Crypto is the next big thing: Here’s what you need to know about it

With unceasing access to fast and cheap internet, most of the population is aware of the basic news, the upcoming trends, and the latest information. Whether it is in the form of watching the news channels on television, keeping track of trends on Twitter or getting the information via memes on Instagram, the news is consumed by people all over the world. This is one of the major reasons they are aware of topics from different streams, including finance, movies, technology, or sports. This is also the reason why people are increasingly interested in the topic of cryptocurrency. 

Introduction to cryptocurrency

In laypeople’s terms, it would mean a digital currency that can be used to buy and trade goods and services. All of the trading happens via an online ledger which ensures secure online transactions with complete anonymity of the users. This form of currency and transactions are non-centralized, which means that they are not owned or supervised by any government authority. This helps in the transparency of the process as all of the monetary transactions are well accounted for since they happen directly between the user (sender) and the receiver eliminating the need for a middle-man. 

Types of currencies

Currently, in the global market, there are more than 100 cryptos available for transactions. Based on their values, patterns, their growth, and volatility, people choose to buy or sell these cryptos. At the moment, Bitcoin and Ethereum are dominating the market cap and are the most purchased currencies. There can be different methods of buying the desired cryptos. For example, one can choose to buy Ethereum coin or can choose to purchase a digital wallet to store the online currency with a private key (this enables the user to be the sole accessor to the currency and its value). 

Purchasing cryptocurrencies in today’s market

There are a few easy steps one can follow to be able to purchase cryptocurrencies. 

  1. Choose an exchange platform – A platform would be a medium wherein the buyers and sellers can meet to exchange cryptos. There are several websites in India such as CoinSwitch that enable eager and potential investors to meet and trade securely. 
  2. Open the account – Register on one such website and activate the account by completing KYC registration, providing the required proof and information, and bank details. Deposit money in the account to be able to start the trades. 
  3. Place the crypto order – After research, when the decision has been made about the particular currency/currencies to trade, place the order. Some platforms allow the amount to be as low as INR 100. The value of the currency bought will depend on its current value in the denomination of the country. For example, if the trade has to be made in Ethereum, the primary step would be to understand the value of INR to ETH to be able to decide the amount of currency that needs would eventually be added to the wallet. 

Key factors to keep in mind before purchasing cryptocurrencies

Before spending large sums of money on an essentially untapped market, taking into consideration these points would help make the purchase more efficient.

  • Volatility of the market – The financial world of cryptos is said to be one of the most volatile markets. The price movements are erratic and do not display a pattern. Check for currencies that have slightly fewer fluctuations.
  • Volume 24hr – This means the total dollar value of the transactions made in the last 24 hours. Understanding this value would help determine the liquidity of the coin. 
  • Speed – In this context, speed would mean the rate at which the coin is exchanged in the global market. Calculate the speed by dividing the 24hr volume by the circulating supply.
  • Supply – As the name suggests, this refers to the estimated number of coins available to purchase in the market. For example, at any given point, only a 21million bitcoins can exist. 

Why is the hype real?

Sceptics would not waste a moment to say that the surge will die down soon enough. However, there are several factors to be considered before believing that side of the tale. This currency thrives on internet accessibility – which does not seem to be depleting anytime soon. Secondly, the returns people have received in the limited time cryptos have been in the market speaks volumes for its desirability. Additionally, the ownership of one’s own money owing to the transparency of the process is a key factor. 

Investing in the ‘next big thing’ is always a good way to grow the money that one has earned. It has the potential of making new investors double or triple their money if the investment is done correctly, with a calculated risk assessment. Having the foresight to join the trendsetting times is a privilege – capture this by making use of the websites and technology to the fullest. 

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