What Is Cryptocurrency? Beginners Guide to Digital Cash

Cryptocurrency is an encrypted data string that denotes a unit of currency. Simply put, crypto is a type of digital currency that can be used to purchase a product or service, invest, and most other functions that can be done with hot cash.

Presently, It does not have a regulating body that oversees its operations. It is functioning without a central issuing authority. Hence, to manage the issuance of new units and maintain a proper record of transactions, it relies on a decentralized system. This decentralized system is based upon cryptography to ensure safe and ethical transactions.

As of now, there are over 15,000 different cryptocurrencies that are traded in the world. The number is constantly increasing with many companies issuing their own currencies, often called tokens, which can be used to buy their product and services.

Popular Cryptocurrencies Across the World

Given below are some of the most popular cryptocurrencies.

The most popular cryptocurrencies are:

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  1. Bitcoin- It is presently the most popular crypto. Due to the wide scale popularity, it has become synonymous with crypto. It is the first digital token that was launched in the year 2009. At present, it is considered a legal tender in El Salvador.
  2. Dogecoin- Started off as meme content, dogecoin has evo;ed to become the preferred crypto of many big shots such as Elon Musk and Mark Cuban.
  3. Solana- It was launched in the market only recently but is performing really well in the crypto market. It was launched in March 2020 and saw a major price rise of 17,500% in 2021.
  4. Ethereum- It has emerged as the first Bitcoin alternative in the virtual token sphere. Launched in 2015, it has become the second-largest player in crypto.

How to Invest in Cryptocurrency?

Crypto has become a buzzword both in the finance world and on the internet. Thanks to the ‘dogecoin’ meme, even Gen Z has become well aware of Cryptocurrencies. Some of them have even started investing in cryptos as a side gig

Investments in crypto might seem very lucrative, but it is a risky proposition. Although the crypto market is highly volatile, nothing can give you a sure-shot method to get good returns. It all comes with experience and gradual understanding.

In this section, we are listing down simple steps with the help of which you can embark upon the journey of crypto investments.

  1. The first and perhaps the most important step is to do proper research on the different types of cryptos and how they function. There are many cryptocurrencies that show up and disappear forever from the market. Therefore, it is very important to do an in-depth research about the crypto you want to invest in. It will safeguard you against fraud. For example, you can consider the Best Crypto Exchange in Australia for the most profitable options.
  2. After you have selected the crypto, you should collect resources to understand the risk that comes with crypto investments. The crypto market is one of the most volatile just like the share market. A slight mistake can throw your financial state off balance. As a beginner, you should ideally start with a very small amount and increase it gradually as you begin to understand the market well.
  3. After the risk assessment the next step is to buy the crypto. You can buy cryptos from the crypto exchanges. Alternatively, you can also get it from a friend, relative, or even a colleague who is willing to sell them. After buying, you will have to save them in the crypto wallets. Crypto wallets are software that securely stores your cryptocurrency.

Final Words

You are all set to make your first investment in crypto. However, owing to the volatility of the market, experts suggest that you should plan a diversified portfolio of investment and have a proper risk management plan to rely on.

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