Last updated on October 9th, 2023 at 01:03 pm
Crypto currency is an alternate investment option to money market instruments, with a success of Bitcoin it is creating a buzz for several years in the market.
If you are interested in Crypto and need to have a basic idea about Investment and the Cryptomarket and its functions, this post will help you to begin your journey toward the Crypto market.
What is Crypto Currency?
Cryptocurrency is currency in Digital/Virtual format, which uses Block chain technology in transaction between peer to peer computers.
Compared to physical currency crypto currency is not regulated by any central authority, hence it is also called decentralized currency.
Since there is no central regulator the transaction has no intermediator only has two parties i.e. Buyer and seller.
Who issues Crypto Currency?
Crypto is not issued or regulated by any central bank, The crypto currency can be created and issued by anyone.
Anybody with a blockchain coding skill can create a crypto currency.Even people without any coding knowledge can easily create a token for existing CryptoCurrency by modifying a code in the existing crypto currency.
Crypto Currency Market
There are more than 10,000 Crypto Currency available in the market now. The reason for such huge number is the demand and can be produced simply.
Though there are variety of crypto’s are available in the market, major share of market cap is held by top 10 cryptos in the market.
The first centralized cryptocurrency is Bitcoin which was created by programmer Satoshi Nakamoto in 2009.
Following the success of Bitcoin there are many cryptos were developed in the following years. Crypto currencies other than bitcoin are collectively called as “Alternative crypto coins (ALTCOINS)”.
The market cap of cryptocurrency is at present $970 billion among which Bitcoin holds more 40% market share in the crypto market cap. The other Important cryptocurrencies includes Ethereum, Tether, BNB, Binance, Cardano, etc.
Cryptocurrency Investment Basic
The next question is that is it safe to invest in cryptocurrency? The answer is similar to any other non conventional investment option, there are considerable risk in investing in the Cryptomarket as it is a high volatile asset.
It requires lot of research to predict the market the value of such CryptoCoin can hit the bottom within minutes.
But with following a market movement actively, doing a research on particular crypto like who is the maker of the coin, where it is majorly getting traded , the business for which it was originaly made, major holder of the coins, you can ascertain the risk involved with the currency and avoid loss.
Even with such risks the Financial advisors are being optimistic about investment in the Crypto’s as the future for the Crypto is bright.
How to Buy & Sell Crypto Currency
The transaction in the cryptocurrency is similar to investment in the share market with an intermediator bringing the seller and buyer together.
If you choose the perfect Crypto Currency for you to invest, The following steps are involved in the investment and trading of cryptocurrency.
Step 1 -> Choosing right crypto currency exchange
The first step is to find the suitable crypto exchange providers.
Compare the various Exchange provider based on your need like consider the crypto’s available with the exchange provider, Service Charges and fees.
Step 2 -> Add money to your wallet
As per your requirement add required amount to your wallet provided by exchange provider. These are available in various currency like USD, POUND, etc.
Step 3 -> Request for crypto currency
Make a request for the particular cryptocurrency to your exchange provider, with details such as what cryptocurrency you want, Quantity you want and the date and time of transaction for future transaction.
Upon receiving of all the information, your exchange provider will process your request and purchase the concerned Crypto for you. There will be a processing fee for the service provided.
Pros and Cons of Cryptocurrency
Pros:
- It uses blockchain technology for each transation hence it is more secured than traditional banking transactions.
- It removes intermediatories in transaction, which results in reduction of charges induced. It is also reduces the transaction duration and saves time.
- Investment in crypto’s have a bright future and are backed by top financial advisors.
Cons:
- The value of Crypto is more volatile than other investment methods.
- Cryptos are provided with a private key if you lose them there is no alternate way to recover the amount and the amount is permanently lost.
- Choosing the correct cryptocurrency is an hectic task and requires a considerable amount of research and knowledge of the market
Hope you find this post helpful
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