Cryptocurrency is a virtual currency: it means that it does not exist physically, but exclusively online. Recently, interest in investing in cryptocurrencies has grown exponentially. We will try to understand together how cryptocurrencies work and how to invest in them safely.
How do cryptocurrencies work?
Cryptocurrencies can be transferred to anyone on the Internet without an intermediary, such as a bank. They can also be used to make payments worldwide without any restrictions. It is important to keep in mind that bitcoin exchange rate constantly evolving. In other words, if you want to invest in a cryptocurrency, you need to know that it can cost thousands of dollars today and only hundreds of dollars tomorrow. If the value drops, there is no guarantee that it will recover quickly, so be aware of the risks.
How to buy cryptocurrencies?
You can do this with a credit card or, in some cases, with a process called “mining”. This way, users can easily buy bitcoins and other cryptocurrencies using a wide range of payment options. As such, KuCoin accepts a wide selection of currencies and makes it easy to buy cryptocurrencies. After completing your purchase, we will deposit your new cryptocurrency directly into your KuCoin wallet, which is an easy and secure way to manage your cryptocurrencies.
What is bitcoin?
When we talk about cryptocurrencies, we are talking about bitcoin. This is the first implementation of the cryptocurrency concept and the first peer-to-peer decentralized payment network managed by its users. That is, it is not subordinated to a central body or intermediary. Bitcoin is also a consensus network that provides a fully digital currency and payment system.
Why do users invest in cryptocurrencies?
Interest in buying cryptocurrencies has grown by 300% over the past year, and searches on the Internet to “buy bitcoin” by 200%. How to explain this phenomenon? Today, bitcoin investors want complete control over all their transactions. Moreover, technology blockchain The basis of bitcoin and other cryptocurrencies has several characteristics that make it an interesting investment, here are some of them:
1. Increase profits
Cryptocurrencies have proven to be a good alternative to protect the money of their users due to the loss of value of most other currencies. They allow you to increase your earnings because they bring in passive income. Thanks to fully automated trading solutions, KuCoin allows, for example, to automatically generate money by offering capital management services.
2. Improving security through technology blockchain
The technology system used by cryptocurrencies is much more secure because it is a completely encrypted procedure, and the information can only be decrypted by the sender and recipient using the code they own. In addition, it is a universal currency, and if its use is not limited, it can be used for transactions anywhere in the world.
3. A project full of promises
Bitcoin was the first cryptocurrency to emerge in 2008, and since its inception, the first investors to invest in digital currencies have benefited greatly from its growth over time. Thus, it shows us that investing in cryptocurrencies is a great opportunity to make a profit, albeit in the long run.
Is it safe to invest in cryptocurrencies?
Cryptocurrencies are not secured by the state like bank deposits. This means that cryptocurrencies stored on the Internet do not enjoy the same protection as money stored in a bank account. The cryptocurrency market allows you to decentrally create a variety of tools and services. This is where the transparency of the process comes from. For added security, the exchange, which is fully digital, uses robust cryptography to protect transactions, monitors the creation of additional blocks, and verifies the transfer of assets using distributed write technology.
How to invest in bitcoins and cryptocurrencies?
1. Decide what type of cryptocurrency you want to invest in
The first step in knowing how to invest in bitcoins is to determine, based on the questions mentioned in the previous paragraphs, which cryptocurrency interests you the most. There are several thousand different cryptocurrencies, and the total value of all is about 1.7 trillion dollars. Today, the KuCoin platform alone offers 540 cryptocurrencies and is therefore a pioneer in cryptocurrency exclusives.
2. Choose where to invest
As with any procedure, it is important to plan, set goals, and determine the amount you want to invest. Once this decision has been made, it is important to consider the best time to make the investment.
3. Get a cryptocurrency wallet
There are different types of wallets, and each is designed for a different type of cryptocurrency. Choose well!
4. Join the exchange network
When you have a wallet, it’s time to join the exchange, because that’s where the transactions will take place.
5. Buy cryptocurrencies
If you already have a wallet and an exchange account, you can now buy cryptocurrencies. They can be purchased on the website of each cryptocurrency or on specialized platforms such as KuCoin.
Together we saw how cryptocurrencies work and how to invest. However, remember that cryptocurrencies are not regulated by any institution, so you are fully responsible for what happens to your money. To avoid possible fraud, you can resort to certain measures, such as activating double authentication (2FA). This is, in particular, the promise of KuCoin. After creating your account, you will need to enter your password and then a unique temporary code sent directly to your mobile phone. No one will be able to access your account without your permission.