Beginners guide to investing in cryptocurrencies

This is not financial advice. Cryptocurrency is unregulated in the UK; profits may be subject to tax; and the value of any investment could fall.

In today’s time, cryptocurrency is one of the hot topics. Almost every other day, we are getting news about cryptocurrency, crypto regulations, and more. On top of that, Elon Musk created a lot of buzz about cryptocurrencies. All of these definitely made a lot of newbies interested in cryptocurrency. So the question is, what is cryptocurrency, and how can you make your first investment.

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If you are wondering the same, I will discuss cryptocurrency and how you can buy your first crypto coin in this post.

So here we go:

What is Cryptocurrency?

Cryptocurrency is a virtual currency that operates far differently from traditional currencies such as dollars or euros. Unlike traditional currency, there is no physical money that you can hold or keep in your pocket.

By nature, cryptocurrency is decentralized. This means it doesn’t require any government or bank to circulate.

Instead, cryptocurrencies use cryptographic methods to allow users to buy, sell or trade crypto coins securely.

Also, cryptocurrency is designed to be free from government manipulation and control like traditional coins. But since cryptocurrency is getting huge popularity, different governments are making efforts to regulate crypto.

Moreover, it is a digital currency designed to work as a medium of exchange. It uses cryptography techniques to secure and verify transactions.

You can use cryptocurrencies to purchase goods and services. However, most users consider crypto coins as an investment option. Also, crypto coins are one of the top trading instruments out there.

Most cryptocurrencies are built on blockchain technology. Blockchain technology is a distributed ledger enforced by a distributed network of computers.

How does cryptocurrency work?

Most cryptocurrencies operate without any backing from the government or the bank. Instead, they are decentralized by nature and use blockchain technology to complete transactions.

In the traditional transaction, when you send money from one user to another one. The bank checks and approves the transaction. In this case, you have to rely on your bank to complete the transaction. But the same doesn’t go with cryptocurrencies.

The leading Crypto research firm The Money Mongers describes it  as, “Cryptocurrencies exist on the internet only, and there is no physical form. The price of a crypto coin is decided on the basis of the supply and demand concept.”

Cryptocurrency is formed through the process of crypto mining. Crypto mining uses a computer processing power to solve a complex mathematical problem to earn coins. Or you can always buy cryptocurrencies using a crypto exchange or crypto marketplace.

Popular Cryptocurrencies

1. Bitcoin (BTC)

Bitcoin was the first cryptocurrency to ever exist. It is still one of the popular cryptocurrencies out there, and the most talked about crypto coin. Bitcoin was created by a mysterious character known as Satoshi Nakamoto. Moreover, Bitcoin uses peer to peer technology to operate, and it has lower transaction fees.

2. Ethereum (ETH)

Ethereum is another popular crypto coin. It is a decentralized software platform for creating smart contracts and decentralized apps or dApps without downtime, control, fraud, or interference from third parties. Also, the main idea behind ETH is to create a decentralized space where anyone can access financial products freely and without any restrictions.

3. Monero (XMR)

Monero is a secure and private cryptocurrency known for its intractability. This is an open-source crypto coin launched back in 2014. The crypto coin focuses on decentralization and scalability. Also, the coin enables complete privacy by using ring signatures. The coin is the most preferred one when it comes to anonymous transactions.

4. ZCash

ZCash is another popular crypto coin that uses a decentralized blockchain that offers anonymity to its users and their transactions. It is pretty much like Bitcoin. As it has an open-source code. But what makes ZCash different from Bitcoin is the level of privacy and fungibility. Plus, with Zcash, you can transact funds efficiently and safely with low fees.

5. Binance (BNB)

Binance coin is the native cryptocurrency issued by the popular cryptocurrency exchange platform Binance. The crypto coin is mainly used to pay transaction and trading fees on the Binance exchange. However, the coin can also be used for buying virtual gifts, process payments, making investments, and so on.

To help users calculate potential returns or trading costs, Binance offers tools such as the bnb calculator, which allows investors to quickly compute their BNB value in various fiat currencies or other cryptocurrencies. 

How to Invest in Cryptocurrencies?

Investing in cryptocurrencies is a pretty straightforward process. Just like how you buy a company’s stocks from a broker, you buy crypto coins using a cryptocurrency exchange.

A cryptocurrency exchange is a marketplace where you can buy, sell or trade in cryptocurrencies. There are way too many crypto exchanges available out there.

However, I personally find CEX.io to be a pretty good one among them. The website is great for beginner investors, and it has competitive trading fees.

Anyway, to help you know in a better way, let me explain everything briefly:

What is CEX.io?

Cex.io is one of the popular cryptocurrency exchange platforms out there. The platform is extremely straightforward to use, and you can easily buy, sell, trade, and earn crypto.

Using Cex.io, you can trade in more than 1000 cryptocurrencies. So no matter which crypto coin you wish to buy, cex.io would help you with that.

Though there are many more crypto exchanges similar to cex.io but not every other exchange allows you to buy crypto using a credit/debit card seamlessly. Plus, it lets you withdraw your funds to your bank or card pretty quickly.

Moreover, you can also deposit your funds through a wide range of payment methods. Like Credit/Debit cards, bank transfers, crypto deposits, and more.

Also, it has competitive trading fees, which are 0.25% taker and 0.16% maker fee for the lower tier. If you trade in high volume, the fees will get reduced.

How To Register on Cex.io?

  • Visit the cex.io website and click on the Register button from top-left.
  • Select between Individual account or Business account.
  • Next, enter your details like your email address, password, your name, and country and click on the register button.
  • Then confirm your email address.

That’s it. The signup process is complete now, and you are ready to take your first trade.

How To Deposit And Buy Bitcoin using Cex.io?

  • Click on the Deposit button from top-left.
  • Then choose any of your preferred deposit payment methods. Such as Visa/Mastercard, Epay, Skrill, International or domestic bank transfer. (Different deposit methods may attract a certain fee, so make sure to check the deposit fees before depositing.)
  • Complete the payment process, and your funds will get added to your Cex.io account.
  • Once your funds are deposited, go back to the Cex.io dashboard and click on Trade.
  • Use the search button to look for a trading pair like BTC/USD or BTC/USDT.
  • Then scroll down to the bottom, and you will find a buy and sell Window. Use the Buy window to enter your Amount to buy and the price of Bitcoin you wish to buy your coins at.

That’s it. You have successfully made your first crypto purchase. Similarly, if you want to purchase any other coins, you need to search for their trading pair, and you are good to go.

Final Words:

So that was all for what cryptocurrency is and a quick beginner’s guide to investing in cryptocurrencies. I hope the above information did help you with your first crypto investments. In case if you are stuck at anything, then do comment below.

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