Cryptocurrency is one of the hottest topics today in terms of investment because of its fluctuating prices in the market. While this is evident, people who have little to no knowledge of cryptocurrency are clueless about what it means, what it is about and how it works. To know more about it, continue reading the following sections below.
What is cryptocurrency?
Cryptocurrency is decentralised digital money and uses blockchain technology to process transactions. To further elaborate, decentralised means there is no governing entity that controls the funds and facilitates the transactions in the network. The use of blockchain technology makes this possible since it is a public ledger shared among nodes of a computer network. In other words, cryptocurrency is managed by the people present in the blockchain.
Currently, there are thousands of different cryptocurrencies in circulation, and each one of them has a limited supply. This, in turn, increased their values tenfold, which made people treat their coins and tokens as a form of asset. Consequently, a marketplace for cryptocurrency has emerged where people can buy and sell their cryptos to anyone interested.
With cryptocurrencies treated as digital assets, more people are starting to get interested in getting a hold of a token or coin as an investment. However, it can be difficult for some since there are a plethora of choices to choose from. If this is your problem, learn how to choose cryptocurrency to invest in with these helpful tips and advice:
- Researching is key
The first thing you should do is conduct proper research about each cryptocurrency you’re considering. Doing this lets you find a lot of information about the topic you would like to know more about.
With cryptocurrency, there are different ways you can know more about the digital money you are eyeing on. One thing you should do is to read its white paper, which is a document that lists everything you need to know about certain crypto. This can include its purpose, technology, services and vision.
Another thing you can do is read reviews about the digital currency you want to have. With the help of the internet, people can easily share their thoughts, opinions and experiences about something, which is also applicable to cryptocurrency. Reading these will give you an idea of whether your preferred token or coin has a good reputation or not, which is important when choosing the right cryptocurrency.
- Understanding how the system works
Before you dive into the cryptoverse, you should completely understand how it works. This means that you need to study and research the technology it uses. In most cases, all cryptos use blockchain technology and the proof of work or stake systems. Learning what they are and how they function will help you become familiar with how everything works. Additionally, this step will also let you know if the crypto you are looking into offers convenience.
- Security and safety
Since cryptocurrency is related to money, you also need to consider the security and safety of your digital assets. This means that you have to decipher if your preferred crypto offers a great security service that will keep your money safe from online hackers. Nowadays, a lot of people are getting scammed by companies that pose as cryptocurrencies. That is why it is important to stay vigilant at all times and always take precautionary measures to protect yourself from online theft.
- Get to know the community of a crypto
Choosing the right cryptocurrency can be hard. Fortunately, checking the community of each token or coin will give you an idea of whether people are having a great experience. To do this, you can visit informative websites such as Reddit, Quora and Twitter. Here, you will see a lot of people giving out helpful information related to the crypto they are part of.
Seeing positive feedback and healthy discourse about crypto is proof that your preferred digital currency is the right one. Additionally, being part of a great crypto community will help you learn more about digital assets.
- Learning the roadmap of a crypto
Roadmaps are strategic plans that show people the distinct goal that requires a lot of steps before reaching it. This is important for business projects because it shows how a company is dedicated and ambitious in achieving its goals. In other words, it lets you know if the plans that they have are for a long term improvement.
With that said, you need to learn the roadmap of the crypto you prefer to see the developments for the coin or token. This can show you if your digital assets will increase in value after a few years.
The top 4 cryptocurrencies in the market
With these tips in mind, you now know how to choose cryptocurrency to invest in. For that matter, here are the top 4 cryptocurrencies in the market:
Bitcoin is the number 1 cryptocurrency that people are investing in because it’s the oldest cryptocurrency that a lot of users trust and the current price of $39,022.42. You can easily buy one from different trusted exchange sites and pay with your credit card or bank transfers.
Following Bitcoin is Ethereum, which is an open-source blockchain that supports smart contracts. Currently, purchasing 1 Ethereum is priced at $2,721.31.
- Binance (BNB)
Binance, the world’s leading crypto exchange site also has its coin known as the Binance Coin with BNB as its ticker symbol. Its market price today is $389.30 and a lot of experienced crypto investors recommend this as a starting point due to its high volatility.
- Cardano (ADA)
The ADA is Cardano’s cryptocurrency, which promises a bright future for its users as shown in their roadmap. As of now, one ADA is equivalent to $0.961, allowing you to invest in it in an instant.