A Beginner's Guide to Investing in Cryptocurrency
This introductory guide is here to help anyone thinking of or new to investing in cryptocurrencies and tokens (Bitcoin, Ethereum, etc.)
If you're already a Crypto-investing master share this article with your less-knowledgable friends to bring them up to speed!
What is Bitcoin?
Bitcoin is digital cash for the Internet. A person can now send Bitcoin across the world to other people or to buy things. It's relatively inexpensive to send and extremely secure.
Are people actually using Bitcoin?
How Do I Buy Bitcoin?
I recommend using Coinbase for purchasing Bitcoin or Ethereum. Coinbase is fairly easy to navigate and, you should be able to make a purchase with little to no hassle. Be prepared to give them a Driver's License, Social Security #, and other ID verification sources.
So what is this Blockchain stuff that people keep mentioning?
A blockchain is just a ledger or database. People use it to keep track of all transactions that occur on the network. This is a big deal because typically you need to trust a central authority, such as a bank, to track your financial transactions or a hospital to track your medical records. Now you don't have to worry about hacks like the Target hack in 2013 where 40 million credit cards were compromised. All your data will be secured and validated in the blockchain. PWC has a great infographic to explain this:
Are there other cryptocurrencies and cryptoassets I can buy?
There are over 800+ cryptocurrencies and cryptoassets; I would recommend getting familiar with Ethereum or Bitcoin before you dive into buying these other tokens.
I get it, but do you have any other things that I can read?
- Wall Street Journal: Bitcoin and the Digital-Currency Revolution
- Wired: Bitcoin Will Never Be a Currency—It’s Something Way Weirder
- Coindesk: How to Explain Bitcoin to a 5-Year Old
This sounds really cool. Almost too good to be true.
You're right, this is really cool, but blockchain technology is still in its infancy. We don't know if the technology works at scale, how the regulatory environment will play out, or even if people will fully adopt it.
Interested in mining Bitcoin? Check out How to Start Bitcoin Mining Today