Introduction: To Invest in Cryptocurrencies.
The first cryptocurrency which comes into the existence was Bitcoin which
was built on Blockchain technology and probably was launched in 2009 by
a mysterious person Satoshi Nakamoto. At the time of writing this blog, 17
million bitcoin had been mined and it is believed that a total of 21 million
bitcoin could be mined. The other most popular cryptocurrencies are
Ethereum, Litecoin, Ripple, Golem, Civic, and hard forks of Bitcoin like
Bitcoin Cash and Bitcoin Gold.
It is advised to users to not put all their money in one cryptocurrency and
try to avoid investing at the peak of the cryptocurrency bubble. It has been
observed that the price has been suddenly dropped when it is at the peak
of the crypto bubble. Since cryptocurrency is a volatile market, users must
invest the amount they can afford to lose. There is no control of any
government on cryptocurrency as it is a decentralized cryptocurrency.
Steve Wozniak, Co-founder of Apple predicted that Bitcoin is real gold and
it will dominate all the currencies like USD, EUR, INR, and ASD in the
future and become a global currency in coming years.
Why and Why Not Invest in Cryptocurrencies?
Bitcoin was the first cryptocurrency that came into existence and thereafter
around 1600+ cryptocurrencies has been launched with some unique
feature for each coin.
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Some of the reasons which I have experienced and would like to share,
cryptocurrencies have been created on the decentralized platform - so
users don't require a third party to transfer cryptocurrency from one
destination to another one, unlike fiat currency where a user needs a
platform like Bank to transfer money from one account to another.
Cryptocurrency is built on very safe blockchain technology and has almost
nil chance to hack and steal your cryptocurrencies until you don't share
some critical information.
You should always avoid buying cryptocurrencies at the high point of the
cryptocurrency bubble. Many of us buy cryptocurrencies at their peak in the
hope to make quick money and fall victim to the hype of the bubble and
lose our money. Users should do a lot of research before investing money.
It is always good to put your money in multiple cryptocurrencies instead of
one as it has been noticed that few cryptocurrencies grow more, some
average if other cryptocurrencies go in the red zone.
Cryptocurrencies to Focus
In 2014, Bitcoin holds the 90% market and the rest of the cryptocurrencies
holds the remaining 10%. In 2017, Bitcoin is still dominating the crypto
market but its share has sharply fallen from 90% to 38%, and Altcoins like
Litecoin, Ethereum, and Ripple have grown rapidly and captured the most
of the market.
Bitcoin is still dominating the cryptocurrency market but is not the only
cryptocurrency that you need to consider while investing in cryptocurrency.
Some of the major cryptocurrencies you must consider:
- Bitcoin.
- Litecoin.
- Ripple.
- Ethereum.
- Tron.
- Civic.
- Golem.
- Monero.
Where and How to buy Cryptocurrencies?
While some years ago it was not easy to buy cryptocurrencies but now the
users have many available platforms.
In 2015, India has two major bitcoin platforms Unocoin wallet and Zebpay
wallet where users can buy and sell bitcoin only. The users have to buy
bitcoin from a wallet only but not from another person. There was a price
difference in buying and selling rates and users has to pay some nominal
fee for completing their transactions.
In 2017, the Cryptocurrency industry grew tremendously and the price of
Bitcoin grew spontaneously, especially in the last six months of 2017 which
forced users to look for alternatives to Bitcoin and crossed 14 lakhs in the
Indian market.
As Unodax and Zebpay are the two major platforms in India that were
dominating the market with 90% of the market share - which was dealing in
Bitcoin only. It gives the chance to other organizations to grow with other
altcoins and even forces Unocoin and others to add more currencies to
their platform.
Unocoin, one of India's leading cryptocurrency and blockchain companies
launched an exclusive platform UnoDAX Exchange for their users to trade
multiple cryptocurrencies apart from trading Bitcoin in Unocoin. The
difference between both platforms was - that Unocion was providing instant
buy and sell of bitcoin only whereas on UnoDAX, users can place an order
of any available cryptocurrency and if it matches with the recipient, the
order will be executed.
Other major exchanges available to trade cryptocurrencies in India are
Koinex, Coinsecure, Bitbns, and WazirX.
Users have to open an account in any of the exchanges by signing up with
an email id and submitting the KYC details. Once their account gets
verified, one can start trading coins of their choice.
Users have to research well before investing in any coins and not fall into
the trap of the cryptocurrency bubble. Users must research the exchange
credibility, transparency, security features, and many more.
All Exchanges charge some nominal fee on each transaction. There are
two types of charges - The maker fee and the Taker fee. Apart from the
transaction fee, one has to pay the transfer fee, if you want to transfer your
cryptocurrencies in another exchange or your private wallet. The charges
solely depend on the coins and exchange as the different exchange has
different price module for transferring the coins.
Major Altcoins other than Bitcoin
As mentioned above, Bitcoin is dominating the market with a 38% market
share followed by Ripple, Ethereum, Litecoin, and Bitcoin Cash. Exchanges
like UnoDAX, Bitfinex, Kraken, and 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 then you must buy them.
But, you must put the money in the market which 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 rule on when to buy your favorite cryptocurrency. But one
must research the market stability. You should not but at the peak of a
cryptocurrency bubble or when the price is crashing continuously. Always
best time is considered when the price is stable relatively at a low level for
some time.
Cryptocurrencies Storage Method
Before buying any cryptocurrency one must understand how to keep your
cryptocurrency safe.
Generally, all the exchanges provide a storage facility where you can keep
your coins safely. One must not share their user details, password, or 2FA
when you hold cryptocurrency on exchanges.
Paper Wallets, Hardware wallets, and Software wallets are some of the
channels where one can store their cryptocurrency.
Paper Wallet: A paper wallet is an offline cold storage method to keep your
cryptocurrency. It prints your private and public keys on a piece of a paper
where QR code is also printed. One has to just scan the QR code for future
transactions. Why is it safe? No need to worry about the hack of your
account or attack of any malicious malware. You just need to keep your
piece of the paper safe in a locker and if possible keep two to three pieces
of paper wallet all in your complete control.
Hardware Wallet: A hardware wallet is a physical device where you keep
cryptocurrency safe. There are many forms of hardware wallet but a
commonly used hardware wallet is USB. When you keep your
cryptocurrency in a hardware wallet you just need to keep in that mind that
you should not lose your hardware wallet as once it is lost you can not
retrieve your cryptocurrency.
One famous incident, where a person mined 7000+ bitcoin and stored it in
their hardware wallet and kept it with another hardware wallet. One day he
threw the hardware wallet in which he stored his cryptocurrency instead of
damaged hardware and he lost all his bitcoin.
What can buy from cryptocurrencies in India?
Most people assume that buying and selling of any cryptocurrencies are
just for the investment and getting the high returns in the long and short
term. Influencers and bitcoin investors are believing that in the coming year
Bitcoin will dominate all the fiat currencies and will be accepted as an
international currency.
Dell is one of the largest e-commerce businesses accepting bitcoin as
payment. Expedia and UNICEF are other examples.
In India, Sapna Book Mall was accepting bitcoin as payment using the
Unocoin merchant service. People were booking movie tickets through
BookMyShow or recharging their mobiles using the Unocoin platform. As
per the report, they have stopped the service but planning to start again in
near future.
Conclusion:
Cryptocurrency is one of the growing investment sectors and it has given
nice returns than real estate, gold, stock markets, etc in the past. You can
buy the cryptocurrency and hold for the long term to get nice returns or go
for the short-term for the quick profit as we have seen the growth of many
coins in 1000%+ in past. Since cryptocurrency is a volatile market and has
no control government on the industry. One must invest the amount in any
cryptocurrency that they can afford to lose.
You can store your cryptocurrency in a hardware wallet, paper wallet, or
software wallet if you don't wish to hold it in the exchange from where you
are trading.
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