Important Cryptocurrencies Other Than Bitcoin
Bitcoin has not only been a trendsetter, ushering in a wave of cryptocurrencies built on a decentralized peer-to-peer network, but also has become the de facto standard for cryptocurrencies, inspiring an ever-growing legion of followers and spinoffs.
Read The Projects Whitepaper
When youve found a cryptocurrency you like, the first thing you need to do is read the whitepaper.
A white paper is an authoritative report or guide that informs readers concisely about a complex issue and presents the issuing bodys philosophy on the matter. It is meant to help readers understand an issue, solve a problem, or make a decision.
Reading the whitepaper will give you two tremendous benefits:
Good Reasons To Invest In Cryptocurrency
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Experts Said Investing Small Amounts In Crypto Consistently Over A Long Period Would Help Beat Volatility
Even as policy uncertainties around cryptocurrency in India are far from over, some of them are worth considering for including in ones investment portfolio, according to experts. However, in current circumstances, the maximum amount to invest in crypto should not be more than 5-10% of ones total investment portfolio. That too should be the amount s/he may not regret losing.
Participating in Financialexpress.coms Manage your Money webinar on Crypto as an Asset Class on Wednesday , experts opined that investment opportunities in the cryptocurrency market would become more clear once proper regulations are in place.
The Government of India was expected to introduce a bill on cryptocurrency during the now-concluded Winter Session of Parliament. As per recent reports, the Government may now bring the bill to regulate cryptocurrency and crypto exchanges during the upcoming Budget Session of Parliament.
Investors Store Cryptocurrency In A Crypto Wallet
A crypto wallet is the central hub of cryptocurrency. Its where investors manage your crypto, and its where investors send and receive cryptocurrency from other people.
But what is it exactly? Well, its basically a software program that gives exclusive access to the crypto an investor owns place on the blockchain. Depending on whether the wallet is hot or cold , investors can carry their wallet on a mobile device or an external drive.
Keep in mind: crypto wallets dont store cryptocurrency themselves. They store a public and private key, both of which allow investors to claim the cryptocurrency on the blockchain .
To give you a deeper dive: the public key is like a bank account number. Investors give it to other users in order to receive cryptocurrency. A private key is like a PIN number. It is used to unlock transactions, prove ownership of crypto coins, and ultimately spend or trade them. Note: never under any circumstance give away this private key to another user. If someone has a private key, they can spend the crypto in the associated account.
When you own cryptocurrency, youre basically saying you have the private key to prove the crypto is yours. Anyone on blockchain can look at the cryptos public key to verify that you are indeed the owner. Andto bring it all homeyour crypto wallet keeps your public and private keys extremely safe.
Crypto wallets come in a few different forms, including:
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Can You Lose All Your Money In Bitcoin
Yes you certainly can. Crypto is very risky and not like conventional investing in the stock market.
Bitcoins value is based purely on speculation. This is different to company stocks where the share price will move depending on how the business is performing.
Important: Cryptocurrencies are unregulated by the UK watchdog, the Financial Conduct Authority.
There are three main ways to lose all you money with bitcoin:
- The value plummetsand you sell: crypto is volatile with its price determined by sentiment. Though technically you only lose money if you sell an investment for less than you bought it for. This is known as crystallising your losses.
- Your memory: experts estimate 20 per cent of all cryptocurrency has either been forgotten about or lost with a current value of around $140billion, according to Crypto data firm Chainalysis
- Cyber crime: hackers and scammers are thought to steal around $10million worth of cryptocurrency every day, according to Atlas VPN
Some people choose to take their holdings offline and store it in a physical device called a cold wallet, otherwise known as a hardware wallet or cold storage similar to a USB stick. While this protects from online attacks you risk losing your holdings.
As with any investment, do your due diligence and dont pin all your hopes on one company or one cryptocurrency.
Spread your money around so you spread the risk and only invest what you can afford to lose.
Best New Cryptocurrency To Invest In 2022
It is a great time to look at the 5 Best New Cryptocurrency to Invest In 2022 and beyond. This is because 2021 has been great year for the crypto industry with lots of great news for cryptocurrency enthusiasts.
With most top-ranked cryptocurrencies led by the big cryptos Bitcoin and Ethereum recently hitting new all-time highs , the overall crypto market capitalization has crossed the $3 trillion mark at one point.
This article details 5 best new cryptocurrencies to invest in 2021 including information on the soft launch and pre-sale for a brand-new world lottery token called LuckyBlock.
The key to investing in any cryptocurrency is to read and learn about the project so as not to get tricked and lose money. Doing your own research will allow you to make informed assessment as you take your time to identify the cryptocurrencies with the potential for high sustainable returns.
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What Are The Fees When Buying Bitcoin
If you want to buy and sell bitcoin, there are usually fees to pay, such as:
- Transaction fees
Investment companies that are showing an interest include:
- The worlds largest asset manager, BlackRock, opened two of its funds to the possibility of investing in bitcoin futures
- UK based Ruffer Investment Management added bitcoin to its multi-asset portfolios before pulling out five months later with a $1.1B profit
- In December 2020, one of the worlds biggest index providers, S& P Dow Jones Indices announced it would launch indexing services in 2021 for over 550 of the top traded cryptocurrencies.
The Bank of England and other central banks are exploring the possibility of their own central bank-backed digital currencies.
As more institutional investors get on board with crypto assets for capital gains, this could help to calm dramatic price moves.
Investing In Meme Coins 3 Things Every Crypto Trader Should Know
Before you go apeing into the latest inu coin, here are a few tips on how to invest in meme coins safely.
Thug life meme glasses
The concept of meme coins has become one of the most talked-about investment opportunities in the crypto space, with shiba inus 50,000,000% price gain in the last 12 months serving as a reminder of the potential profitability of these internet trend-inspired coins.
And while the huge upside potential of these assets and their seemingly innocent animal-centric mascots are hard to ignore, its important to note that investing in meme coins is an incredibly risky venture and can often result in massive losses through fraud, hacks and exploitation. Not to mention, the usual losses incurred by jumping on the bandwagon due to fear of missing out and watching your new investment plummet as the meme mob moves onto other shiny objects are also concerns.
So, the question is, how do you safely invest in these tokens?
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Look Out For Obvious Signs Of Scam
Good coins have a transparent technical vision, an active development team, and a lively, enthusiastic community. Bad coins are not transparent, promote fuzzy technical advantages without explaining how to reach them, and have a community that is mostly focused on getting rich quickly. Perhaps the worst kind of cryptocurrencies are MLM coins like the now infamous scam Bitconnect.
We will talk more about Bitconnect in a bit. For now, here are some of the more obvious signs of scam.
It really goes without saying that the success of a project is directly related to the credibility of the team. Lets put it like this: if you are investing your money into a company, wouldnt you want to know that the company is in good hands and that your money is going to be appreciated considerably?
One of the most successful new projects of the current 2020-2021 market cycle is Uniswap. Although created in 2018 by ex-Siemens engineer Hayden Adams, Uniswap saw incredible success later on in 2020-2021. In March of 2021, it was generating fees of approximately $2-3 million dollars daily for liquidity providers who create a market for buying and selling on the platform.
Now, compare that to this team:
Yesyour eyes are not deceiving you, thats Ryan Goslings photo on the team page.
Of course, most of the time, bad investment advice wont be this easy to detect. But there are steps you can take to thoroughly research the projects team and ensure their credibility.
Ways To Invest In Bitcoin
Buying the coins on a cryptocurrency exchange is the most common way of investing in bitcoin.
But there are other options:
Buy shares in bitcoin-related companies
You could invest in cryptocurrency exchanges or even buy shares in companies that are accepting bitcoin as payment.
You could invest in a bitcoin exchange traded fund ETF. This copies the price of the digital currency, allowing you to buy into the fund without actually trading bitcoin itself.
Invest in blockchain technology companies
You could invest in the blockchain network . For example, tech platform Solana claims to be the fastest blockchain in the world.
Several investment companies are launching bitcoin funds.
It will still be volatile, but it could be easier to sell your investment and get your money back than investing directly.
There are also funds that have some exposure to bitcoin as well as traditional assets like and bonds.
These are a form of financial derivative that gives you the right to buy or sell bitcoin at a set price before a certain date of expiry.
Unlike buying Bitcoin cryptocurrency outright, bitcoin options enable you to take a speculative position on the future direction of a market price.
You would buy a call option if you believe the market price would increase:
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How To Pick A Cryptocurrency To Invest In
Before you go ahead and buy some coins or tokens just because somebody says it’s a good investment, it will pay to do some research.
First of all, it’s important to understand that picking a good cryptocurrency is not like picking a good stock. A stock represents ownership in a company that creates profits for its shareholders, or at least has the potential to do so. Owning a cryptocurrency represents ownership in a digital asset with zero intrinsic value.
What makes a cryptocurrency increase or decrease in price is simple supply and demand. If there’s increased demand and a limited supply increase, the price goes up. If supply becomes constrained, price goes up, and vice versa. So, when evaluating a cryptocurrency, the most important questions to answer are how the supply increases, and what will drive demand for the coin higher.
You can answer those questions by reading the white paper that a cryptocurrency team publishes to attract interest in their project. Look at the roadmap for a project and see if anything could spark an increase in demand. Research the team behind a project and see if they have the skills to execute their vision. Try to find a community of people already investing in the cryptocurrency and gauge their sentiment.
What Are The Types Of Cryptocurrency
Before cryptocurrency investing, it is essential to know the types. There are many different types of cryptocurrency systems that you can invest in. Bitcoin is arguably the grandfather of all crypto. It has been around for over 10 years and its the largest cryptocurrency system in the world, with a market capitalization of about $128 billion. Here are some of the other cryptocurrency you can buy:
Litecoin: Created by a former Google employee, Litecoin is very similar to Bitcoin, but has shorter transaction times and lower fees.
Ethereum: Its a cryptocurrency, but the main focus is on purchasing applications without having to pay a middleman .
Ripple: This is a cryptocurrency that doesnt use blockchain technology. Its mostly used by corporations to move large sums of money.
Cardano: This is a blockchain-based cryptocurrency thats used primarily to store private data.
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Why Are There So Many Cryptocurrencies
The majority of cryptocurrencies today are derived in some form or another from Bitcoin, which uses open-source code and a censorship-resistant architecture. This means that anybody can copy and tweak the code and create their own new coin. This also means that anybody is free to join its network or transact in it.
The 5 Best Coins To Invest In 2021 And Where To Get Them
In such a large crypto market, which accounts for trillions of dollars, you can be overwhelmed when youre first getting started. What are cryptocurrencies or digital coins like qtum coin? Are coins a good investment? How do we decipher which are the best coins to invest in? Let us help you to answer those questions.
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How To Invest In Cryptocurrencies
Once you’ve found a cryptocurrency you think will make a good investment, it’s time to start buying.
The first step is to open an account with a cryptocurrency exchange. Most stock brokers don’t support trading in cryptocurrency. Coinbase is one of the most popular and beginner-friendly exchanges in the U.S. Other options include Gemini, and newer brokers such as Robinhood and SoFi support crypto. Just be sure the exchange you want to use also supports the cryptocurrency you want to buy.
Once you’ve funded your account with fiat currency, you can make an order to buy your cryptocurrency. Orders on an exchange work the same way as orders in the stock market. The exchange will match your buy order with someone making a sell order at the same price and make the trade.
Once your trade is complete, the exchange will hold your cryptocurrency for you in a custodial wallet.
Buying cryptocurrency is the easy part. As a crypto investor, you have to be prepared for volatility. Crypto, in general, is more volatile than traditional asset classes such as stocks. Price swings of 10% or more in just a few hours are very common.
Additionally, you should consider how much of your portfolio you ultimately want to allocate to a specific cryptocurrency and to the asset class in general. With the volatility of crypto, be sure to give yourself wide bands of acceptable allocations. If your investments fall out of those bands, be sure to rebalance.
Do You Have To Pay Taxes On Cryptocurrency
If you buy and sell coins, its important to pay attention to cryptocurrency tax rules. Cryptocurrency is treated as a capital asset, like stocks, rather than cash. That means if you sell cryptocurrency at a profit, youll have to pay capital gains taxes. This is the case even if you use your crypto to pay for a purchase. If you receive a greater value for it than you paid, youll owe taxes on the difference.
Also Check: Do Crypto Exchanges Report To Irs
What Is Binance And Can I Still Use It In The Uk
The UK financial watchdog has blacklisted cryptocurrency exchange Binance and banned it from carrying out any regulated activity over concerns about its money laundering controls.
The regulator has also ordered the company to stop any form of advertising in the UK.
Binance isnt based in the UK, so the British regulator doesnt have the power to stop investors from buying and selling cryptocurrency using the exchange. However exchanges do have to register with the FCA to operate in the UK.
This is a clear warning that investors should be very cautious.
The Track Record Of The Development Team
Those familiar with the crypto industry know that reputation is a vital factor to consider when determining the viability of a product or platform. Hence, it is advisable to unravel the identities of the core contributors of the project and their track records. Note that it may be impossible to find information about the members of the development team due to their decision to remain anonymous. In such cases, you can base your research on the design decisions of the team, especially tokenomics.
Tokenomics refers to the token distribution of cryptocurrencies. Be wary of meme coins where a single entity controls a significant portion of the tokens total supply. Such digital assets are prone to experience a price slump if the major token holder decides to dump their coins. Therefore, it is advisable to go for a meme coin whose circulating supply is not concentrated among a handful of investors.
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