Cryptocurrency trading is a very lucrative business, but also very difficult for most beginners. Everyone has heard of bitcoin, but few know anything more about it at first.
What is bitcoin?
Bitcoin was a currency created in 2008. It was created by a group of people known by the pseudonym Satoshi Nakamoto. In 2009, when it was released, its value was almost equal to 0 ($ 0.03). Today, 11 years later, the value of bitcoin has exceeded $ 40,000! It is important to say that bitcoin is decentralized, ie there is no central authority. I will add that it is based on the principle of blockchain, which makes it very secure to use, and does not require the presence of a third party in transactions. But what is it that makes it harder for beginners when it comes to bitcoin trading?
1. They don’t know where to buy bitcoins
The first question of every beginner is where and how to buy bitcoins since it is about virtual money. The answer is very simple – cryptocurrencies can be bought in several ways, but the purchase is most often done in exchange offices or ATMs. Experienced traders say that going to the exchange office will take you more time, and you will have to leave your data and bank account number, while in the case of ATMs, the process is much simpler. Cryptocurrency ATMs exist in many countries and their number is growing day by day. All you need to do is swipe your credit card and type in as much bitcoin as you want. And, you just became a proud owner of bitcoin!
2. Where are they stored?
The money is kept in the wallet. The situation is no different in this case either, except that the wallet, just like the currency, is digital. So, before buying any cryptocurrency, you need to provide a wallet in which to store them. Between the two divisions of wallets that exist – hot and cold, users are more likely to opt for hot because it is more affordable. However, it is important to know that it carries a high risk of hacker attacks because it requires an internet connection. In contrast, a cold, hardware wallet is a bigger investment, but also worthwhile, because it keeps your digital money away from hackers.
3. How to choose a good platform?
Today, there are many platforms on which you can trade cryptocurrencies. Unfortunately, there are many fakes so you have to be careful when choosing. It is best to choose one that is recommended, to read the Terms and Conditions carefully, as well as the reviews of other users because they will help you make the right decision.
4. Automatic trading – what is it?
Bitcoin trading is not an easy task, and if you want to be serious about it, you have to constantly monitor the situation on the market, to learn and dedicate time to this type of entertainment every day. Many do not want to give up their earnings or their free time, and they have found the solution in software applications that do much of the work without a merchant, all thanks to artificial intelligence, which is recognizable by its fast action. So, you need to install the application and adjust the settings to your liking, and the further work is on the application itself. You can click here to learn more about it.
5. What else is possible with cryptocurrencies besides trading?
For those who want to raise earnings and entertainment to a higher level, there is mining. Mining is another form of earning with cryptocurrencies, but it is a bit more demanding, so it is a common choice of experienced “players”. These are miners who mine blocks – the more blocks they mine, the higher the profit. Every investor has a better chance of making a profit if they join a mining pool. For mining, it is important to note that the equipment is more expensive and consumes a lot of electricity.
6. Fear of loss
There are more and more frequent questions about cryptocurrencies, the most famous and widespread of which is Bitcoin. Does the idea of investing seem rational at all and will the value of bitcoin grow indefinitely?
What is quite clear is that bitcoin does not necessarily have a risky value like, say, gold. Many consider bitcoin trading to be the most common gambling, but things are more complicated than that. However, in the end, it all comes down to the fact that this is an investment like any other, so maybe you can try it – at your own risk, of course.
How to trade bitcoins?
So, you have some money that you want to invest. How are you going to do that?
There are a lot of exchanges, however, before you decide to invest in one, there are certain things you need to look out for. Let’s call it the “Exchange Checklist.”
Validity: Before you do anything at all, first make sure the exchange office is available in your area. Eg. Coinbase, one of the largest stock exchanges, is not available in some countries. So before you do anything, check this out.
Reputation: The next thing you need to check is the reputation of the exchange office. Are customers satisfied with the services? How safe is it? Did people complain? Social networks are good sources to check.
Cryptocurrency exchange rate list: Each exchange office has its exchange rate that can vary. Do your homework here and explore 3 or 4 different ones and their prices.
Security: Always choose exchange offices that need some kind of your data confirmation because they are much more secure than anonymous exchange offices. In the end, it’s your hard-earned money. You need to take that extra step to make sure.
Since the value of cryptocurrencies changes daily and even several times during the day, experienced traders advise that it is best to invest in several different currencies so that falling values of one do not lose all the money.