Let’s talk about the collectibility of cryptocurrency. The most talked about cryptocurrency are Bitcoin and Ethereum which have become an increasingly popular investment option since the rise of cryptocurrency. These two cryptocurrencies are regarded as the most established and well-known cryptocurrencies, and all I can think about are the gains. However, it is important to understand there are risks involved and you should only invest what you are willing to lose.
One advise before you begin collecting Bitcoin or Ethereum is you should first understand what these assets are and how they function. Bitcoin came out firstin 2009. It is touted as a decentralized network, which means it is not controlled by a centralized authority. The banking system is a centralized authority and bitcoin seeks to disrupt this by using a network of users that verifies and processes all transactions.
Ethereum, on the other hand, was founded in 2015 and serves as a decentralized platform for the development of decentralized applications, or “dapps.” Ether (ETH) is Ethereum’s native cryptocurrency which is used to pay transaction fees and computational services on their proprietary network.
How do we collect these assets in the first place?
Bitcoin and Ethereum can be purchased in a variety of ways, including:
Exchanges of cryptocurrencies: These are online platforms where you can buy and sell cryptocurrencies. Coinbase, Binance, Crypto.com and Kraken are some popular exchanges. They act like your stock market platforms where you need an account, verify your identity and deposit funds into it. Then you can buy and sell as you want.
P2P exchanges: P2P exchanges allow you to buy and sell cryptocurrencies directly with other people. Because you don’t have to pay the fees associated with using a centralized exchange, this can be a faster and less expensive option. LocalBitcoins and Paxful are two popular peer-to-peer exchanges.
Once you’ve purchased your crypto, you have to have secure place to store them to keep them safe. A digital wallet can help. A digital wallet is a piece of software that lets you store, send, and receive cryptocurrencies. Because cryptocurrencies are vulnerable to cyber attacks, you should keep your digital assets in a secure wallet. A cold wallet is recommended for storing large amounts of assets for added security. The two types are explained below:
Hot wallets are internet-connected wallets that are typically used for everyday transactions. Mobile wallets and web wallets are two examples.
Cold wallets: These wallets are not linked to the internet and are typically used for long-term storage. Hardware wallets and paper wallets are two examples.
Now that you know how to buy and store cryptocurrencies, let’s talk about the potential rewards and risks of investing in these assets.
The volatility of these cryptos provides opportunity for the most returns on investment. The opportunity of fulfilling tremendous gains is one of the primary advantages of investing in Bitcoin and Ethereum. Both of these assets have seen significant price increases in recent years. In 2017, the price of Bitcoin increased from around $1,000 to $20,000 in a span of just a short amount of time. Ethereum’s price has also saw huge jumps, rising from around $10 in 2015 to over $1,400 in 2021.
However, you need to understand that investing in cryptocurrencies is dangerous. The cryptocurrency market is highly volatile, with prices fluctuating quickly and unexpectedly. It’s also critical to be on the lookout for potential scams and frauds in the space, such as Ponzi schemes and bogus exchanges. Furthermore, because cryptocurrencies are not yet widely accepted as a form of payment, they may not be accepted.
Investing should thought of in a long-term perspective anyways and diversify your portfolio with Bitcoin and Ethereum can be huge in collecting large profits. Good luck and invest wisely.