Karen is a free-lance writer and artist with a special interest in beginner investing and our American political landscape
Spending your hard-earned savings on cryptocurrency can be scary, but it is an exciting and interesting way to begin learning about investing if you have never done it and have some money you can afford to risk. All investing is a risk and watching your investment rise and fall and rise back up is all part of the learning experience and process.
There are multiple ebooks and websites that will teach you the preliminaries that you need to get started purchasing cryptocurrency. YouTube has tutorials that are helpful. Caution is to be used, of course, because many YouTube channels just want your views so they are never to be used for financial advice, only a place to learn the basics and pick up some tips on navigating the various trading platforms.
Coinbase is generally ranked number one in trading sites for beginners as it is user friendly and easy to get started. Number two often noted is Binance, followed by Voyager, BlockFi, Kraken, and Crypto.com. Keep in mind you need plenty of time available to establish an account with any of these. You will be sending your personal information including social security number and current photo ID which will all be verified before you can purchase or trade. Different sites offer various cryptocurrencies, so it is best to explore. All offer Bitcoin and most others in the Bitcoin "family". Some offer a wider variety of "Alt" coins (Alternative to Bitcoin) such as Dogecoin, Cardano, or Ethereum, etc.
If you already have a PayPal account, they now offer cryptocurrency as well and is a great place to get started if you just want to purchase some Bitcoin, Bitcoin Cash, Ethereum, or Litecoin.
Robinhood is another investing site growing in popularity and is extremely user friendly. Although their cryptocurrency choices are far less than Coinbase or Binance, it is easy to follow the trends and track how well the crypto market is moving. Since this is a stock trading platform you can invest in stocks as well on Robinhood, or just save a few stocks you select to a watch list to follow their price fluctuations. This way you can begin to learn how the market moves and discover if stock investing is right for your future.
If you want to trade or spend your cryptocurrency you will need a digital wallet to store your funds so be sure you choose a site that offers this option, although soon they will all be doing this to keep up with demand as people begin using crypto more and more in common transactions.
The world of cryptocurrency is based on Blockchain Technology. Blockchain is technology whereby digital transactions are recorded on multiple databases. A very simplified way of looking at this is that the records can be thought of as "the Block", and the databases as "the Chain." Cryptocurrencies are the tokens, or currencies, used within networks to send value and pay for transactions. Mining is the process cryptocurrencies use to generate new coins and verify transactions.
There are a lot of resources available to help understand blockchain technology in greater depth. However, it is a fascinating yet complicated subject and can be difficult to grasp. It is not necessary to comprehend the technology behind cryptocurrency mining in order to begin purchasing and trading, but the more you learn about it the more you can understand what may make one cryptocurrency worth investing in or purchasing versus another. After all, you do not need to understand the science behind self-driving vehicles in order to invest in Tesla or be a computer prodigy to invest in Microsoft or Apple.
Cryptocurrency purchasing or investing is of course quite different from investing in the stock market. When you buy a stock you are purchasing a small part of a physical company backed by cash assets. Cryptocurrency is not, so is much more volatile and is not yet federally regulated. Learning about one however can help to understand the other when it comes to adventuring into the world of financial risk taking.
Taking a leap into the world of cryptocurrency can be fun and financially rewarding. It is a risk of course but that is all part of the adventure. If you are ready to begin remember you cannot do too much research on the topic of cryptocurrency but you can start small, even just a few dollars, until you feel you have learned enough to proceed with larger and more diversified purchases and trades.
Good luck with your crypto adventure!