It’s reasonable to assume you have heard of cryptocurrency. And if you have any spare cash and want to invest, you may be thinking of it. So here’s a quick guide to what you need to know.

What is Cryptocurrency?
There are a lot of different kinds of cryptocurrencies. But there is one thing they all have in common. All of them are decentralized and run on the blockchain. This means that crypto has a lot of advantages over traditional banking. Bitcoin is the most popular cryptocurrency, and it is used as a form of digital gold. This makes it an excellent way to measure value. Bitcoin has both old and new versions, and there are also important Bitcoin forks like Bitcoin Cash. This happens when users and developers of a platform want or need changes to be made to them.
How Cryptocurrency Actually Works
Before you get too deep into studying how to exchange cryptocurrency, you might want to learn how it works. Virtual currencies are electronic in nature that are powered by the blockchain. Blockchain technology keeps a record of every cryptocurrency transaction on each node that powers the blockchain on multiple computers called nodes. Because data isn’t stored in place, it is impossible to change a record because all the other records will mismatch when compared. Therefore, an amendment will be reversed to its original state to avoid malicious changes.
Is Cryptocurrency Hackable?
In principle, you could hack into a blockchain if you controlled 51% of the network for that cryptocurrency. But this process isn’t possible because it would be too expensive and would need billions worth of computer equipment. Als, you need a public key and a private key to use a cryptocurrency. Your cryptocurrency wallet makes these keys, which are like passwords. People can send you assets if they know your public key, which is linked to your wallet’s address. Your private key is needed to approve transactions that are sent from your wallet.
Using Crypto for Trading
Cryptocurrencies are a form of money that is different from regular money. Some retailers recognize virtual currencies as a way to pay. But they are very different from other types of assets because they are not physical and change a lot. Traders mostly use them to bet on whether the price will go up or down. Due to the volatile nature of digital currencies, most of them come with a high level of risk. In contrast, others require knowledge or expertise in a specific area. Trading virtual currencies is one way to use cryptocurrency to make money.
The Five Steps to Trade Crypto
Getting involved with crypto requires you to take a specific path. But, for the most part, it’s fairly simple. So here are the five main steps to getting started with crypto assets.
- Open a cryptocurrency brokerage account using a reputable exchange.
- Fund your new account with real money for buying crypto assets.
- Choose a solid and reliable cryptocurrency to purchase.
- Develop a strategy for trading and managing your assets.
- Use automated crypto trading software like Pionex.
You must use a reputable platform like Binance or Coinbase to avoid security risks. Then, fund your wallets with only what you can afford to lose. And learn the different crypto trading strategies, just as you would if you were trading any other commodity such as FOREX.
Securing Your Crypto Assets
There are a large number of exchanges for cryptocurrency, and so many of them have a lot of trades. But only a small number of them are really safe. Kraken, Gemini, and Coinbase are some of the best online (hot) wallets you can use. However, it’s best to store your crypto in various wallets, ideally cold or USB hardware wallets that aren’t tied to any exchanges. As reliable as some software hot wallets are, cold wallets are better in almost every way, especially when it comes to security since you can’t even get to them through the internet.
The Risks of Crypto Investment
Unsurprisingly, the threat of greater regulation is probably the biggest risk Bitcoin and cryptocurrencies in general face. China, which has the second-largest economy in the world, made it a crime for its residents to mine or keep any cryptocurrency in 2021. This directly caused the peaking value to drop by a large amount. That’s because it changes so quickly and often by a lot in a short amount of time. When you invest in crypto, like with any other investment, you should be ready to lose how much you put in. Don’t gamble with your money.
Cryptocurrency as an Investment
Crypto is a sound investment if you want to be a part of the rise of digital currency. There are, however, a lot of risks involved. For example, this summer, the price of Bitcoin dropped by a lot, and it hasn’t gone back up yet. So, anyone who bought BTC before the drop lost a big chunk of their holdings. Still, Bitcoin is known to bounce back. And has always done better than expected, with its value reaching over $65,000 in the summer of 2021. In short, crypto is a good investment if you can handle it. But the volatility guarantees long periods of loss.
What the Heck are NFTs?
You may have heard of NFTs in relation to the blockchain. But they are not digital currencies. NFT stands for “non-fungible token.” An NFT is a unique digital asset that can be used to prove ownership of digital content like photos, videos, and songs. Some NFTs have sold for vast amounts of money. In March 2021, a piece by the artist Beeple sold for $69 million. The most common way to make money with NFTs is to sell them on marketplaces that are just for NFTs. OpenSea and Mintable are two great examples of marketplaces where you can trade NFTs.
Summary
The world of cryptocurrency is vast and complex. But you can simplify it by understanding how it works, how you can trade it, and the pros and cons of cryptocurrency trading.