While many industries have grown and matured recently, very few have experienced the type of growth that the cryptocurrency space has. While it has noticeably slowed down and regressed in 2018, the total market cap is still much higher than it was at the start of 2017. The industry went from around 1 to 25 billion from 2013-2017 and then skyrocketed to more than 800 billion at a point in early 2018.
Despite the growth and interest in the space, there are still many people who simply don’t know what cryptocurrencies are or are interested in learning more. If that describes you, you have come to the right place. This article is going to look at a few different tips to help you get started with cryptocurrency.
The first thing to do is up your education on everything in the space. You don’t need to dive into all the in-depth technical aspects. However, you need to know what cryptocurrencies are and how to choose which one to invest in. While Bitcoin is the most popular cryptocurrency out there, there are actually thousands of others you can invest in.
You should make sure the coins you invest in are legitimate and solve a need. Also, it is a good idea to familiarize yourself with the various terms and acronyms used in cryptocurrency such as HODL, market order, hot and cold wallets, hard fork, ICO and more.
As for how to go about educating yourself, there are several ways to do it. You can watch videos, speak to experts and even utilize online blockchain advice services. Whatever method you use, be sure to know about the value. Use cases and teams behind the cryptocurrency you want to invest in. Also, be sure to watch out for scams as the industry is ripe with scammers trying to get people’s money.
Find the Right Exchange and Wallet
Once you know which cryptocurrency you want to invest in, it is time to find an exchange and wallet to use. A digital cryptocurrency wallet is used to securely hold your currencies (like a physical wallet). An exchange is how you actually purchase, sell or trade your cryptocurrencies.
There are dozens of different exchanges and wallets out there to choose from. When it comes to choosing wallets, there are a few different things to consider – how easy it is to use, how secure it is, if it supports your cryptocurrency and more. As for choosing an exchange, many will offer support for similar coins, but each one will have different fees, a different UI and might have vastly different features. For example, some are better for novice users who only want to make a few trades here and there. Others are geared more towards experts who make several trades every day.
Know the Risk
Investments always have risk. However, the cryptocurrency industry takes that to a whole other level. While many investments might move a few percentage points every few months, many cryptocurrencies can lose (or gain) that same amount in a matter of days. As a result, before you invest in any cryptocurrency, be prepared to see many highs and lows throughout your ownership.
They are quite volatile and not for the faint of heart. You shouldn’t invest in these like you do a 401k or an IRA unless you are comfortable with a lot of risk. When just starting out, only invest what you can afford to lose. While the markets will eventually begin to stabilize, the industry is currently the wild west. Predicting what happens next has proven difficult.
Hopefully this article has been helpful in getting you started in the cryptocurrency space and can help jumpstart your interest and education in the space.