Cryptocurrency is huge right now. Bitcoin is trading at around $3,600 after surpassing $4,000 just weeks ago. People are making money left and right, but for the non-tech savvy person, it can be very confusing to even start in cryptocurrency.
There is a lot to know, and it may seem impossible to learn everything quickly.
But it’s possible to get the basics down in just a 15 minute reading session. I’m going to help you learn the basics so that you have a better understanding of cryptocurrencies and how they work.
Types of Cryptocurrencies
Bitcoin and ethereum are the best-known cryptocurrencies, or “coins,” as some people call them. But there are a lot more available. I’ll go through the most popular currencies for you:
- Bitcoin is the clear industry leader. This digital currency was founded in 2009 and offers a decentralized currency.
- Bitcoin Cash is a spinoff of bitcoin, made with a hard fork in 2017 and designed to offer faster transactions than bitcoin.
- Dash is like bitcoin, but it’s what James Bond would use. The currency is very secretive, and transactions are said to be nearly untraceable. Dash was previously called “darkcoin,” but it was rebranded.
- Ethereum is a quick rising currency, and it has secured its position among the top 3 cryptocurrencies. The platform has been widely adopted, with Russian adoption pushing the currency to be a top gainer his year. It’s built to provide smart contracts to reduce fraud.
- Litecoin was founded in 2011 and while a lot like bitcoin, the currency offers faster block generation. Faster transaction confirmations are provided via Litecoin.
- Monero is an untraceable currency, and it has gained a lot of traction among the cryptocurrency community.
- Ripple has over $1 billion in market capitalization and was released in 2012. The currency offers instant low-cost international payments, making it a popular choice for cross-border payments.
- Zcash was launched in late 2016 and claims to provide more security than bitcoin. All transactions remain recorded, yet the platform keeps personal information private during transactions.
Are there other cryptocurrencies to know about? Absolutely.
A few of the more popular ones are:
But in an effort not to overwhelm yourself, I suggest sticking to the top-tier currencies unless you plan on doing a lot of your own research. All currencies have their own benefits, so make your choice on which one to invest in wisely.
Investing in Cryptocurrency: The Basics
Cryptocurrencies can be invested in, and there is a lot to consider for the serious investor. I will let you figure out the percentage of your portfolio that will be comprised of cryptocurrencies.
I don’t want you to take too much risk based on my percentage advice.
If you want to get started in bitcoin, you’ll need to find an exchange where you can buy and trade cryptocurrency. Mining bitcoin is becoming very difficult, and it can be very costly, too.
Exchanges allow you to buy, sell and trade all of your currencies. The leading exchange is Coinbase, and it’s very user-friendly. I recommend giving it a try, but there are others that can be used, too.
You’ll need to setup your account and then:
- Select payment method under the “Buy/Sell” tab
- Enter your amount
- Click “buy bitcoin”
- View the bitcoin in your account
I suggest making an account on GDAX, too, so that you can go further with your trading. This can be done through Coinbase, which connects to GDAX for free. Once you get familiar with trading currencies, you can venture out to other exchanges that offer more currencies you can invest in.
This is a lot like forex trading, so it takes some time.
If you don’t want to spend your money, you can choose mining. This will involve a considerable investment in:
It takes a lot of effort to get a mining operation running, but it does provide a lower risk investment. You can mine bitcoin, which is trading at $3,600, and then you’ll have $3,600 in your portfolio.
Of course, this is just a basic guide to cryptocurrency, but it provides you with the basics to get started with your own cryptocurrency investments.