’s important to have a long-term perspective and not get too caught up in short-term fluctuations.
By following these tips, you can help protect yourself from some of the potential pitfalls that come with investing in crypto.
5) Don’t invest in crypto more than you can afford to lose
When it comes to investing in cryptocurrency, there’s no one-size-fits-all answer. How much you should invest depends on your individual risk tolerance and overall financial goals. However, experts generally agree that you shouldn’t invest more than you can afford to lose.
We have to mention it again: cryptocurrency is a volatile asset class, and prices can swing wildly up and down. If you invest more than you’re comfortable losing, you may find yourself feeling stressed and panicking when prices fall. On the other hand, if you only invest a small amount, you may miss out on the potential upside of the asset class. So how much should you invest in cryptocurrency?
Here’s what some experts have to say:- “Only invest what you’re comfortable losing.” – Vitalik Buterin, co-founder of Ethereum- “I would say 5 to 10 percent of your portfolio in cryptocurrency is probably about right.” – Tim Draper, venture capitalist.
“People should invest only a small percentage of their overall portfolio in Bitcoin and cryptocurrency because these are still early days.” – Spencer Bogart, managing director at Blockchain Capital.
6) Skip the finfluencers and get your crypto news from reliable sources
There’s no doubt that social media has changed the way we consume news. In the past, we would have to wait for the newspaper to be delivered to our doorstep or tune in to the evening news to find out what was happening in the world. Now, we can simply open up Twitter or Facebook and see what’s trending.
While there are some amazing finfluencers to follow, not all of them understand crypto. Also, just because something is trending doesn’t mean it’s true. In fact, some of the most popular “news” stories on social media are nothing more than fake news. And when it comes to cryptocurrency, fake news is rampant.
Influencer fined $250,000 for crypto promotion scandal
The US Securities and Exchange Commission (SEC) has fined Kim Kardashian $100,000 for promoting an initial coin offering (ICO) without disclosing that she was paid to do so. This is not the first time that Kim has been involved in a financial scandal. In 2016, she was accused of profiting from the sale of “fake” investments in a company called Flooz.com.
The SEC’s investigation into the ICO promotion found that Kim did not disclose that she was paid $200,000 by the company behind the ICO, Centra Tech, Inc. The SEC alleges that Centra misled investors by claiming to have partnered with Visa and Mastercard to create a new cryptocurrency card. Some have even accused her in participating in pump and dump.
Kim has agreed to pay the fine and will not be able to promote any ICOs in the future without disclosing her financial relationship with the company. The SEC’s action against Kim is part of a larger crackdown on celebrities who promote ICOs without disclosing their financial interests.
Get crypto news from reliable sources to understand crypto better
That’s why it’s so important to get your crypto news from reliable sources. Otherwise, you could end up being misled by someone with an ulterior motive.
So, what are some of the most reliable sources for crypto news? Here are a few to get you started:
CoinDesk is one of the leading publications in the space. They provide accurate, up-to-date information on all things cryptocurrency.
CoinTelegraph is another great option. They offer a mix of news and analysis, giving you a well-rounded view of the space.
CCN is another top choice. They provide breaking news as well as in-depth articles on all things crypto.
These are just a few of the many reliable sources for crypto news. So, be sure to bookmark them and check back often for the latest updates.
And remember, always take any crypto news you see on social media with a grain of salt. After all, you never know if it’s real or fake. Getting your news from reliable sources is the best way to stay informed.
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