Introduction: To Invest in Cryptocurrencies
The first cryptocurrency to emerge was Bitcoin, which was based on Blockchain technology and was probably launched in 2009 by a mysterious person, Satoshi Nakamoto. At the time of writing this blog, 17 million bitcoins had been mined and it is believed that a total of 21 million bitcoins could be mined. The other most popular cryptocurrencies are Ethereum, Litecoin, Ripple, Golem, Civic, and Bitcoin hard forks like Bitcoin Cash and Bitcoin Gold.
Users are advised not to put all their money into one cryptocurrency and try to avoid investing at the peak of the cryptocurrency bubble. The price has been observed to have dropped suddenly when it is at the peak of the cryptobubble. Since cryptocurrency is a volatile market, users should invest the amount they can afford to lose as no government controls cryptocurrency as it is a decentralized cryptocurrency.
Steve Wozniak, co-founder of Apple, predicted that Bitcoin is real gold and it will dominate all currencies like USD, EUR, INR and ASD in the future and become a world currency in the next few years.
Why and why not invest in cryptocurrencies?
Bitcoin was the first cryptocurrency to emerge and since then around 1600+ cryptocurrencies have been released with some unique feature for each coin.
Some of the reasons I have experienced and would like to share, cryptocurrencies have been created on the decentralized platform, so users do not require a third party to transfer cryptocurrencies from one destination to another, unlike fiat currency where a user needs a platform like Bank to transfer money from one account to another. Cryptocurrency based on very secure blockchain technology and almost zero chance of hacking and stealing your cryptocurrencies until you share your critical information.
You should always avoid buying cryptocurrency at the peak of the cryptocurrency bubble. Many of us buy cryptocurrencies at the peak hoping to make a quick buck and fall victim to the bubble hype and lose their money. It is better for users to do a lot of research before investing the money. It is always good to put your money in several cryptocurrencies instead of one, as it has been noticed that few cryptocurrencies grow more, some on average if other cryptocurrencies go into the red zone.
Cryptocurrencies to focus
In 2014, Bitcoin owns 90% of the market and the rest of the cryptocurrencies own the remaining 10%. In 2017, Bitcoin still dominates the cryptocurrency market, but its share has fallen dramatically from 90% to 38%, and altcoins like Litecoin, Ethereum, and Ripple have grown rapidly and taken over the majority of the market.
Bitcoin continues to dominate the cryptocurrency market, but it is not the only cryptocurrency to consider when investing in cryptocurrency. Some of the top cryptocurrencies to consider:
Bitcoin
Litecoin
Vibe
Ethereal
thunder
Civic
golem
money
Where and how to buy cryptocurrencies?
While a few years ago it was not easy to buy cryptocurrencies, now users have many platforms available to them.
As of 2015, India has two main bitcoin platforms, Unocoin wallet and Zebpay wallet, where users can only buy and sell bitcoins. Users have to buy bitcoins only from the wallet, but not from someone else. There was a price difference in the buying and selling rate and users have to pay a nominal fee to complete their transactions.
In 2017, the cryptocurrency industry grew tremendously and the price of Bitcoin grew spontaneously, especially in the last six months of 2017, forcing users to search for Bitcoin alternatives and exceeded 14 lakhs in the Indian market.
As Unodax and Zebpay are the two major platforms in India that dominated the market with 90% of the market share, which only operated with Bitcoin. It gives another organization a chance to grow with other altcoins and even forced Unocoin and others to add more coins to their platform.
Unocoin, one of the leading cryptocurrency and blockchain companies in India, has launched a dedicated UnoDAX exchange platform for its users to exchange multiple cryptocurrencies in addition to trading Bitcoin on Unocoin. The difference between both platforms was that Unoción only provided instant buying and selling of bitcoins, while on UnoDAX, users can place an order for any available cryptocurrency and if it matches the recipient, the order will be executed.
Other major exchanges available for cryptocurrency trading in India are Koinex, Coinsecure, Bitbns, WazirX.
Users need to open an account on any of the exchanges by signing up with an email id and submitting the KYC details. Once your account is verified, one can start trading currencies of your choice.
Users should do their research well before investing in coins and not fall into the trap of the cryptocurrency bubble. Users should investigate the credibility of the exchange, transparency, security features, and much more.
All exchanges charge a nominal fee for each transaction. There are two types of fees: maker fee and taker fee. In addition to the transaction fee, one needs to pay the transfer fee if they want to transfer their cryptocurrency to another exchange or to their private wallet. The charges depend solely on the coins and the exchange, as the different exchange has a difference price module to transfer the coins.
Major Altcoins besides Bitcoin
As mentioned above, Bitcoin dominates the market with a 38% market share, followed by Ripple, Ethereum, Litecoin, Bitcoin Cash. Exchanges like UnoDAX, Bitfinex, Kraken, Bitstamp have listed many other coins like Golem, Civic, Raiden Network, Kyber Network, Basic Attention, 0X, Augur, Monero, Tron and many more. If any of the coins match your portfolio, you should buy it.
But you should put money into the market that you can afford to lose, as the cryptocurrency market is very volatile and no government has control over it.
When to buy?
There is no hard and fast rule on when to buy your favorite cryptocurrency. But one must investigate the stability of the market. It shouldn’t do so except at the peak of a cryptocurrency bubble or when the price continually crashes. The best time is always considered when the price remains relatively stable at a low level for some time.
Cryptocurrency storage method
Before purchasing any cryptocurrency, one must understand how to keep their cryptocurrency safe.
Generally, all the exchanges provide the storage facility where you can keep your coins safely. One should not share their username, password, 2FA details when holding cryptocurrencies on exchanges.
Paper Wallet, Hardware wallet, Software wallet are some of the channels where one can store their cryptocurrency.
Paper Wallet: The paper wallet is an offline cold storage method of holding your cryptocurrency. You print your private and public key on a piece of paper where the QR code is also printed. One just has to scan the QR code for their future transactions. Why is it safe? You need not worry about your account being hacked or any malicious malware attacking. You just need to keep your piece of paper safe in a locker and, if possible, keep two or three pieces of paper wallet under your full control.
Hardware Wallet – The hardware wallet is a physical device in which you keep cryptocurrencies safe. There are many forms of hardware wallet, but the commonly used hardware wallet is USB. When you keep your cryptocurrency in a hardware wallet, you just have to keep in mind that you should not lose your hardware wallet, because once it is lost, you cannot get your cryptocurrency back.
A famous incident, where a person mined over 7000 bitcoins and stored them in his hardware wallet and kept them with another hardware wallet. One day he threw away the hardware wallet in which he stored his cryptocurrency instead of the damaged hardware and lost all of his bitcoins.
What can you buy with cryptocurrencies in India?
Most people assume that buying and selling any cryptocurrency is only for investing and earning high returns in the long and short term. Bitcoin influencers and investors believe that in the next few years Bitcoin will dominate all fiat currencies and become accepted as an international currency.
Dell is one of the largest e-commerce companies that accept bitcoin as a form of payment. Expedia and UNICEF are other examples.
In India, Sapna Book Mall accepted bitcoins as payment through the Unocoin merchant service. People booked movie tickets through BookMyShow or recharged their mobile with the Unocoin platform. According to the report, they have stopped the service but plan to start it again in the near future.
Conclusion:
Cryptocurrency is one of the growing investment sectors and has given good returns than real estate, gold, stock markets, etc. in the past. You can buy the cryptocurrency and hold it long term for good returns or go short for quick profits as we have seen many coins grow over 1000% in the past. Since cryptocurrency is a volatile market and there is no government control over the industry. One should invest the amount in any cryptocurrency that one can afford to lose.
You can store your cryptocurrency in a hardware wallet, a paper wallet, a software wallet if you don’t want to hold the exchange from where you are trading.
