Invest in Crypto in 2024 – Bitcoin, Dogecoin, and even Ruby Coin. If you’ve heard of any of these cryptocurrencies, chances are you’re familiar with the concept. But understanding what they are and how they work is a different story. In this blog post, I will guide you through the process of investing your own money in Bitcoin and explain the basics of the cryptocurrency. So, let’s get started
Know About Cryptocurrency
Think of cryptocurrency as a digital version of payment processors like Cash App, Venmo, or PayPal. When you use these apps to send or receive money, there’s usually a company facilitating the transaction. But with cryptocurrency, you can cut out the middleman. Instead, your transactions are checked and recorded by a network of computers spread around the world. Once they agree that the transaction is valid, it’s added to a long list of previous transactions called a blockchain. This decentralized system allows for peer-to-peer transactions secured by cryptography.
What is Blockchain Technology and how does it work?
A blockchain is like a digital ledger that records transactions for a particular cryptocurrency, such as Bitcoin. Each time someone sends or receives Bitcoin, that transaction is recorded into the blockchain. Instead of pages, the blockchain is made up of blocks, with each block containing several transactions. When a block is filled, a new block is created and linked to the previous one, forming a chain of blocks. This is where the name “blockchain” comes from.
Why is the Blockchain Public?
Unlike traditional ledgers that are kept private, the blockchain is public and transparent. Anyone can view it anywhere in the world at any time. This transparency is a fundamental aspect of cryptocurrencies like Bitcoin. It allows for trust in a decentralized system, removing the need for central authorities like banks or governments to verify transactions. By making all transactions visible on the public ledger, cryptocurrencies open up financial systems to everyone.
The Potential of Cryptocurrency
Cryptocurrencies go beyond being just a new type of digital asset. They are a transformative technology that has the potential to redefine our perception and interaction with financial systems. By removing intermediaries and making financial transactions accessible to everyone, cryptocurrencies aim to create a more open and decentralized financial world. Investing in and using cryptocurrencies means participating in this larger vision.
The Benefits of Cryptocurrency
Cryptocurrencies offer several benefits, especially in a world where the money supply is rapidly increasing, leading to inflation and economic instability. By using cryptocurrencies, you can protect your wealth from the effects of inflation and have more control over your finances. It’s a way to counter the actions of those in power who might manipulate the traditional financial system for their own gain.
Know About Bitcoin
The Bitcoin system is like a ledger, where transactions are recorded and added to the blockchain. Before a transaction can be added, it needs to be validated by miners. Miners solve complex mathematical problems to validate transactions, ensuring the sender owns the Bitcoin they are trying to send. Once a problem is solved, transactions are grouped into a block and added to the blockchain. Miners are rewarded with Bitcoin for their work, and this is how new Bitcoin is created and enters circulation.
Bitcoin mining makes the system transparent, secure, and self-sustaining. Transactions are recorded on a public ledger, ensuring transparency. Transactions are checked and verified, making them secure. The reward system incentivizes people to continue mining, making it self-sustaining.
In the early days of Bitcoin, mining was simpler and could be done with a regular computer. As more people started mining, the difficulty increased. This intentional increase in difficulty regulates the rate at which new blocks are added to the blockchain. This can lead to a decrease in the supply of Bitcoin, causing its price to increase due to the principles of supply and demand.
The Potential of Bitcoin
Bitcoin mining has become a whole industry, with specialized hardware and mining farms. These farms, often located in places like Iceland, use designated hardware and require cooling to function properly.
Bitcoin has been called the new digital gold due to its potential to appreciate in value over time. However, its value has fluctuated significantly in the past. Bitcoin tends to follow a cycle, with periods of rapid growth followed by declines. If another bull market cycle occurs, there is a chance for substantial profits.
Buying and holding Bitcoin is a strategy based on the belief that its value will increase over time. However, investing in Bitcoin carries risks due to its volatility. It is important to only invest what you can afford to lose and conduct thorough research before investing.
How to Start Bitcoin with Coinbase?
To get started with Bitcoin, you can sign up on Coinbase, a secure and user-friendly platform for buying, selling, and holding cryptocurrencies. Coinbase currently offers a sign-up bonus where you can receive up to $200 in free crypto. They also offer additional benefits for taking advantage of their app’s features.
When I had a couple hundred dollars, I would put it into my Coinbase account and sell it when it went up. I would then deposit more money and start to consistently invest in the market. During the last bull market, my account went from $1,000 to $21,000. However, when the market entered a bear market, my account started to decrease. At the lowest point, my portfolio was $233,000. But I was able to start making my money back and currently, my balance is $118,000 with $56,000 in all-time gains.
Here are some Lessons I’ve learned along the way of Cryptocurrency:
Lesson 1: Earn Additional Interest
One thing I love about Coinbase is the ability to earn additional interest on my investments. For example, I staked my Cosmos Atom and earned $1,400 in passive income with a 17.66% annual return. I also earned 3.3% with my Ethereum, making $608 so far. Staking allows your crypto to sit on the exchange and earn interest.
Lesson 2: Buy Crypto with Coinbase
Buying crypto with Coinbase is simple. Instead of buying directly on the app, you can save money by subscribing to Coinbase One, which offers zero trading fees for $30. They also have an advanced trade option for more professional trading.
Lesson 3: Link Your Bank Account
Linking your bank account to Coinbase allows you to easily purchase crypto. You can also send and receive crypto to and from other wallet addresses.
Lesson 4: Enhance Security
To enhance security, you can use a UB key for two-factor authentication instead of relying on your cell phone. Cold storage wallets, like Ledger or Trezor, are also recommended for storing your crypto securely.
It’s important to prioritize your own security. If you don’t plan on taking any action, I strongly recommend using an authenticator app instead of relying on text message two-factor authentication.
When it comes to investing in cryptocurrencies, I recommend sticking with safer, higher market cap assets like Bitcoin and Ethereum. While you may hear stories of people making a lot of money on meme coins, it’s important to be cautious. Many of these smaller tokens rely solely on hype, and it’s likely to end badly. We prefer to focus on high market cap tokens and invest for the future.
Conclusion
Understanding cryptocurrency and how it works is essential. if you want to participate in this new financial paradigm. By investing in cryptocurrencies like Bitcoin, you become part of a movement towards a more open and decentralized financial world. So, take the time to learn more about cryptocurrencies and their potential.