The use of technology has changed the way we do things. There are new ways to work, communicate, shop, and even pay for goods. Many businesses and consumers are tilting towards contactless payment methods such as Apple Pay. Among many factors responsible for the change in payment method preference is the ease of getting your everyday need.
The new rave of digital currencies or what we know as cryptocurrency is gradually receiving global acknowledgment and acceptance.
At this point, it is safe to assume almost everyone has heard of Bitcoin. It was the first cryptocurrency to gain massive publicity, and now, other currencies are coming onboard.
While it is clear that several folks may have heard of the term before, many are still struggling to grasp the whole concept (tried explaining it to your grandma?) or come to terms with the fact that these currencies may wipe out the need for physical cash.
Anyways, in this post, we will tackle one of the big questions of how to invest your money in these digital currencies safely. So, jump right into it.
Basic Cryptocurrency information
Cryptocurrency is a peer-to-peer or person-to-person system that allows anyone to send and receive payments almost immediately without the need for a bank for verifications. So, rather than carry cash around, you can make payments from your digital wallet on your device.
While a few brows may be raised regarding safety in transactions, it is important to stress that these payments are tracked and recorded in a public register.The name cryptocurrency came about because encryption is used to verify transactions, and the purpose of encryption is to provide security and safety.
Is cryptocurrency secure?
Cryptocurrencies are built using blockchain technology. The blockchain describes how transactions are registered in “blocks” and time-stamped. It is a rather complex technical process making it less prone to hacks.
Two-factor authentication and SMS verifications are some of the ways you are protected when you make transactions.
Security measures are in place, but that does not mean that cryptocurrencies cannot be hacked. Several start-up cryptocurrency companies have been hacked and lost large sums of money.
The BBC reported sometime in 2021 of the biggest crypto heist worth over $500 million (see details here). This proves that lapses exist in the system as much as they do in the regular banking sector.
Four tips for investing in cryptocurrency securely
Nonetheless, if you have plans to invest in cryptocurrencies, below are some of the tips you should stick to
Read about crypto exchanges
Before investing a single penny, you need to read about crypto exchanges. Read anything and everything you can on the subject, the currency, the trading platform… everything!
When selecting a platform like Bitcoin Trader to place trades in the market, you need to consider how credible they are, read reviews and talk to experienced investors before jumping in.
Diversify investments
A good trading strategy for beginners and pros alike is: diversify your portfolio. Do not throw all of your money into Etherum, for instance, the biggest of the buss around it. There are thousands of options out there, so spread your money across them.
Be wary of Volatility.
The cryptocurrency market is volatile, which will have ups and downs. Despite that, one rule to live by if you are ready to trade is to hold. You never know when that currency that fell two days ago would rise and double your investment.
While many folks may not have this easy, it is best to try out other investments for your mental wellbeing.
Crypto is new, and the possibilities are enormous; however, do some research, invest carefully at first, and scale as you get better.