Getting into cryptocurrency investing can be a bit intimidating, but certainly not impossible. If you are looking to create wealth through crypto, as opposed to day trading as a hobby, this is the guide for you. In order to transfer your cash from government-controlled currency into digital coins run by the unstoppable blockchain network, there are some things you have to learn first:
What is cryptocurrency?
First of all, what even is cryptocurrency? Cryptocurrency is a decentralized form of digital money that uses encryption techniques and a public ledger system called “blockchain” in order to secure transactions and control the creation of new units. It's basically just mathematical formulas that have been designed by computer scientists using complex coding languages. Is it any good as money? Cryptocurrency has shown to be a very volatile form of investment, with prices swinging up and down regularly. There are some who believe it is the future of money, while others think it's just a passing trend. The verdict is still out on that one.
How do I buy it?
In order to buy cryptocurrency, you will need to use an online exchange that deals in crypto-to-fiat transactions. This means that you will be exchanging your government-backed currency for digital coins. The most popular exchanges are Coinbase and Gemini. You will also need to create an account on the exchange and provide proof of identification, such as a driver's license or passport. Once your account is verified, you can then deposit funds into it from your bank account.
How do I store it?
Once you have purchased some cryptocurrency, you will need to find a place to store it. There are a few different options here. You can store it on the exchange where you bought it, but this is not recommended because exchanges are often hacked and your coins could be stolen. The best option is to use a “wallet.” Wallets come in both software and hardware form, and can be stored on your computer or offline on a physical device like a USB drive. I recommend a hardware wallet such as a Trezor.
What can I do with it?
Now that you have some cryptocurrency, what can you do with it? Well, the most common thing to do is to hold onto it as an investment. There are also some crypto debit cards that make spending your cryptocurrency possible at regular online retailers like Amazon, but this is still in its infancy. You can use it to buy goods or services directly from other people who accept cryptocurrency for payment. Or you might be able to convert it back into government-controlled cash by selling it on an exchange.
What happens when I'm ready to cash out?
Now that you have your hands full of digital coins, what do you do with them? Well, when you want to turn your investment back into fiat currency, all you need to do is go back to the same exchange where you bought your cryptocurrency and sell it again. Then withdraw all of the funds from your account using a bank wire transfer or digital currency exchange.
That's it! You are now a cryptocurrency investor. The world of digital money is at your fingertips. Just be sure to do your research before buying into any coins and always remember that this is a volatile market where fortunes can be made – or lost – in a matter of hours.
