4 things you need to know before you invest in Cryptocurrency

 

You need to be well equipped with the knowledge of the cryptocurrency world otherwise you won’t be able to earn well in this sphere. Here are 4 crucial things you need to know:

 

  1. Giving yourself to the crypto world completely

You will be completely excited and thrilled when you first start investing in the cryptocurrency world. Prepare to give your 100% in the process and prepare to be sucked in.

It requires all your attention and devotion and you need to learn about everything in the market. Keep yourself updated and enjoy the thrilling journey.

 

  1. Research is Must

You should research a lot and gain knowledge about the cryptocurrencies before investing in the crypto sphere. You should be cautious of scams and fraudsters and never buy blindly.

You should keep good information about all the different things happening in the market and visit a crypto news aggregator site to keep a record of the same.

 

  1. Quality Information and Knowledge

Not only gaining information is important but the quality and its importance to you is also very crucial. You should know about the crypto jargons, coin fundamentals, analysis of the road maps, price graphs, coin developers, talk about the currency in the communities etc.

You need to keep a track about what the proponents and opponents are thinking about the cryptocurrencies. You can find all the news about cryptocurrencies on Bitcointalk.

 

  1. Starting with less

I would always suggest that you should only invest the amount which you can afford to lose. It is always recommended that you should start with small amount and buy coins with that amount and learn from your gains and losses.

Bitcoins and the cryptocurrencies are very volatile and can even burn and crash overnight. So, one must be prepared at all times and never put all your eggs in a single basket. You risk should be diversified to attain maximum profit.

 

You will not always gain as risk and losses are part of the same. So, you need to be patient and take time in learning and gaining experience about this crypto sphere.

Are you aware of Bitcoin Forks?

 

Bitcoin forks have evolved from the bitcoins and work on the same technology with slight differences in their nature. The main motive of the Bitcoin was to provide access to the digital currencies in the global community, but some people differed in their opinion and the community fractured and forks were made.

There are many different forks of popular Blockchains in the crypto market. Some of the popular Bitcoins forks are:

  • Bitcoin Cash
  • Bitcoin Diamond
  • Bitcoin Gold

 

What is the use of Bitcoin forks?

Bitcoin forks were launched by some people of the crypto community because they felt that the Bitcoin has become too centralized because the early adopters have a large supply of BTC and even miners have acquired a lot of BTC.

Bitcoin Gold

Bitcoin Gold was launched to bring Bitcoin back to where it was in the initial days and giving everyone an equal chance of mining Bitcoin gold. It is also a way of making it decentralized as per its initial motive.

Bitcoin Diamond

Bitcoin Diamond was launched to correct some flaws and faults in the existing system of the Bitcoin such as high transaction fees, transaction time and coin adoption at a later stage.

Bitcoin Gold and Bitcoin diamond are tied completely to the bitcoin and they are exchangeable for Bitcoins. They act like a saving account for Bitcoins.

The main advantage of Bitcoin forks is that they utilize the brand image of Bitcoin which is the most valuable cryptocurrency in the market and will remain so in the next decade. It will not only make bitcoin fork coins stable but will also bring stability to Bitcoin itself.

 

Features of Bitcoin Forks

Highly Secure: Bitcoin forks are more secure than Bitcoin as they have a higher level of encryption and transactions are more private making them less traceable and more private.

More Decentralized: Bitcoin gold and Bitcoin diamond have more participation as the barrier to entry in the mining is lowered. They have an ASIC-resistant algorithm which makes them more decentralized.

Increased Scalability: In Bitcoin Diamond, the block size is reduced to increase scalability and reduce congestion in the blockchain as compared to Bitcoin.

Major Risks Associated With Cryptocurrency Investment

 

Even the most hardcore cryptocurrency enthusiast can’t deny the fact that it’s a volatile, highly unpredictable and esoteric market. Trading in cryptocurrency is a risky affair but, at the same time, the highly incremental ROI has made it an irresistible prospect.

While higher risks often bring better profit margins, blind risks can potentially lead to disastrous consequences. That’s why traders willing to purchase them should invest only what they can afford to lose. Read on to know more about the major risks associated with cryptocurrency investment.

  1. The Value and Longevity of Coins is Speculative

The speculative nature of altcoin value is one of the biggest risks associated with the crypto market. Theoretically, the value of coins rises with the increase in user numbers. But it is impossible to tell which project will attract greater number of users in the near or distant future. Currently there are hundreds of different cryptocurrencies. In another decade or so, many of them probably won’t be existing anymore. From ground zero, it’s hard to predict which altcoin will have long-term, mainstream potential.

  1. Scam Projects are a Common Occurrence

Like any other digital asset, even the cryptocurrency market is prone to scam projects. Many people have lost their fortunes by indulging in business with companies that turned kaput after a promising beginning. So it’s important to do your due diligence and invest in a genuine ICO.

  1. Looming Security Threats

Altcoins are susceptible to cyber threats and hacking attempts. The absence of any central regulatory authority makes it vulnerable to malicious activities. The private keys must be protected using strong passwords. Usage of crypto wallets can provide an added layer of security and prevent accidental sensitive data exposure.

  1. Beware of Blind Temptation

Heard about a new ICO that’s promising a great return on investment? Yes, it can be a tempting prospect, but are you sure the people behind the scene are credible enough to be trusted? Don’t get lured by unreasonable claims. Do your research right, read the whitepapers in detail, figure out the future roadmap and then only think about investing in any new venture.

Final Thought

Just like every other form of asset investment, cryptocurrency and ICO investments are subject to various risks. While the amount of volatility associated with altcoins can be a dampener for some investors, the others might hope to leverage the volatility in their own favor. Ultimately it’s better to be prepared for losses when the stakes are too high.