What is Cryptocurrency And is it A Safe Investment?

Cryptocurrency means digital currency. It is a kind of virtual currency in which encryption techniques are used to regulate the generation of currency units and verify the transfer of funds. Cryptocurrencies operate without any intermediary such as banks.

2017 was basically the year when blockchain technology and subsequently cryptocurrencies became known among the masses leading to the emergence of a number of cryptocurrency development companies all over the world. You must have heard a lot about cryptocurrencies being the next big thing and how blockchain technology can possibly disrupt all the industries. Bitcoin, the most prominent cryptocurrency and the one you’re most likely to have read about, has been around since 2009. However, it’s only been in the past few months that cryptocurrencies have exploded into the national and worldwide consciousness.

And you must have seen the crazy increases in value of Bitcoin and must have heard stories of people who have become rich investing in cryptocurrencies. However now when the hype is real, the competition among various cryptocurrencies is tough, is it a plausible decision for someone to invest in a cryptocurrency?

Though the answer is yes, there are some rules and steps you would need to follow.

As of January 2018, there were over 1,000 cryptocurrencies in existence; this number will only grow as the time goes on. Just like the boom of mobile applications back in the day, many of these cryptocurrencies are unsound and lacking in purpose. They are here only because everyone else is raving about the new technology. Investing in a random cryptocurrency without conducting any due diligence would be a huge loss for you. Visit the cryptocurrency site you are interested to invest in, see if it looks professional. It’s a crowded field out there, what makes this one stand out and what problem does it promise to solve?

The way to acquire, trade and sell cryptocurrencies is mainly through exchanges. Cryptocurrency exchanges are websites that allow cryptocurrency transactions, either directly between user and site or between two users with the site acting as a middleman. There are a lot of exchanges out there and you must pick out one only after figuring out what you want to do as an investor. Once you have chosen an exchange, familiarize yourself with the options that exchange offers you. If you are only planning on buying and holding a cryptocurrency then you must familiarise yourself with the basic buy and sell functions at the minimum.

Cryptocurrencies are digital assets and made on the basis of a decentralised technology. Anyone with the private key has the access to the cryptocurrency therefore you need to keep yours safe. Hardware wallets are a safe way to store the cryptocurrencies making it virtually impossible for anyone to exploit them.