10 Things You Should Know Before You Buy Cryptocurrency
So, the Cryptocurrency is everywhere!
Yeah! We are talking right and it is literally on boom!
You can find people talking about this phenomenon all around you in the cab, school, college, office, informal chats and almost everywhere. No wonder it deserves the hype as it is not only much talked about topic but it has delivered high returns on investments.
I know people who have bought their dream bikes & cars from this additional earning in short span of time. Though I am not an expert on Blockchain but yeah then I have firsthand experience of investing in cryptocurrencies and earning some handsome amount.
It wasn’t coming easy before I finally decided to get into the rush of buying cryptocurrencies that were supposed to give some good returns. Frankly speaking, I heard about cryptocurrencies back in early 2011 but yeah then it was more than a currency of bad people for me then.
In fact, I started writing about Bitcoin and other currencies as if a medium of transaction to get ransom by cybercriminals through ransomware attacks. Though, it was until recently before the cryptocurrency boom happened one of my friends suggested me to take this seriously.
And then comes the serious research and investment into it. With my experience in cryptocurrencies, I could help you understand few things you should know before you actually plan to buy any cryptocurrency.
What is Cryptocurrency?
Before investing in this highly speculative and volatile currency, you should be knowing about it. Right?
A cryptocurrency is a form of virtual or digital currency that is securely designed and uses cryptography for security. In most cases, it is anonymous and hard to counterfeit due to its improved security features.
This virtual currency is associated with the Internet that is designed to use cryptography, the process of converting legible information into a highly uncrackable code. Further, it is used to track transfers and purchases.
One important feature of this digital currency is its organic nature as it is not issued or supported by any central authority. Thus, it is completely immune to interference by any central authority or government. It also reduces the chances of manipulation.
Benefits and Drawbacks of Cryptocurrencies
Cryptocurrencies brings certain benefits to users to make it more important for daily transactions. It helps you make your funds transfer easy and convenient between two parties.
Here, it offers secure funds transfer by facilitating it through the use of private & public keys for security reasons. You can make these fund transfers with minimum processing fees and least trouble.
The drawback of cryptocurrencies is that they are not legalized yet by most central agencies or governments. Another limitation of cryptocurrencies is that they are highly volatile and speculative in nature which makes them high-risk investment. It makes cryptocurrencies highly unpredictable when it comes to long-term investment.
Verify if Your Country has Legalized the Cryptocurrency Transactions
This is another important factor that should be deciding your cryptocurrency transactions. There are few countries in the world that have legalized the cryptocurrency transactions still there is a lot more nation who have outrightly blocked the use of cryptocurrencies or are studying their feasibility.
It is known factor that cryptocurrencies have no central authority to control thus it becomes important for governments to decide every single factor before legalizing them. Further, you can expect that your country might not embrace cryptocurrency anytime sooner.
Thus, it becomes really crucial to know whether cryptocurrency is legal (or going to be legal) in your country before you make any transactions into it.
Check Cryptocurrency Acceptance
If you are buying cryptocurrency for pure investment and planning to sell it after some time then it’s ok, else it is important to know the currency you are buying should have some outlets where you can spend it.
Here comes the good news! Apart from some big companies around the world, many local merchants have also allowed their consumers to make transactions in cryptocurrencies.
In fact, some big online exchange platforms are planning to launch their own cryptocurrencies. Further, many exchanges around the world are waiting to list cryptocurrencies with them. Thus, you have more options to come.
When is the right time to buy?
Well, this is a tricky question. Cryptocurrencies aren’t controlled by any central authority and its prices don’t get affected directly by single country’s financial stability or situation.
Thus it is your research about the cryptocurrency that should be a deciding factor. Despite the fact, cryptocurrency isn’t controlled by any central authority still ban or restriction on cryptocurrency trade in your country may affect its prices for a period of time.
Here, you can do trade in cryptocurrency with international exchange for better security.
Is all cryptocurrency the same?
Well, No! Here, to earn some cryptocurrencies you need to mine them, in addition, to directly buying them from the exchange. Then there are other cryptocurrencies that don’t require mining. Here, you can differentiate cryptocurrencies in “currency” cryptocurrency, “utility” cryptocurrency, and “App/Platform” cryptocurrency.
Where is your Cryptocurrency stored?
Unlike traditional stocks & bonds where you have access to your investments through a brokerage account, cryptocurrencies are saved in Cryptocurrency wallet or digital wallet. Here, you can send, receive and store cryptocurrency in these digital wallets anytime anywhere. Further, you need to keep these accounts secured with PIN or access details.
You can’t Cancel Cryptocurrency Transactions
While making online transactions to buy or sell cryptocurrency, these platforms don’t allow you to recall your transactions. Here, if you have transferred cryptocurrency to the wrong ID then you can only expect to meet that guy someday to get your currency back.
Technically, when you have initiated the transaction and the cryptocurrency have moved out of your secured wallet it can’t be recovered by any means. Thus, it becomes important to verify every single detail before making transactions.
Know how much you can afford to lose
This is one important factor you should consider. Here, you need to know how much you can afford to lose in case things don’t work out the way you want them to.
As it is known that these currencies are highly volatile and speculative in nature thus they become high-risk investments too.
Apart from it, there are legalization issue, hackers threat, and many more threats that make your investment vulnerable all the time. Thus, it becomes important to know your comfortable investment zone.
Cryptocurrencies are traceable
If you differ the idea then you should be knowing that many cryptocurrency experts suggest that cryptocurrency is traceable when converted into fiat currency (?).
Knowing the immense benefits and certain limitation, cryptocurrency evangelists are positive that it is going to be a major medium of transactions in near future. With further technological advancements, you could find that limitations of cryptocurrencies have been fixed in near future.
Here, based on my research and first-hand experience of trading cryptocurrency, I could only say that “Cryptocurrency is here to stay!”.
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