Cryptocurrency is hot… And also kind of hard to wrap your head around at first. If you’re a beginner looking to dive into the world of digital currencies, it can be hard to know where to start. Here are some crypto basics to help you learn your way around.
1. Understand crypto basics
Before you invest a cent, it’s important to make sure you get the basic concepts of what cryptocurrency is and how it works. Cryptocurrencies (or ‘crypto’) are digital or virtual tokens that use cryptography (hence the name) for security, making them hard to counterfeit. Unlike other currencies, they’re usually decentralized and based on blockchain technology—they’re stored over a network of multiple computers. Bitcoin and Ethereum are the most well-known, but there are thousands of cryptocurrencies.
2. Choose the right platform for you
To start buying crypto, you’ll need to choose a platform to trade on (just like stocks). This could be a traditional exchange like Coinbase, Binance, or Kraken, or a decentralized platform like Uniswap. Each platform has pros and cons—they all have different fees, security measures, and some are easier to use than others. Do your research, read reviews, and try to start with a more user-friendly platform if you’re not super comfortable with new technologies.
3. Start small
The crypto market is infamous for its volatility. Prices can skyrocket, but they can also dive, and very quickly. As a beginner, it’s a good idea to start small. Only invest as much as you can afford to lose, and try to spread your investment across several types of cryptocurrencies to distribute the risk.
4. Secure your investments
Security is really important in the world of crypto. A lot of investors use digital wallets to store their currencies, and those can range from online services to actual hardware devices like hard drives. Make sure you use strong passwords and enable two-factor authentication for any crypto accounts or wallets you set up. Be very careful of phishing scams and only download apps or software from sources you can verify are legit.
5. Keep learning and be patient
The crypto market is constantly changing, with a steady stream of new developments, regulations, and tech advancements. Stay informed by following crypto news on reputable websites, joining online communities, and keeping an eye on market trends. Patience is also key; while it can be tempting to jump on a hot tip, steady and informed investing is usually the smartest approach.
