Introduction: To invest in cryptocurrencies
The first cryptocurrency to come into existence was Bitcoin which was built on Blockchain technology. It was introduced in 2009 by the mysterious person Satoshi Nakamoto. As of the time I wrote this blog 17 million bitcoin had been mined, and it is believed that a total of 21 million bitcoins could be mined. Other cryptocurrencies that are popular are Ethereum, Litecoin, Ripple, Golem, Civic and hard forks of Bitcoin such as Bitcoin Cash and Bitcoin Gold.
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It is advised that users not put all their funds in one cryptocurrency. Also, avoid investing during the cryptocurrency bubble’s peak. It has been observed that the price has suddenly dropped down at the top of the crypto bubble. Because cryptocurrency is highly volatile, users should only invest what they can afford to risk losing. There isn’t any government control over cryptocurrency as it is not centralized.
Steve Wozniak was the co-founder of Apple. He predicted that Bitcoin will become a real gold, and will overtake the other currencies, including USD, EUR and INR in the future. Bitcoin will also be a global currency in the future.
Why and Why Not Invest in cryptocurrency?
Bitcoin was the first cryptocurrency developed. Since then, about 1600+ cryptocurrencies have been introduced. Each coin has a unique feature.
One of the reasons I’ve encountered and would like to share is the fact that cryptocurrency were designed using a decentralized platform. Users do not have to transfer money to other locations. This is contrary to fiat currencies which require users to use platforms like Bank to transfer funds between accounts. Cryptocurrency is based on a secure blockchain technology that has virtually zero chance to hack and steal your cryptocurrency if you’ve kept your important information.
You should always avoid buying cryptocurrencies at the high point of cryptocurrency-bubble. Many of us buy the cryptocurrencies at the peak hoping to make rapid money only to succumb to the hype surrounding bubbles and end up losing their money. It is better for users to do a lot of study prior to investing in the funds. It is always beneficial to put your money in a variety of cryptocurrencies rather than one because it has been discovered that some cryptocurrencies increase in value, while others are less even if the other cryptos fall into the red zone.
Cryptocurrencies to Focus
In 2014, Bitcoin holds the 90 percent market share, and the all the other cryptos hold the remaining 10 percent. Although Bitcoin still dominates the crypto market but its share has dipped sharply from 95 percentage to 38% in 2017. Altcoins like Ripple, Ethereum, and Litecoin have grown quickly and have taken over the majority of the market.
Bitcoin is still dominating the cryptocurrency market but is not the only cryptocurrency you need to consider while investing in crypto. Here are a few of the most important cryptocurrencies to think about:
How and where to purchase Cryptocurrencies
While some years ago it was difficult to purchase cryptocurrency, but today the buyers have a variety of platforms available.
In 2015, India has two major bitcoin platforms Unocoin wallet and Zebpay wallet where users can buy and sell bitcoin only. The users have to buy bitcoin through their wallets only, but not from another person. There was a different between purchasing and selling rates and users must pay some nominal fee for the transaction.
In 2017, the Cryptocurrency industry has grown tremendously, and the value of Bitcoin has risen rapidly, in particular during the final six months of 2017 . This made people look for alternatives to Bitcoin and crossed 14 lakhs in the Indian market.
As Unodax and Zebpay are the two major platforms in India who were dominating the market with 90% of market share – which was dealing in Bitcoin only. This allows other businesses to grow by incorporating altcoins and sometimes even force Unocoin to introduce other currencies on their platform.
Unocoin, one of India’s top blockchain and cryptocurrency firms, launched an exclusive platform called UnoDAX Exchange for their users to trade several cryptocurrencies aside from trading Bitcoin in Unocoin. The distinction between these platforms was that Unocion provided immediate buy and sell of bitcoin only whereas on UnoDAX users are able to make an order for any cryptocurrency available and, when it is compatible with the person who will receive the order, the transaction will be executed.
Other exchanges that allow you to trade cryptocurrency in India are Koinex, Coinsecure, Bitbns, WazirX.
Users have to open an account in any exchange by signing-up with email id and submitting KYC information. After verification of their account then they can exchange the coins of their choice.
Users have to research well before investing in any coins and not fall into the trap of cryptocurrency-bubble. It is essential to study the reliability and safety of every exchange.
Each transaction is subject to a small fee from all Exchanges. There are two kinds: the Taker fee and the Maker fee. You’ll need pay the fee for transfer if you want to transfer your cryptocurrency to a different exchange or private wallet. Because every exchange has a different price structure for the transfer of money, the fees are based on the currency and the exchange.
Major Altcoins other than Bitcoin
Bitcoin dominates the market with a 38% share and is then Ripple and Ethereum. Ripple, Ethereum is Litecoin, Bitcoin Cash, and so on. UnoDAX and Bitfinex have many coins listed that include Tron, Tron, Kraken, Bitstamp, Ripple, Ethereum, Litecoin, Kraken, Bitstamp, Basic Attention, Augur, Monero and Tron. You should purchase any coin that is compatible with your portfolio.
You must make sure you only invest what you are able to risk. The cryptocurrency market is highly volatile , and there is no regulation by government.
What is the best time to buy?
There isn’t a set of rules for when to purchase your favorite cryptocurrency. But, it is crucial to research market stability. It is not advisable to invest when the market is at the top of a crypto bubble or when the price is crashing constantly. It is best to consider investing when the price is steady at a lower value for a period of time.
Cryptocurrencies Storage Method
It is crucial to know how to protect your cryptocurrency prior to buying any cryptocurrency.
In general, all exchanges provide the storing facility where you can keep your money in a safe place. If you own an exchange account You must not divulge your username, password, or 2FA.
Paper wallet, Hardware wallet, Software wallet are a few options to keep their crypto.
Paper wallet: A wallet made of paper can be a cold, offline storage solution to store your crypto. The paper wallet prints your private as well as your public key onto the piece. A QR code is also printed. To continue transactions, you need to scan the QR code. How secure is it? There is no need to be concerned about the security of your account or the attack of any malware that is malicious. Place your papers in a safe location and, if you can ensure that you keep at least two or three pieces of paper in your wallet.
Hardware Wallet: A hardware wallet is a tangible device that keeps your the cryptocurrency secure. There are various types of hardware wallet but commonly employed is USB. Keep your cryptocurrency safe in a hardware wallet. Once it is lost, you will not be able to recover it.
One notable incident was the time someone mined more than 7000 Bitcoin and deposited it into their wallet on a hardware. Later, he replaced the hardware wallet and used a different wallet. He lost all of his bitcoin when he accidentally destroyed his wallet that was on the hardware, inside which he stored the cryptocurrency instead of the damaged hardware.
What can you buy with cryptocurrencies in India?
The majority of people believe that selling and buying cryptocurrency is only for the investment and getting the highest returns in both a short and long-term. Influencers and bitcoin investors believe that in the coming years Bitcoin will take over all fiat currencies and be recognized as an International currency.
Dell is one of the largest e-commerce business accepting bitcoin as a payment method. Expedia and UNICEF are two more examples.
In India, Sapna Book Mall accepted bitcoin payments by using the Unocoin merchant service. BookMyShow was used to purchase movie tickets and Unocoin platform for mobile payments. According to the report, they’ve stopped the service, but plan to resume it in the near-term.
Cryptocurrency is among the fastest growing areas of investment and it has given nice yields than gold, real estate or stock-markets in the past. It is possible to buy cryptocurrency and then hold it for a long time to reap great returns or invest in the short-term option to earn a quick profit as we have witnessed the growth of a number of coins in 1000%+ in the past. The market for cryptocurrency fluctuates and there is no government control over it. It is essential to invest in any cryptocurrency which they can afford to lose.