How to invest in cryptocurrencies

Investing in cryptocurrencies

There are currently hundreds of different cryptocurrencies out there, and it can be hard to define them all with a single definition. But, in a nutshell, a cryptocurrency is a digital currency that is encrypted and usually decentralised. In addition, cryptocurrencies - often referred to as cryptos - are based on blockchain technology, a permanent and decentralised ledger system.

Although Bitcoin is the most popular cryptocurrency, it has led to the creation of many alternatives, known as "altcoins". There are all kinds of alternative cryptocurrencies - some are close variants of the Bitcoin, such as Bitcoin Cash, while others have an emphasis on privacy, such as Monero and ZCash.

Cryptocurrency trading

There are several cryptocurrency exchanges out there, such as Skrill or Binance. These exchanges allow you to buy cryptocurrencies like Bitcoin and Ethereum, but if you want to buy altcoins, chances are you will need Bitcoins or Ethereums to make that purchase. Typically, you can't buy altcoins with regular fiat money (that's how cryptocurrency traders refer to paper money, such as British pounds or dollars). But this could change in the future.

Why invest in cryptocurrencies?

Investing in cryptocurrencies features many benefits. Here are some of the main reasons why people choose to buy them.

Easy and secure transactions: Thanks to cryptocurrencies, it is easier than ever to send money to someone else securely. Cryptocurrencies are exchanged using both public and private keys. This feature provides security and helps keeps transfer costs low.

Transparency: Cryptocurrencies are based on blockchain technology which involves an online ledger that facilitates transaction verification and encourages all users to be honest.

Potentially high returns: At this point, you probably know someone (or someone who knows someone) that has made a big investment in Bitcoin or another cryptocurrency. Although you won't become a millionaire by buying Bitcoins, you can still obtain fairly high returns. However, the prices of cryptocurrencies are very volatile. So invest only what you are willing to lose, and be prepared for the possibility that the value of your cryptocurrencies will collapse.

Here are a few articles to broaden your knowledge of cryptocurrencies and help you choose a way to invest in this market:

Cryptocurrencies
Cryptocurrency trading: CFDs, market exchanges

There are two types of cryptocurrency exchanges: Centralised EXchanges (CEX) and Decentralised EXchanges (DEX).

Bitcoin

What are Bitcoins (BTC)?

Bitcoins are the world's first cryptocurrency. This decentralised digital currency (virtual money) can be used to pay for goods/services.

Bitcoin miner

What is Bitcoin mining?

Bitcoin mining is performed on very powerful computers that solve math problems.

Cryptocurrency fork

What is a cryptocurrency fork?

A cryptocurrency fork is a modification of the blockchain protocol that the software uses to decide whether a transaction is valid or not.

Binance

Review of Binance's cryptocurrency exchange

Launched in 2017, Binance is a trading platform that allows users to buy, sell and trade cryptocurrencies.

Skrill

Forex and cryptocurrency trading with Skrill

Skrill offers over 100 deposit options, so you can choose your preferred methods to buy cryptocurrencies.

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