Bitcoin is the digital gold they say. That’s how common cryptocurrencies are today. But it is not strange that people yet do not know what cryptocurrency is. If you are one of those guys who wonder how can something that doesn’t exist in reality has value, this article is for you.
What is cryptocurrency?
Cryptocurrency is a new generation of digital money that doesn’t need a central authority to monitor or regulate it. Instead, they are based on cryptographic techniques and technology that allows people to trade cryptocurrencies with no security issues.
Apart from being an investment instrument, they can very well be used to exchange goods and services. Decentralized financial projects are using cryptocurrencies in that capacity for quite some time now.
How do I invest?
If you are new to the cryptocurrency world, the first thing that you need to do is to register with a crypto exchange. While the actual route would be to first buy a crypto wallet, you normally do not need to do that as crypto exchanges already come with a wallet. However, if you wish to not actively trade but hold your assets for a long time, you should go for a specialized wallet service.
So once you are on a crypto exchange, you need to add funds to your exchange wallet. Most banks today support adding money to crypto exchanges. If you are somehow unable to do it, you need to consult with your bank first.
Once you have added the funds, you can use that money to buy the cryptocurrency of your choice. As per your strategy, you can hold the coin for as long as you wish to. The only goal that remains the same for all the trading strategies is to buy at a lower price and sell at a higher price.
If you’re unsure how to go about investing in the crypto space, you can always take the help of crypto signals service provider. They’re usually veteran traders that share their own trading setups with their members. But do your research first.
Why are cryptocurrencies popular?
There are a lot of reasons that cryptocurrencies have resonated with people so well.
- Some people really believe in the fundamentals of the crypto projects coming up. They really believe that Bitcoin and Ethereum can solve the world’s problems of financial non-inclusivity and make this world a more connected place.
- Some people who believe in decentralization love the control that this technology puts into their hands. There’s no more bank or govt. dictating the terms of the transactions to them. There is no central authority and no one place that their fund needs to go through to reach the other end.
- Then there are people who love blockchain technology for the level of security that it provides and fills up the loopholes of the traditional payment mechanisms.
- Then some people neither do understand blockchain tech nor have any real interest in the fundamentals of the crypto projects they are investing in. All they care about is that the cryptocurrencies are giving huge returns and they want to make some profit off the surge.
Why something with no real presence has value?
Many people from the exclusive-fiat generation are unable to understand why something with no ‘real’ existence has value and how it can be used as a currency. If you think of cryptocurrency as a currency, it might be hard to wrap your head around the fact. Instead, think of it as a service, a service that allows you to send money over the globe, with anonymity, security, and without the need of any central third party authority. It is due to these functions that these currencies have a market demand and thus value.