Technology 2018-03-16T21:32:35+00:00

TOP 4 QUESTIONS TO ASK BEFORE INVESTING IN CRYPTOCURRENCIES

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Making the right decisions is the ultimate foundation for success in your investment. If you make an uninformed decision, the end product will be undesired results – failure. Like any other investment, cryptocurrency trading calls for effective decision making. You need to do your calculations perfectly to avoid making errors. Importantly, you must decide whether to buy Bitcoins, Ethereum, Litecoin, or other altcoins. Also, you should know the right time to exchange your crypto coins for fiat currency.
As you know, any decision-making process requires you to answer several questions before coming up with the way forward. The same approach is applicable in this niche. Here are some questions you need to ask before investing in the digital coin trading:

WHAT IS A CRYPTOCURRENCY?

The fear of missing out (FOMO) may act as the driving force while joining the crypto trading. As such, you may join without knowing what they are and what is involved in this business. Before you decide to sail on these promising adventure, you need to know what a cryptocurrency is. In a simple definition, a cryptocurrency is a form of digital currency with value that one can use to purchase for goods or services. However, unlike the hard cash, it is not touchable. Also, it is decentralized meaning no central bank regulates them.
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ARE THEY LEGAL?

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The fact that no one regulates the cryptocurrencies can instill a thought of it being illegal. As such, it may scare you and think it is not something you should involve yourself with. To clear the cloud, the legality of Bitcoins and other altcoins relies on a country by country. For instance, Bitcoins usage is legal in the USA while it is illegal in China.
Also, since it is a new concept, countries did not have laws or policies to control their usage or distribution. Hence, the lack of laws does not make them illegal. However, the lack of regulations makes the trade a green ground for fraudsters and hackers. So, caveat emptor (buyer beware) is a principle rule in this business.

HOW DO YOU OBTAIN THEM?

After understanding the legality and definition of virtual currency, the next question is how you can own them. Do you buy Bitcoins and Ethereum, or how do you become a cryptocurrency investor? These questions are essential to any new entrant. The main ways of owning digital currencies are mining and buying from a crypto exchange.
For mining, you need to invest in blockchain technology. The technology involves mathematical computations where winners are awarded through tokens which have monetary values. Each cryptocurrency has its rigorous mining process and awarding rate. To become a miner, you need to invest vast amounts of cash on powerful processors particularly if you want to mine Bitcoins.
For this reason, you can opt for the next option which is buying through crypto exchanges. There are several exchanges in Canada where you can buy Bitcoins and altcoins. All you need is to open an account with the exchange, deposit fiat currency, and start trading.
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IS CRYPTOCURRENCY A WORTHY VENTURE OR JUST A BUBBLE?

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When the Bitcoin – the first cryptocurrency – went into the limelight, there were speculations from renowned financial experts that it is a bubble. They warned people against investing in it. For those with the iron heart, they gave the warnings a deaf year. Nine years down the line, the investors are now the new dollar billionaires in town. However, regardless of the increase in the value of various cryptocurrencies, it is important to make conscious decisions when investing in them.
While it is a worthy venture, you should always diversify your investment. Remember, you should not store your eggs in one basket. This statement is true on reflecting the current happenings on Bitcoin value.
All in all, answering the above questions will offer you a masterpiece in your next move as regards to buying and selling of Bitcoins and other cryptocurrencies.

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