cryptocurrencies

Why Crypto Investing May Offer You Once in a Lifetime Returns? You have probably heard alot about crypto. If you have not invested into any cryptocurrencies, you may be wondering if you should get started. To help you get started, we have created this simple overview of the world of cryptocurrency investing. 

 

What is cryptocurrency?

A cryptocurrency is a digital currency that records and verifies all of its transactions on a public ledger while keeping both parties involved in the transaction. Currently, there are tens of thousands of cryptocurrencies in circulation with a total market cap of nearly $2 trillion. 

How is Cryptocurrency Used

There are a number of functions for cryptocurrency that give it value. Here are the four most common ways cryptocurrencies are used. 

Store of value

Crypto is used as a store of value for those who want to have more private ownership of their wealth without a store of value. 

Transfers 

Crypto is also a popular form or remittance especially in parts of the world where transaction fees are expensive and time consuming. Additionally, crypto transfer do not require the permission of a third party.

Smart contracts 

Some cryptos can be used to create what are known as smart contracts. These contracts can allow an action to be executed when certain criteria is met. 

Types of cryptocurrency

When people talk about cryptocurrency investing, you will usually hear general terms – Bitcoin and altcoins. Here is what these terms mean. 

Bitcoin

In terms of investing, Bitcoin can refer to either the cryptocurrency Bitcoin or the family of Bitcoin devised cryptocurrencies such as Bitcoin Cash and Bitcoin Gold. As the original cryptocurrency, Bitcoin is usually referred to as one type or cryptocurrency because of its size and dominance. 

Altcoins

Altcoins refer to all crypto outside of the Bitcoin family. This can include Ethereum, Caradno, memecoins, stablecoins as well as thousands of other coins. 

Cryptocurrency Classifications 

You will also hear cryptocurrencies be classified into two types of classifications – centralized and decentralized. Here’s a look at which either term means.

Centralized 

A centralized crypto is administered by a team that has direct control over the the operations and the function of the crypto. As an example Ethereum is still administered by one of its co-founder Vitalike Buterin. 

Decentralized 

A decentralized crypto does not have a central administration. Instead, the crypto is administered by whoever owns a majority of the coins. As an example, Bitcoin has not central administration team. All decisions affecting Bitcoin have to be agreed upon by the majority of Bitcoin holders. 

How to Get Started Investing In Crypto 

Since cryptocurrency is one of the newest asset classes, you should only use speculative funds. You may want to consider investing in Bitcoin first since it is the oldest and generally considered the most secure crypto. From there, consider alt coins that you understand and feel have potential. 

Adding Crypto to Your Portfolio

Many people have made life changing wealth with crypto. However, it is not too late to grab a piece of the crypto pie. Be sure to conduct some careful research and due diligence before making a final investing decision.