What Does It Take to Buy Cryptocurrency? - The Beginner's Guide

The cryptocurrency sector of the world economy is growing rapidly - in less than a decade more than a thousand cryptocurrencies have been created, and their aggregate capitalization totals hundreds of billions of dollars.

[SPONSORED] Perspectives of investing in cryptocurrencies [SPONSORED]

The cryptocurrency sector of the world economy is growing rapidly - in less than a decade more than a thousand cryptocurrencies have been created, and their aggregate capitalization totals hundreds of billions of dollars. In 2009, Bitcoin was exchanged to fiat money at the rate of 1300 BTC for $1, and less than in ten years the BTC to USD rate topped to $6,153 (as of June 23).

Cryptocurrency has several clear privileges:

- no commissions;

- all operations on the blockchain are very well protected;

- all operations are carried out without delays.

But there are both pros and cons though. It's hardly possible to buy any good you want for cryptocurrency; you first need to exchange it for money. Cryptocurrency mostly acts as a store of value now. So, whether to invest in it and which cryptocurrency to choose depend only on your goals and preferences.

How secure is cryptocurrency?

Many critics refer to cryptocurrencies as financial pyramids, predicting the inevitable “collapse”. As a result, some investors will receive extra profits, while the rest will fall into the category of victims. This is based on the assertion that cryptocurrency is neither backed by the gold and foreign exchange reserves (as the fiat currency in the past), nor the volume of trade (as it is now).

Conversely, the cryptocurrency adepts argue that the original cryptocurrency does not require a guarantee in the form of gold or foreign currency stock since it is self-sufficient in this sense. As an example, the value of gold is provided only by the fact that it is an investment object. When using gold as an industrial raw material, its value would be lower. In this case, high prices of gold and cryptocurrency are set in terms of such an unreliable mechanism as trust. Gold is considered more promising given the tradition, and the prospect of crashing is unlikely due to the lack of a similar precedent in the past. Cryptocurrency is, in essence, a virtual type of stock, the value of which is confirmed by the economic activity and profitability of the companies that released them.

The big difference between cryptocurrency and fiat money is that, with the key loss, all the funds that are stored in the crypto wallet will come out of circulation irrevocably.

Cautious cryptocurrency analysts recommend investing only the amounts the loss of which will not be ruinous to your budget.

How to buy cryptocurrency

When it comes to cashing out cryptocurrency, the most common way is to convert an altcoin to Bitcoin and then exchange Bitcoin to fiat money. Often, when buying any altcoin, BTC is used as an intermediate currency.

Over the past few years, many services have appeared to simplify direct exchanges to fiat currency. One such example is CEX.IO. They offer opportunities for buying and selling a number of altcoins for USD, EUR, and even GBP. Among the cryptocurrencies supported are Bitcoin, Ethereum, Bitcoin Cash, Ripple, Dash, Zcash, Bitcoin Gold and Stellar Lumens.

Still, for buying less popular altcoins, the most commonly accepted cryptocurrencies are used. For those purposes, it will be difficult to do without Bitcoin, Ethereum or Tether.

How to choose cryptocurrency for investment

The short-term investment in cryptocurrencies produces a higher ROI than that of digital assets or equities. But if you do not follow a well-thought-out investment strategy and closely watch the market changes, there is a major risk of losing a significant part of your investment. But which cryptocurrency to buy then and how to have the best of the bargain? The Internet is full of analytical articles on this topic. The majority advises to invest in well-proven projects like Bitcoin, Ethereum, Litecoin, or others from the list of cryptocurrencies that are leading the market. Let’s take a closer look at them.

Ethereum. This cryptocurrency has proven itself as a younger Bitcoin’s brother. Ethereum is growing fast enough. For example, at the beginning of 2017, the rate was $8, while today it fluctuates around $560.

Dash. It appeared on the market as Xcoin far back in 2014 and was rebranded as Dash further on in 2015. Despite the fact that it had a bumpy road in the making, Dash has already made a lot of noise. Experts believe that this cryptocurrency may become a direct competitor to Bitcoin. Its original price was $0.21 in 2014, but now you can buy Dash for $319.

Litecoin. This is another promising cryptocurrency that came into existence as an alternative to Bitcoin in 2011. The value of this cryptocurrency is relatively low (cheaper than those mentioned above). It costs only $120; still, many experts argue that Litecoin has a great potential.

Bitcoin is a legend. If there was a question about the leader of all cryptocurrencies, then the ultimate answer would be Bitcoin. For many people, Bitcoin has become a commonplace notion identifying the new era of virtual money. Bitcoin is an undisputed leader in terms of price as well. To become a happy owner of one Bitcoin, the investor needs to shell out around $6,000.

Much can be written about each and every cryptocurrency, most of them have a chance to grow and bring profit. But any cryptocurrency out there is extremely volatile - there is no stability in this industry so far. It is here that you need to think twice about buying and whether this type of investment is a good fit for you. So the choice is always yours!

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