In recent months a boost in popularity of cryptocurrencies is observed due to unprecedented economic change. Some smaller cryptocurrencies are even seeing massive gains. Ripple though is not as popular as Bitcoin but has made it to the list of most promising investments in cryptocurrencies.
BEST CRYPTOCURRENCY TO INVEST IN NOW-2020:
Though the value of cryptocurrencies decreased in 2019, still some coins are likely to make quick and long term return on investments. While choosing any cryptocurrency instead of going through the current rate index, you may want to consider the following two factors:
- Market capitalization
- Liquidity level
As a result of the COVID-19 pandemic, the digital currency market showed a declining trend. Bitcoin, the top cryptocurrency, has shown a massive decline in the market. According to some news and research, the top picks for the best cryptocurrency to invest in 2020 are:
1. Cardano:
Though it has never made to the list of top cryptos, it has always grabbed the attention of the traders. In 2020, the price of Cardano has shown a magical upturn from its resistance level.
2. Ethereum:
As for Ethereum, one of the big three digital currencies, it has been showing signs for an upturn in its prices recently.
3. Tron
The Tron’s founder, Justin Sun’s recent announcement of protocol upgrade. Triggered the upside movement of TRX currency.
Though the value of Bitcoin has dropped, the developers are offering 50% reduced rewards for each verified block, and bitcoins are likely to bring the dominance index to a higher level compared to altcoins. These factors will cause a significant increase in the price in 2020.
BASIC UNDERSTANDING OF CRYPTOCURRENCY:
So what is cryptocurrency? Before investing in any cryptocurrency, we first need to have some basic knowledge about it. Cryptocurrency interprets as any form of currency that only has digital existence. Unlike banks, it is a decentralized system that has no regulating authority or central issuing. Cryptocurrencies also include extreme risks as they are not guaranteed by any jurisdiction, and you are responsible for all of your investments.
VARIOUS KINDS OF CRYPTOCURRENCY:
There’s quite a difference between coins and tokens though both of them fall under cryptocurrency. A “coin” has an entirely different blockchain from all the other coins that are out there, while a “token” is built upon an existing blockchain project. Generally, they are separately categorized under Alternative Cryptocurrency Coins (Altcoins) or Tokens.
Altcoin generally includes any coin except for bitcoin, and the word ‘Altcoin’ basically refers to “Alternative to Bitcoin”. On the contrary to altcoins, tokens are given through an Initial Coin Offering (ICO). You can take Tokens as kind of virtual assets like loyalty points, certificates or in-game rewards.
For a better understanding of the difference. Now here is a list of some most common types of cryptocurrency:
- Bitcoin
- Bitcoin cash
- Litecoin
- Ripple
- Stellar
- Ethereum
- NEO
- Monero
- Dogecoin
TRADING PROCEDURE OF CRYPTOCURRENCY:
Now the question is how cryptocurrency works? How to use it? Or how to trade it? But before investing in cryptocurrency, you should understand the basic rule of investment, ‘Never invest more than you can afford to lose’. First, let’s discuss different steps for the security of your investments.
Step 1:
Before accessing any website, you should pay extreme attention to the URLs of the site to ensure you are not visiting a fake one. Always make sure there is an “HTTPS” protocol in the URL, not just HTTP.
There are tons of phishing sites that pretend to be the real ones to steal to your information to gain access to your account on real websites. Once you are sure of the real website, bookmark it to access the website through the bookmark in order to avoid any errors in the future.
Step 2:
You would want to keep all your information safe and secure. For that, you would need a pen and at least two notebooks. You should maintain the login credentials and all the sensitive information regarding your crypto accounts in both of the notebooks. You would want to keep these notebooks in separate locations to avoid any emergency cases. Never store your login data or passwords on password managers or any device connecting to the internet.
Step 3:
As there are hackers everywhere to steal your funds, you would want to set up long and complicated passwords cryptocurrency accounts, wallets and more. Hackers use programs that run through massive databases for most commonly used passwords and random combinations of characters so;
- You may want to set up a strong password containing random letters, numbers, capitalization, and special characters.
- Don’t use an online site to generate a password for your crypto accounts.
- Use different passwords for each account.
- For security questions, treat the answers as your passwords. Create fake long, complicated passwords.
- Do not share your personal information, including your cellphone number on social media.
Step 4:
Secure your device (computers or smartphones) with long, complicated passwords and make sure they are free from any malware before setting up your cryptocurrency accounts and wallets.
Step 5:
Create a new unique email address using a handle you have never used before, only for crypto investment accounts. It is recommended to set up your new email using ProtonMail; it prioritizes security and privacy.
Step 6:
You should set up two-factor authentication for an extra layer of protection of your funds. The best option for two-step verification is to buy a security key device.
Step 7:
It is better to have a cold storage hardware wallet instead of a digital wallet on your device to store your cryptocurrency.
After taking all the necessary security steps, you are ready to buy and trade your cryptocurrencies. Now let’s discuss the steps for buying and trading of cryptocurrency.
Create an account on the exchange website or app:
Create an account on the cryptocurrency exchange website by accessing the real and secure website and bookmark this page. Use this bookmark to access the website in the future. One of the most used website is “coinbase” which automatically sets up two-factor authentication. You will need to link your encrypted email and phone number to it. After that, you will need to verify your identity after entering all your information by uploading a pic of your id card for security reasons.
Connect a funding account to your exchange account:
You will need to set up a funding account to your exchange account. Your options include bank account, debit card, and wire transfer. The most suitable choice is a bank account as it allows larger and multi transactions. Link your bank account after completing the security verification of your bank.
Trading cryptocurrency:
Now you are ready to buy cryptocurrency. Click on the buy and sell tab on the exchange account. Choose the cryptocurrency you would want to purchase. Now enter the amount you wish to buy in your traditional currency or cryptocurrency. Review the amount for accuracy. Click buy now, and the cryptocurrency will be deposited in the cryptocurrency wallet of the exchange account.
Transfer of cryptocurrency to the hard wallet for offline storage:
Exchanges cannot help you with any losses resulting from the compromise of your account or individual error. Exchanges are under constant attack from hackers trying to break through and steal your funds. So, it is not a good idea to rely on a third party to protect your funds as it is extremely risky. So it is best to transfer your cryptocurrency to a cold storage hardware device. Never buy a used hardware wallet. Set up your hardware wallet device, and transfer the funds to it by plugging it into your computer, then click the receive button of the wallet and send option on the exchange app. Make sure to check the address while sending the cryptocurrency to your wallet.
Transfer of cryptocurrency back to the exchange and trade with other cryptocurrencies:
Click the receive button from the exchange app and the send option of the hardware wallet app. Copy the address from the exchange app and paste it to the recipient section of the hardware wallet app. It will have a transaction fee, the higher the fee, the faster will be the transaction. Now your cryptocurrency is back on to the exchange app where you can trade it for traditional currency or other cryptocurrencies by clicking the trade option on the exchange app.
KNOWLEDGE OF CRYPTOCURRENCY EXCHANGE:
So, where do you buy cryptocurrencies or bitcoins? An exchange is a platform that allows you to buy and sell cryptocurrencies. These websites allow you to exchange cryptocurrencies for other digital currencies or traditional currency like U.S. Dollars or Euros. As these exchanges are not regulated by any authorities, you should be very careful while performing a transaction on the exchange app, as no one but yourself will be responsible for any loss. The cryptocurrency exchange also requires you to verify the user id for bigger or multi transactions to reduce the risk of scam or fraud. One of the most popular and commonly used exchange websites is ‘coinbase’.
After buying digital currencies from an exchange, you can transfer it to a digital wallet to reduce the risk of scam to its lowest. A digital wallet is a platform that keeps your digital currencies and allows you to transfer it to others without going to a bank.
VALUE OR PRICE OF DIFFERENT CRYPTOCURRENCIES:
The price and value of digital currencies are extremely volatile as they are traded worldwide 24/7. You may predict the increase or decrease in its value through the market trend, but you cannot estimate the exact price and value of the cryptocurrency. Let’s take the dogecoin price prediction as an example. You can predict the max expected price of dogecoin to be around $0.0284 and minimum to be around $0.0214 in 2020, but you cannot estimate the exact price.
HOW DOES BITCOIN MAKE MONEY AND HOW CAN YOU BUY WITH IT?
Bitcoin is a top cryptocurrency that can be bought through an exchange app or website. But how do you make money from it? Well, you can sell it at a higher rate because as the popularity of bitcoin is increasing, many people are willing to spend more money to own it. Another way is through bitcoin mining. Through it, you can earn more bitcoin without really investing any money in it. Bitcoin is received as a reward for adding a new block of transaction to the blockchain. After receiving the reward as bitcoins, you can trade it for traditional money on the exchange website.
Many merchants worldwide accept bitcoins in exchange for other things. Notable traders include Microsoft and Expedia. Many big companies accept payment in bitcoins in exchange for their stocks. You can make the payment through the digital wallet or exchange app by entering the public address or by scanning the QR code of the trader.
