How to Get into Cryptocurrency

Cryptocurrency has been the breakthrough industry of the century, and it has led experts to predict that crypto and it's underlying blockchain technology will disrupt many industries, including finance and law. But its complexity can be a hurdle for new investors. What exactly is a cryptocurrency, and how can new investors join the industry?

#How to Get into Cryptocurrency

Cryptocurrency has been the breakthrough industry of the century, and it has led experts to predict that crypto and the underlying blockchain technology will disrupt many industries, including finance and law. However, its complexity can be a hurdle for new investors. What exactly is a cryptocurrency, and how can new investors join the industry?

#What Is Cryptocurrency?

A cryptocurrency is a digital asset that uses cryptography, an encryption technique, for security. The data from cryptocurrency transactions are stored on a decentralized system called a blockchain. The cryptography of the blockchain makes it almost impossible to counterfeit a cryptocurrency or double-spend, but blockchains can be used to record different types of information beyond cryptocurrency transactions.

Although they are primarily used for transactional purposes, some cryptocurrencies offer specific functions, like rewards, community participation, and security. Cryptocurrencies are not distributed by a central authority like a central bank issues the fiat currency of a country—it’s traded on software like OpenDAX. The decentralized structure of cryptocurrencies has played a key role in the growth of the industry.

#How to Get into Cryptocurrency

Now that we understand what a cryptocurrency is, how does a new investor with little to no knowledge onboard the industry?

#Get a Feel for the Industry

One of the most critical steps to take in beginning to buy and sell crypto is learning about the different currencies offered and the different sectors within the industry. Beyond the thousands of crypto projects, learning how the blockchain works will give you a foundational understanding of cryptocurrency. Before you start to teach yourself about all in one crypto trading software, a familiarity with blockchain technology will put you on sound footing and allow you to make informed decisions.

#Join an Online Crypto Community

One of the easiest ways of onboarding crypto is by joining an online community of cryptocurrency enthusiasts. In the fast-paced, ongoing stream of developments, joining an active community of investors and enthusiasts provides one of the best means of learning about crypto. 

An additional benefit to joining a specialized community is streamlining the knowledge and information shared on these platforms to your preferences. Crypto Discord and Telegram offer some of the best online crypto communities for onboarding users.

#Consider Your Reason for Investing in Crypto

The meteoric rise of several cryptocurrencies has made the industry almost synonymous with making millionaires overnight. There's a very slim chance of that happening, and entering into crypto to make quick money can increase your risk of falling for scams and rug-pull projects. Your reason for entering the space should be well-thought out and realistic.

#Read Cryptocurrency White Papers

Reading the white paper of a cryptocurrency is essential for anybody looking to invest in any project, and you should consider it a cause for concern if a project doesn't have a white paper or it isn't easily available. The white paper should tell you everything about the project and what it plans on achieving. If you are not convinced about the feasibility of a project, it's probably a sign it isn't worth your money. 

#Investing in Crypto Without Owning Coins

There are a couple of options available for investors looking to gain significant exposure to crypto without owning crypto itself. First, buying the stocks of a crypto or blockchain company or a company that has invested in the technology is one of the easiest ways of getting investment exposure to crypto without owning it.

Alternatively, investors not willing to take the direct stock approach can put their money in diversified index funds or exchange-traded funds (ETFs) instead. Most ETFs include publicly traded companies with some level of crypto involvement and have a proven record of long-term growth.