How To Start Investing In Cryptocurrency For Total Beginners

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You would have to be living under a rock to both not have heard about and developed an interest in cryptocurrency.

Crypto is changing how we think about money, transactions, investing, and so much more. And many financial experts predict that this is just the beginning of the crypto revolution.

The number one question people have about cryptocurrency is how can you buy and sell it? In this article we will cover the best platforms to invest in cryptocurrencies including:

  • Bitcoin
  • Ethereum
  • Dogecoin
  • And many more

Skip to the end of this article for FAQs on cryptocurrency in general that you might have. There is so much to know and learn!

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FAQs On Cryptocurrency

What Is Cryptocurrency?

Cryptocurrencies are digital currencies not associated with any specific nation or government as has been traditionally true for currencies. There are many different cryptocurrencies, and they work using a technology called the blockchain. Blockchain is a decentralized technology spread across many computers that manage and record transactions. Part of the appeal of cryptocurrencies for many people is the blockchain technology that supports them, while other people see them as a great investment opportunity.

How Many Cryptocurrencies Exist?

Cryptocurrency is more than just Bitcoin., a market research website, there are more than 10,000 cryptocurrencies that are currently in existence. The total value of all cryptocurrencies on September 1, 2021, was more than $1.9 trillion — down from the April high of $2.2 trillion, according to CoinMarketCap.

Why Have Cryptocurrencies Generated So Much Interest?

There are a variety of reasons why cryptocurrencies have generated so much interest in recent years. A few of them include:

  1. Many people believe that cryptocurrencies represent the future of currencies
  2. Fans of cryptocurrencies like that they remove governments and central banks from managing currencies, particularly because this removes the risk for inflation
  3. Other fans applaud the technology behind cryptocurrencies — the blockchain — because the decentralized system is seen as more secure than other payment systems 
  4. Others see cryptocurrencies as an investment opportunity — something that is going to go up in value over time

Are Cryptocurrencies An Investment?

Many people view cryptocurrencies as an investment opportunity. Because cryptocurrencies are not going to ever generate profits — like a company would — to make money off of a cryptocurrency someone has to be willing to pay more for it than you did. While many in the investment community have been trying to discourage people from seeing cryptocurrency as an “investment,” others speculate that as cryptocurrencies gain more acceptance, their value will increase.

Holding cryptocurrencies as an investment is not for the faint of heart. Take Bitcoin as an example which has fluctuated greatly in just the last year — ranging from $30,000 to $65,000 for a coin just in 2021 so far.

Is It Legal To Buy Cryptocurrencies? 

It is legal to buy cryptocurrencies in the US, though it’s not legal in all countries like China, which has essentially banned their use. It is important to note that while cryptocurrencies are legal in the US, the regulations around cryptocurrency have the potential to change as do the tax implications for buying and selling cryptocurrency. 

What’s The Difference Between A Crypto Wallet And An Exchange

There is a difference between holding crypto in the exchange in which you bought it and holding it in a “wallet.” A crypto exchange is a platform that lets you buy and sell cryptocurrencies like Bitcoin, Dogecoin, Ether, and others. A crypto wallet is essentially a software program that lets you store crypto coins. Let’s say you bought a certain amount of Bitcoin. Since it has no physical form, how do you safely keep it? This is where you need an online storage facility. That’s the function a crypto wallet serves. 

*All investments are risky and may result in the loss of capital. Cryptocurrencies are largely unregulated in most regions.