These days, there are actually many different crypto assets available to purchase and hold. This guide will go over the basics of cryptocurrency, as well as coins you should consider purchasing.
You can define cryptocurrency simply as a digital currency, that works through something known as the cryptography. Within cryptography technology, you can find unique and one-off tokens, or coins, that cannot be copied or spent more than once.
Cryptocurrencies are mined through something known as the blockchain, where the aim is to mine enough to be able to make your own block. With cryptocurrency, you are able to work outside of bank and financial regulations. This means there are no extra fees or penalties that you would find in traditional financial services.
Of course, in recent years, the crypto world has had to start regulating its own services, and has become a very secure way of investing, due to security protocols. Crypto is stored in a secure wallet, that is encrypted for protection. The marketplaces that are designed for selling and purchasing crypto are scam free, so just be aware of external sites.
Bitcoin was the first major crypto asset to be introduced into the world, shortly after the global economic crash of 2008. Bitcoin operates over a global shared network, through thousands of individual nodes.
In many ways, the blockchain on which it operates, is much like a brain, with each little cell being compared to a computer that connects to it, assisting in general processes and storing unique transactions. The inventor of Bitcoin goes by the pseudonym of Satoshi Nakamoto, leaving his real identity a mystery.
Ethereum is easily one of the biggest coins you can purchase on the market, usually in second place behind Bitcoin. With this token, it works in a more specific part of the blockchain.
As you’d expect, it does still work through a decentralised distributed ledger, as most crypto assets do. The difference here is, that this technology specialises in the creation of other cryptocurrencies and digital assets. This makes it not only an interesting token and technology, but a valuable asset in the crypto world.
Usually, if any cryptocurrency is doing well, such as Bitcoin, then Ethereum will also do well, as it contains the DNA and blueprint for these tools.
Why You Should Diversify Your Digital Assets
As mentioned, Ethereum is an important token as its core purpose is for the creation and management of other digital applications, making it important to hold as in your asset collection.
If you haven’t already, you should really think about diversifying your digital assets. Even if you primarily only deal with cryptocurrency, as you can read in this article, there are actually a wide range of different coins and tokens that can turn a profit.
Of course, Bitcoin is one of the biggest coins out there, but if you invest all your crypto money into it, and it ends up crashing, you could be left with nothing. If you’re new to the crypto investing world, then you may not even be able to purchase a decent amount of Bitcoin, due to how expensive the coin has become.
If you did have enough to spend on a whole Bitcoin, which can sit anywhere from £20k-£50k depending on the state of the market, you’re way better off spreading that money across multiple coins.
You should still do your own research with individual coins, as you will need a buying strategy of some kind to get you through the crypto world. If you’re new to the market, consider spending a few weeks beforehand watching the market, to see when it rises and lowers, as well as observing trends that can affect prices. This way, you’ll be able to put yourself in the best position to be able to trade.
There are many different ways in which for you to purchase digital assets. The most common of which is through a global marketplace, where you can get private ones, or peer-to-peer.
Private marketplaces are more likely to be where you first start, here it’s much like a normal stock market, where a user will buy and sell crypto anonymously, according to the latest global prices. It is also considered a more private affair for users, where they can purchase either with a debit transfer, or even PayPal.
Peer-to-peer marketplaces are more personal, where users will be able to see each other’s usernames, as well as reputation and location. Prices and quantity can fluctuate here, where it is up to the seller to dictate the price of their own personal collection.
Many individuals have started to purchase as much Bitcoin and other cryptocurrencies as they can, in the hope that it will one day become a major financial outlet, used by the public, governments and retailers alike. Already, some retailors have started to accept Bitcoin as a method of payment, and governments and banks have started purchasing crypto to hold as an asset.
Digital assets are becoming more popular. One new method of turning a profit when it comes to your crypto asset, is to use a high yield staking service, such as the one offered by Unagii. Their service enables you to earn rewards on your crypto assets, as well as being able to delegate governance votes in order to help maximise your holdings through an easy-to-use interface.
You may or may not be familiar with Dogecoin. This coin rose to mainstream media after Tesla CEO Elon Musk started to tweet about it, in a joking way, enticing his followers and fans to purchase it. Whilst this was seen as a light hearted move to have fun with a meme, there’s no doubt that the CEO and company benefited from it.
Tesla themselves started to accept Bitcoin as payments for their cars, before pausing due to worries about the environment. There’s no doubt that they will eventually return to accepting Bitcoin, as Elon Musk is known for being a bit eccentric on the internet, and is known for his meme culture.
When many individuals started to buy the coin in small amounts as a joke, people realised that the price of it was increasing, and that there was a chance to make money. It’s a similar story to the GameStop investment story earlier this year, that saw people initially come in as a joke to invest, but actually rose the share price.
Since Elon pulled the plug on Bitcoin, the shares of Dogecoin dropped massively, but it’s still worth keeping an eye on, especially now that it’s at a low price.
This coin is known a stable coin. This means that it works slightly differently compared to other coins. This one primarily is used as a means to provide liquidity and a hedge for market volatility.
It still utilised blockchain technology, but you would find this coin backed against mainstream global economies such as the US dollar or the British Pound. These coins are also transparent, meaning that you can view the transactional history without jumping through any hoops.
Primarily, this coin is used within the digital security sector. These coins work within the blockchain, and work with a predictive technology that is backed against physical assets in the real world.