Cryptocurrencies are now part of our daily lives. If we do not use them, someone close to us knows about them and uses them regularly. But how to start investing in cryptocurrencies? Is it easy? Is it hard? Is it risky?
We will bring you the answer to these questions and many other things in this guide. As cryptocurrencies require a clear understanding from our side before investing in them, we should make sure that we know all the terminology and why they are so important for our finances.
Disclaimer: the information shared by AltSignals and its writers should not be considered financial advice. This is for educational purposes only. We are not responsible for any investment decision you make after reading this post. Never invest more than what you are able to lose. Always contact your professional financial advisor.
How to Start Investing in Cryptocurrencies?
Our goal is to learn how to start investing in cryptocurrencies, but there are some things you should know if you want to become part of the cryptocurrency market. Learning how to handle your virtual currencies and how to manage your funds is something very important, this is why you should pay close attention to it when you manage your funds.
1- Select a Cryptocurrency Exchange
The first thing you should do if you want to invest in cryptocurrencies is to open a cryptocurrency exchange account. This would be the most important step as you will have access to the cryptocurrency market in just some simple steps.
Cryptocurrency exchanges would not only let you handle your virtual currencies but would also be a key part of your engagement with the crypto space. Some exchanges would have additional features that make the whole experience even better.
Once you have selected a virtual currency exchange that operates in your region and that has the virtual currencies that you want to buy you can deposit funds and purchase Bitcoin (BTC) and many other virtual currencies.
The best crypto exchange would be the one that offers lower withdrawal fees and that accepts different payment methods. In this way, you will be able to buy Bitcoin and other virtual currencies using debit cards, credit cards or even bank transfers. That’s how easy it is to handle virtual currencies using exchanges.
2- Purchase a Hardware Wallet
If you have already selected your cryptocurrency exchange and you have purchased Bitcoin or other cryptocurrencies, now you need to make sure your funds are safe. Cryptocurrency exchanges are the easiest way for investors to acquire virtual currencies, but they are not the best in terms of security.
Over the last years, we have seen exchanges getting hacked by attackers that wanted to steal users’ funds. Million dollars worth of virtual currencies has been hacked from exchanges by attackers. This is why we should make sure that our funds are properly protected. But how to do so?
Investing in cryptocurrencies requires you to purchase a hardware wallet if you are a long term holder or download a software wallet if you are a cryptocurrency regular user. A software wallet can be downloaded to your smartphone or desktop computer. These are the most common wallets. They will let you protect your funds (you are the owner of your assets) and you will be responsible for them, no other third party.
A hardware wallet would be the best option if you handle larger amounts of digital assets. These are devices that store your private keys outside the reach of malicious parties. You can also use both a hardware wallet to hold most of your funds and a software wallet to manage your daily crypto needs.
3- Understand Decentralization
Decentralization is one of the most important topics in the cryptocurrency market. One of the main goals of virtual currencies is offering users the possibility to handle their money without having to rely on third parties such as financial institutions or banks.
This is why holding your private keys and understanding how they work is very important. Private keys give you control over your digital assets. That means that you can prove that you are the owner of your funds. If you lose your private keys, then you basically lose access to your funds.
That means that owning virtual currencies involves being responsible for what we do with our funds and how we manage them. If we lose our money, then there is no way to recover them. The best thing to do is double-check the addresses we use, making sure that our private keys are properly stored and that we only hold small amounts of digital assets in crypto exchanges.
