Cryptocurrencies are high-risk assets; their market is characterized by high volatility (prices can fluctuate significantly) and diversity. In investments, there is a rule: "Invest only what you are willing to lose." In the cryptocurrency market, one can lose a significant part or even all of their investments if a mistake is made.
Step 1 - study the basics of cryptocurrency, blockchain.
We start exploring the crypto market with an understanding of what blockchain is, how it works, what cryptocurrency is, what coins exist, and what determines data protection.
Cryptocurrencies are any currencies in digital, virtual form - digital assets. The main digital asset is Bitcoin (Bitcoin). Other significant types of currencies: Altcoins, Ethereum (Ethereum-Etm), Litecoin (Ltc), Stablecoins, Meme coins, Utility tokens, and others. An investor should understand how Bitcoin and Ethereum function.
Bitcoin and other coins are based on blockchain technology - a decentralized database that underlies all cryptocurrencies. To ensure security, protect, and anonymize cryptocurrency transactions, cryptography (encryption) is used.
Step 2 - understanding what mining is, how it is related to cryptocurrencies and cryptocurrency emissions.
Mining, also known as extraction (from English mining - the extraction of minerals), is the activity of creating new structures (usually referring to new blocks in the blockchain) to ensure the functioning of cryptocurrency platforms. For creating another structural unit, a reward is usually provided through new (issued) units of cryptocurrency and/or transaction fees.
A miner can be either an individual or a company that has the special equipment for this purpose.
Step 3 - study how cryptocurrency wallets and exchanges work.
Cryptocurrency exchanges can be centralized and decentralized. Centralized exchanges are those that have a coordinating center; they are managed by a company, team, or organization.
Decentralized ones, on the contrary, operate without intermediaries, without a central management. Trades on them take place thanks to smart contracts and blockchain.
Step number 4 - choose a cryptocurrency for investment.
There are tens of thousands of types of cryptocurrencies; it is important to choose those that best match your goals and risk profile.
First of all, a newcomer needs to understand how Bitcoin works - the most well-known and established cryptocurrency. It is often associated with digital gold and its analogs.
Next is Ethereum, the second largest cryptocurrency by market capitalization, known for its platform for developing other projects or solutions for smart contracts and decentralized applications. You should also know all other projects considered coins, such as Ripple (ripple), #binance coin, etc.
Each exchange has its own tokens, the most popular altcoins, which also need to be studied, as they may grow and yield good results in the future. However, investing in them carries certain risks.
Step 5 - choose a cryptocurrency exchange.
The leading global exchange today is considered to be Binance.
When choosing an exchange, attention should be paid to:
Security (the presence of two-factor authentication during registration).
The possibility of 'cold' storage of funds.
The amount of commission per transaction (it should be as low as possible).
Convenience of the interface (individually for each user).
User reviews.
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