You’ve just heard about crypto from a friend and want to know what it’s all about and how to get started? For the real basics head on over to our beginner guide that will help you get an account setup and understand what crypto is. But the real question you probably have comes after that? How do I make money with all of this stuff without getting scammed?
Well in this definitive guide to cryptocurrency I’ve taken the top questions from Quora about cryptocurrencies and answered them in-depth for you below. This guide will be updated over time and added to as needed. It really is the definitive guide to getting your head around cryptocurrency investment.
What are the best cryptocurrencies to invest in?
You should only invest in what you know and what you believe in. The best choice depends on if you are looking for short-term growth with more risk or long-term growth with less risk. Overall, the best cryptocurrencies to invest in tend to be those used by blockchains. Think Bitcoin, Ethereum, Stellar (XLM), or even SpankChain (SPANK). These tokens are all used to run the network, not just a single project or idea. Because they are platforms that others can build endless ideas on, their chance of success is much higher and their token prices would follow that success or lack of.
What is the future of cryptocurrency?
Think of cryptocurrency and especially the blockchains behind each crypto, as being the internet back in 1999. At the time, there was a lot of confusion as to why anyone would need it, its future use, but excitement surrounded it. It made a lot of people rich if they stuck through and were lucky enough to have picked the long-term winners in the marketplace, i.e. Amazon, Facebook, Google, etc.
What are the best cryptocurrency wallets?
Each type of cryptocurrency will have its wallet based on that cryptos blockchain. There are often many different wallets available for the same crypto. The best wallet to use is one that allows you full access to your private keys. Do not store your crypto for long periods of time in an exchange wallet, or web wallet.
What is the best cryptocurrency exchange?
There is no actual “best exchange” in the sense that each exchange has different tokens available, different prices and different trading volume. The best exchange to use is going to be the one that has the token you want to buy or sell listed, a price within other exchanges (if the token is listed elsewhere), and enough volume to execute your trade quickly. You can find a list of the exchanges the token trades at by going to Coinbase, CryptoCompare, or other cryptocurrency price websites. Just type in the token you are looking for, and then navigate to the “markets” section.
Why is Bitcoin a good idea?
While digital cash itself is not necessarily a new idea, Bitcoin is a good idea because of the way it is designed. The world lacks an easy means to transfer value from one person or entity to another without having to go through major banks, intermediaries, etc.. all of which take a cut. Fiat currencies are also centrally controlled causing trust issues with the public and ease of manipulation in the market. Bitcoin helps solve all of these issues by providing near-instant transfer of value without the need for an intermediary. The network itself which handles the transaction is completely decentralized and trustless.
What is the best cryptocurrency for long-term?
The best cryptocurrency for long-term is likely to be those that are used by a Blockchain rather than being a utility token tied to just one project. These tokens have the benefit of being part of a larger network that is used to build many projects, instead of just one. The likelihood of one of those projects being a success is much higher, and each Blockchain has their benefits and drawbacks. Stellar, Monero, Dash, Ark and SpankChain make great examples of these.
ICOs (Initial Coin Offerings)
What are the best ICOs?
When choosing an ICO to invest in it is important to determine the actual use-case of the token being created. Tokens which serve as payment for a single company/product are known as utility tokens and come with much higher risk than an asset token or privacy coin.
You also want to remember that investing in ICOs is a lot less risky and more rewarding in an up-trending market. It can often take several months before the tokens from the ICO are unlocked, and by then the value paid may be higher than their worth. Then again, you could also have a gain of 500% if the timing was right. These are the risks of investment.
Is it better to invest in ICOs rather than Bitcoin?
This is more a matter of preference and your ability to tolerate risk (larger fluctuations in your portfolio). ICOs provide the possibility for much higher returns than just holding or trading Bitcoin itself due to their often drastic movements in price. It is not unheard of for an ICO to quickly have 500% returns or more shortly after entering the market.
These gains are often short-lived though and require paying attention to your holdings and taking profit when the timing is right. Bitcoin, as the largest of the cryptos, is still highly-volatile but with more liquidity and with less percentage of fluctuation.
It is often best to invest in a mixture of ICOs and large-cap cryptos like Bitcoin, Ethereum, Monero or Dash. This mixture provides stability to your portfolio but still allows for drastic gains from solid ICOs.
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