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Cryptocurrency is a digital asset that’s designed to work like a medium of exchange that uses cryptography in order to secure its transactions, control the creation of additional units, and even verify the transfer assets. Digital currencies, alternative currencies, and virtual currencies are just types of cryptocurrencies. They’re also used as decentralized control while opposed to centralized electron money and central banking systems. And it all works through Blockchain, which is a public transaction database that functions just like a distributed ledger.
Now that we know what exactly is cryptocurrency, let's get into the coins. There are so many types of cryptocurrency coins such as Bitcoin, Ethereum, Litecoin, Zcash, Dash, Ripple, and much, much more. Buying cryptocurrency coins comes with a lot of research to do and even if you know the basics, that's not enough. Here's what you need to know in order to buy your first cryptocurrency coins.
Why should you buy cryptocurrency coins?
Ever since you heard about the world of cryptocurrency, you want to get and be more involved in that field. But why? If you’re considering investing in cryptocurrencies, then you’re making a smart move. There are essentially three main reasons why you should invest in cryptocurrencies.
For starters, you definitely want to hedge your net-worth from the fall of the Dollar imperium. And this is assumed by so many people to naturally happen at any time. But then you also want to support the social vision behind cryptocurrencies of free and hard money for the world. Finally, you simply understand it all and enjoy the concept. A great idea, right?
How to Research Cryptocurrency Coins
To properly research cryptocurrency, you need to do a lot… a lot of reading, it’s part of how to buy your first cryptocurrency coins. But it also depends on your trading strategy. If you’re considering to be a day trader, then it's mainly suggested that you stick with 4chan biz. It’s basically updating you on what’s happening in the crypto world. They share all information on coins as well as news that's happening in the market.
But if you’re a holder on coins, then it’s best if you check out your coin’s Slack channels and even their subreddit. Never be afraid to ask questions. Since crypto is a game, you don’t want to trade so much and not win. Be smart and educated in order to buy your first cryptocurrency coins!
What's the difference between Bitcoins and Altcoins?
As for cryptocurrency coins, there are coins that are much more popular than others. In this case, it’s Bitcoin and Altcoins. Bitcoins is seen as the most popular cryptocurrency in the world. It was created in 2009 and its value shot right up more than 10-fold in just a two month period. Bitcoin has always kept its dominance in the total market capitalization over altcoins throughout the years—from 95 percent to a bottom low of 37 percent.
For Altcoins, it was released in 2011 and it seen as an alternative to Bitcoin. However, their main focus is to improve and change up Bitcoin’s entire concept. From the competitive market, users will actually gain better cryptocurrency alternatives in the near future. Even though coins have faded since the beginning, the number of different Altcoins are accelerating each day. They also possess their own unique features, algorithms, and goals overall.
Where do you buy cryptocurrency coins?
When it comes to how to buy your first cryptocurrency coins, the main platform is Coinbase. Coinbase is a both a platform and a digital currency wallet where merchants and consumers can carry out new digital currencies like Bitcoin, Litecoin, and Ethereum. Depending on what coins you want to buy, Coinbase is easily the most popular source.
However, there are also Coinbase alternatives that you should know about. Cryptocurrency platforms like Gemini, Bitstamp, Wall of Coins, Kraken, CEX.io, and others can be a platform to buy crypto coins. Just know what type of coins you plan on buying and the best source to get them.
Think about your budget before buying.
When it comes to how to buy your first cryptocurrency coins, be aware that you shouldn't drop all the money you own. Think about your budget before getting into crypto. Just like all investments, there's some money that can go into investing and then there's money that should be used for bills and personal spending.
Buying cryptocurrency coins can seem like spending a lot of money, but it isn't. There are times where you can save money to buy coins and then money that's must be used to pay off bills and other debt. Never put all of your money down on just crypto coins, because if something happens to that currency, chances of you getting back that money is actually zero. It's similar to investing in stocks, but not entirely. Stocks are backed up by companies or the government, cryptocurrencies aren't. So, be wise with the amount you're buying coins with!
What is a cryptocurrency wallet?
Just like your actual wallet, a cryptocurrency wallet allows you to carry and hold onto your coins. It’s a software that’s designed to store private and public keys and interact with other blockchain for users to send and receive digital currency. Wallets also allow users to monitor their balance. Many people can use Blockchain for their wallet; however, Coinbase is probably your best bet.
From how to buy your first cryptocurrency coins, if you buy coins, you need a wallet to put them in. And there are a lot of different wallets out there. From web wallets to desktop wallets, paper, hardware, and even brain wallet, the list goes on, just the like amount of crypto coins out there. Choose a wallet that's best for your coins and what works well with you.
Consider installing cryptocurrency apps.
To keep track of your coins, prevent scammers from getting your currencies, and overall maintain proper trading strategies, cryptocurrency apps are a must when it comes to how to buy your first cryptocurrency coins. It's actually pretty easy for scammers to snatch your coins. And one of the ways to prevent them from getting their hands on your crypto coins is by installing a crypto app!
There are so many cryptocurrency apps out there, but some of them are actually scams, believe it or not. It's a scary thought, but you have to do intense research to know which app is trustworthy. There are legit apps like Blockchain, Coinbase, Xapo, Blockfolio, and others.
There are strategies for trading coins.
Yes, there are definitely strategies on trading crypto coins. From how to buy your first cryptocurrency coins, there are a couple of ways to successfully trade coins. The first strategy would be to invest in initial coin offering (ICO). Even though there are so many ICOs coming out on the daily, you would have to do your due diligence on any of them that interest you. Another way is to accumulate the lows, which mean to accumulate the lows while a coin continues to drop in value. In some cases after an ICO of a specific project, traders/investors tends to withdraw some, or all, of their investment, thereby driving the price of the coin down.
Buying the breakouts is another strategy of trading coins. Breakout trading is used by active investors who take a position within a trend’s early stages. However, this strategy can be the starting point for huge price moves, expansions in volatility, and even offer limited downside risk. Continue to do more research if you want to find other ways to trade crypto coins.
Would you rather buy or mine?
Lastly, on how to buy your first cryptocurrency coins, would you consider buying or mining cryptocurrencies? For starters, mining features two main functions: adding transactions to the blockchain for securing and verifying, and releasing new currency, too. Individual blocks that are added by miners should contain either proof-of-work, or PoW. However, mining needs a computer and a special program to help miners compete with their peers in solving difficult mathematical problems. Miners would also try to solve a block having the transaction data by using cryptographic hash functions.
As for buying crypto coins, you can only trade and sell coins. You cannot release a new currency. Plus, mining is pretty expensive. Either way, it all depends on how you want to be active in the cryptocurrency world.