Cryptocurrency – A Comprehensive Guide for Beginners

With each passing day, investors are getting more interested in cryptocurrency. The hype surrounding crypto has led to the emergence of many websites dedicated to welcoming new investors to this exciting marketplace. If you’re unfamiliar with the basics of cryptocurrency, this guide will provide you with essential knowledge about the crypto market.

What is cryptocurrency?

Cryptocurrency is a digital currency secured by cryptography. It operates without a central authority, using a decentralized system to verify transactions and maintain records.

What are The Types of Cryptocurrencies?

There are over 18,000 different cryptocurrencies available in the market, with new ones being released regularly. Here are some major cryptocurrencies:

1. Bitcoin – Bitcoin is the first and most widely accepted cryptocurrency. It was so popular that it became synonymous with cryptocurrency itself. For potential investors, it’s important to note that Bitcoin's price has risen sharply. However, you can still invest in Bitcoin by purchasing fractions of a coin instead of a whole one.

2. Altcoin – Altcoin refers to any digital currency alternative to Bitcoin. The most popular altcoin is Ethereum, which is also one of the fastest-growing cryptocurrencies. If you plan to invest in altcoins, it’s advisable to gather information from reliable sources.

3. Crypto tokens – The terms crypto coins and tokens can be confusing. Here are some key differences:

• Tokens cannot be mined, while coins can.
• Tokens are not linked to blockchains, but coins are.
• Their utility varies based on the type of product or service they allow users to purchase.

Why should you Invest in Cryptocurrency?

Investing in cryptocurrency can be daunting for some, but exciting for others. Here are some reasons to consider:

1. Diversify your portfolio – If you’re already investing in the stock market, you understand the importance of diversification. Including cryptocurrencies in your investment strategy can significantly reduce risk. However, it’s essential to make informed decisions rather than investing arbitrarily.

2. Hedge against inflation – Similar to gold, cryptocurrencies have a limited supply due to caps on mining. This makes them potential hedges against inflation caused by monetary expansion.

3. Incredible security – Cryptocurrencies are considered secure forms of payment due to their reliance on cryptography and blockchain technology. This security is a compelling reason to invest in cryptocurrency.

Entering the crypto market can be intimidating, especially for beginners. However, with proper guidance and reliable information, you can become a successful crypto investor.