The Ultimate Beginner’s Guide to Cryptocurrency

Cryptocurrency, most commonly identified as digital money, was first instituted in 2009 with the famous Bitcoin launch. Litecoin followed the launch in 2011; since then, many more crypto assets have joined the crypto world. 

Cryptography secures the currency in crypto, thus protecting against counterfeiting and double-spending. The host of crypto is blockchain, a decentralized ledger system using state-of-the-art infrastructure. 

Recently, the advancements in the crypto world have made many people think of investing in crypto. Naturally, beginner investors want to enjoy the crypto world’s benefits but need help figuring out how to start. Therefore, this write-up will give every investor a short guide into the crypto world, the start, the benefits, and the associated risks. Keep reading to find out more. 

Must-Have Tools in Crypto

When choosing to invest in the crypto world, there are tools that a user must have. Here are the most crucial crypto beginner tools;

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Wallet, The Storage Tool

A crypto wallet is a must-have tool when joining the crypto world; therefore, you first need to get the best wallet and sign-up. Wallets are necessary tools for storing private keys of particular assets. The best crypto wallets are non-custodial, allowing complete user control over their funds. Examples of these wallets include; 

• Exodus
• Trezor One
• Ledger Nano X
• Electrum

Exchange Platforms, The Crypto Market Place

Another vital tool for crypto is a crypto exchange platform that allows users to buy and sell crypto assets. Users can exchange crypto for crypto or fiat, depending on the exchange selection. Among the best exchange platforms include;

• Binance
• Coinbase
• Kraken
• Luno
• Bittrex

Portfolio Tracking Tool

Since there are thousands of crypto assets, an investor may decide to invest in several crypto assets. At this point, the investor will need a helpful portfolio tracking tool. Portfolio trackers help investors manage their crypto investment portfolios in one dashboard. Currently, there are dozens of portfolio tracking tools, but the top five include the following;

• Delta
• Blockfolio
• Coinstats
• Cointracking

Coinmarketcap

Coinmarketcap is a crypto informational tool displaying charts and analytical information about individual coins and the market as a whole. In this platform, you get details like the prevailing market price, the market cap of the assets, and the 24-hour and seven-day charts showing the price changes. Coinmarketcap is a tool all crypto users should use to understand the crypto world. 

Crypto News Publications

News publication platforms are also crucial for crypto users and beginners. At the start of your crypto journey, you must get enough information about the crypto world, the latest market cap, coins, etc. Among the best crypto news and publication platforms providing trustworthy information include;

• Cointelegraph
• Coinsutra
• Coindesk
• CCN

What are the Best Crypto Investment Options?

Although there are currently over 10,000 cryptocurrencies, only some are good investment options. Some of them have stagnating growth, while others are just dead. So, what cryptocurrencies are the best investment prospects?

• Bitcoin has a current market cap of over $320B, with the unit price at around 16.5k. However, the growth of BTC has been impeccable, with the asset reaching 69k in 2021. 
• Ethereum is the second-largest crypto by market cap. Currently, its market cap stands at $145 billion and a surging unit value of $1.2k
• Binance coin
• Chainlink

How Can You Earn in Crypto?

As a beginner, you need to know how to start making returns in crypto. The crypto world provides vast opportunities for earning passive income. Among the ways include;

• Staking involves using PoS algorithms to validate crypto transactions and release new blocks. Staking parties earn rewards in the form of cryptocurrency. 
• Mining- Mining leverages PoW algorithms where the miner completes complex computations and releases blocks. In return, the miner gets rewards in the form of currency mined.  
• Bounties and Affiliate marketing
• Lending- Involves lending crypto to third parties and, in return, receiving interest.
• Liquidity provision- Involves collateralizing some assets to provide liquidity for a particular crypto asset. 
• Masternodes and lighting networks.
• Airdrops and forks

What are the Benefits of Cryptocurrency?

The crypto world has vast benefits for its users, whether a beginner or experienced. Here are some of the benefits;

• Cryptocurrency eliminates intermediaries in transactions. The traditional financial world has processes involving brokers, paperwork, and commissions, often taking colossal amounts of time. Cryptocurrency involves direct and peer-to-peer interactions, thus more transparency and convenience. 
• The Crypto world offers privacy in transactions. Currently, fiat systems lack transparency in almost every way, with the banking systems saving your details and accessing your accounts. However, cryptocurrency makes transactions highly confidential; in P2P cases, only the transacting parties have the transaction information.
• In traditional financial systems, transaction fees are often hefty, with costs imposed on almost every activity, including writing cheques and transferring expenses. In addition, at times, fees are imposed to pay other fees. However, cryptocurrencies like BTC tend to set lower to no fees. Although some crypto service platforms charge fees, the costs are relatively lower than the levies charged in fiats.
• Cryptocurrency offers top security by fostering complete immutability and transparency. Blockchains possess the attributes of transparency and immutability; thus, fraud is almost impossible in the blockchain.
• The infrastructure hosting crypto also makes it relatively easy for persons to complete international trades. As long as the legal jurisdictions accept crypto assets, the transfer to global bounds is affordable, fast, and comfortable. 
• The volatility in crypto has created humongous amounts of wealth for crypto investors. For instance, BTC has gained serious momentum in the past six months. In October, for example, its price was at the $13k mark, but today, the coin is valued at $52k, four times the October price.  

Risks Associated with Cryptocurrency

As many as the benefits of treading in the crypto world are, there are more risks. It would help if you understood some of the following risks before you begin your crypto journey;

• You might lose your wealth entirely if you lose your details, like the private key. Unfortunately, most crypto platforms do not have the recovery option, thus making it risky for the users.
• Mining cryptocurrency has proven to have severe environmental issues. Moreover, mining consumes humongous amounts of electricity. Therefore, the ecological costs of mining are a severe problem today.
• Crypto platforms are prone to hacking. To date, many have been hacked. However, most platforms set robust policies to reduce the chances of hacking. 
• Volatility, although practical, is a severe risk. For instance, the price of BTC in 2017 surged to $17.9k, but by the end of February, it plummeted to about $6.2k. The episode caused severe losses for some FOMO investors.
• The crypto world is unregulated, meaning they don’t adhere to any particular code. As such, if scams occur, it may be impossible to trace them, and the user might lose a big deal.

Ready to Invest in Crypto?

After reading the details above, you might decide that the road is clear and ready to invest. Thus, take the first step of signing onto a wallet service. Next, read crypto information from the above publications to understand what’s trending in the crypto world. 

Choose the asset to invest in after thorough research on the coinmarketcap platform. Understand the assets market analysis for some time before taking the step to invest. 

Btc

Bitcoin

$27.496
price

2.87315%
price change

TRADE NOW

Identify the risks associated with the crypto world, and find a way to hedge against the risks. After adhering closely to the abovementioned steps, you can invest in crypto and earn.