Invest in cryptocurrencies and reap the million-dollar benefits
Since it began in 2010 through Bitcoin, cryptocurrencies have been one of the hottest investments to get in the 21st Century. Having gone so far from their humble beginnings, cryptocurrencies are now worth millions! Transforming it from a niche phenomenon to a sensation championed by some of the biggest names in finance and technology.
To see why everyone loves cryptocurrency and how it made them into millionaires, we at Cash Adda will be teaching you all about investing in cryptocurrency.
Definition of cryptocurrency
Cryptocurrency is a medium of exchange maintained by an online network of users and is divorced from centralized authorities like banks and governments. Investors can start using and purchasing through exchange sites, payment applications, peer-to-peer marketplaces and various other places.
How to begin investing
To start enjoying the benefits of cryptocurrency, follow the steps below:
Find a crypto exchange
To be part of the growing cryptocurrency market, search for a crypto exchange to do crypto trading activities in. Once an investor has found a crypto exchange marketplace, they need to search for trustworthy traders that offer a variety of cryptocurrencies.
Great crypto exchanges to visit are the following:
- Cash App
Create an account
Before the crypto exchange allows you to make any purchases, you need to have an account with them first. To accomplish this, submit your documents like your IDs, debit and credit card information, and allow the system verification of your identity.
Deposit your money
Once the exchange site has verified your identity, you may now place funds into your account on the site. Since you’ve already placed your credit/debit card details into their system, this is where the exchange will be getting the funds for your new investment.
Choose a cryptocurrency to invest in
Now that all the necessary information has been placed, you can now choose which currency to invest in. Below are some of the most important cryptocurrencies available in the market, their current market capitalization and corresponding values per token at the time of writing.
- Market Capital: $821 billion
- 1 token cost: $66,362.30.
- Market Capital: $353 billion
- 1 token cost: $4,218.54.
- Market Capital: $68 billion
- 1 token cost: $1.01.
- Market Capital: $67 billion
- 1 token cost: $2.18.
Binance Coin (BNB)
- Market Capital: $64 billion
- 1 token cost: $496.84.
- Market Capital: $44 billion
- 1 token cost: $1.14.
- Market Capital: $41 billion
- 1 token cost: $12,256.
USD Coin (USDC)
- Market Capital: $31 billion
- 1 token cost: $0.9999.
- Market Capital: $28 billion
- 1 token cost: $44.18.
- Market Capital: $26 billion
- 1 token cost: $$0.25.
Placing your cryptocurrencies in secured crypto wallets
Choosing the best wallet for your cryptocurrency is one of the challenges of using them. There are a lot of these wallets to choose from, so it may be confusing to know which of them is the most reliable.
To avoid this confusion, below are things to remember when getting yourself a crypto wallet.
What is a crypto wallet?
A crypto wallet is characterized as high-tech storage for storing not only your cryptocurrencies but for your public and private keys as well. These wallets also give you the ability to send, receive, and spend your crypto tokens.
Types of crypto wallets
Hot and Cold are the two variants of crypto wallets. They both have their own benefits and features that can be best suited for an investor’s needs.
Below are the things they can do:
A Hot wallet is software accessible throughout all your devices. They allow investors to make transactions at any place where there’s an internet connection.
However, due to their globally connected nature, these wallets are more susceptible to online attacks when compared to their cold counterparts, especially if you’re using a VPN-less browser. A hot wallet is an ideal wallet to have for storing small amounts of funds.
Here are the type of hot wallets to be used and where they’re accessible:
Exchange wallet – This wallet is ideal for beginners. When choosing to store tokens in a centralized crypto exchange wallet, the host exchange receives access to an investor’s information, unlike that of a decentralized one.
Mobile wallet – A mobile wallet is accessed through a mobile device. The unique touch systems of mobile phones allow investors to use a touch-to-pay system or QR codes to make transactions. For traders and crypto transactions, a mobile wallet is the best hot wallet to have.
Web wallet – Using this wallet allows users to access their cryptocurrencies through desktop or laptop internet browsers. For those trading cryptocurrencies for a living and who need access to the full features of exchanges, this software is the ideal choice.
This is a hardware device that is used to store cryptocurrencies offline. These need to be plugged into a computer for the cryptocurrencies to be accessible. These wallets are ideal for investments of a larger scope because of their offline nature.
Though cold wallets are less impervious to online attacks, the device can still be damaged or stolen. Once you’re done making transactions, store your device in well-guarded and safe spaces. Below are the forms of cold wallets and how investors can use them:
Hardware wallet – A hardware wallet is usually in the form of a USB that allows you to access your cryptocurrencies through your computer. The best hardware wallet brands include Ledger, Trezor and KeepKey.
Paper wallet – This cold wallet is holding your cryptocurrency address and your private key in the form of a QR code. Websites like bitaddress.org are used as a crypto QR code generator. Once your address and private key are generated, print them on a piece of paper.
Increasing your crypto wallet’s safety
Once you’re familiarized with the different crypto wallets, keep them safe using the following tips:
Back up your hot wallet
The reliability of your computers and mobile devices can’t always be guaranteed since they can be stolen, hacked or destroyed. For this reason, you need to frequently back up your wallet information to keep all your hard-earned tokens with you.
To accomplish this, duplicates of your wallet’s wallet.dat files must be created and placed within multiple password-protected devices like an extra flash or hard drive.
Find and use reliable crypto wallet platforms
There are a lot of crypto wallets out there, however, not all of them are reliable. So before using one of these platforms, ensure they have a trustworthy reputation. Ideal hot wallet brands include Coinbase, Cash App, and Bisq.
On the other hand, cold wallets must only be bought from reliable brands. Check their reviews online and see if they have a reliable level of security.
Frequently update your wallet system
There are always brand-new hacking methods created to steal cryptocurrencies. To add an additional layer of security to your wallet, install system updates to your wallets.
So when a notification reminds you to update your wallet, install them immediately. Never under any circumstance should you ignore these notifications. If you do, you will lose your hard-earned tokens to hackers.
No matter the wallet you’re using, use encrypted browsers to keep them safe.
Use a multi-signature locking system
When two or more investors, called ‘co-payers’, share a single crypto wallet and agree to co-sign each other’s transactions, this system is created. When choosing a co-payer, make sure they’re someone who’s trustworthy.
Even if an online attacker managed to get a hold of one of your keys, the people behind them won’t be able to access the crypto wallet because it will need approval from your co-payer.
Make use of a two-factor authentication
For those who prefer to have sole access to their wallet, a two-factor authentication system is a must. Meaning, you will use both a password and an additional code sent to your email or phone number to be able to access your crypto wallet.
This system gives investors superior security, so take full advantage of it.
Hot vs. Cold: Which reigns as the best wallet?
Choosing a crypto wallet is dependent on your risk tolerance, goals, and your cryptocurrency knowledge. Keep in mind your personal preferences to be able to choose the wallet that can support your activities.
To guide you in choosing, here are some things to remember:
- To keep your cryptocurrencies in storage long-term, a cold wallet is an ideal option. Due to it being offline, online attacks won’t be a common problem.
- For those trading often and making a lot of crypto-based transactions, a hot wallet can give you these needs because of how they give users flexibility and accessibility to crypto tokens.
- For those new to crypto investments, using a crypto wallet with basic features is a good way to get yourself familiarized with the ins and outs of different storage available for digital assets.
Cryptocurrencies have changed the lives of many investors. With their small capital, they’ve grown to become millionaires and are enjoying the fruits of their hard-earned tokens. If you want to see yourself with financial freedom like them, frequently visit our investment blogs here at Cash Adda.