Are you going to buy your first cryptocurrencies? This is the most important thing you need to know
Despite its massive growth in adoption and its widespread diffusion in recent times, there are still people who have not decided to enter the world of cryptocurrencies. Being a young industry, it is key to know certain details before starting to operate and enjoy the benefits of the new digital economy.
Even the consequences of the crisis have been transferred little by little to investment funds dedicated to cryptocurrencies. In August 2023, a study was published showing that 13% of these funds could close this year.
However, there are still those who want to start exploring the industry. In a survey conducted by the US cryptocurrency exchange Gemini, in which some 30,000 people participated, the latent interest in investing in cryptoassets became evident.
The survey also included countries in Latin America and Asia Pacific, where inflation and currency devaluation began to drive the adoption of cryptocurrencies. The paper claims that Brazil and Indonesia led the world in recent cryptocurrency adoption, with 41% of respondents in both countries buying cryptocurrencies for the first time last year.
Therefore, to start learning more about this new digital economy and start buying cryptocurrencies, it is key to be highly aware of what the process is like and, of course, what the benefits and risks are. Here is a short guide to what you need to know before buying your first cryptocurrencies.
What are cryptocurrencies and how do they work?
The first thing a person should understand before entering the world of cryptocurrencies is what they are and how they work. Cryptocurrencies are digital assets, that is, a new form of decentralized money that exists on the Internet, they fulfill the same function as traditional currencies, but they do not exist in a physical form, but are stored in a digital wallet.
One of their main benefits is that people can access them easily, without barriers. This translates into the fact that there are no major requirements to acquire them and it is not necessary to buy a full unit, you can acquire as much or as little as you want, at your own risk.
As for how they work, most cryptocurrencies are governed by blockchain technology, which is nothing more than a record of transactions that are stored in many computers (called ‘nodes’) around the world, and are constantly updated.
Each computer verifies that its version matches that of the others and, in this way, any attempt to alter the Distributed Ledger (DLT) in a malicious way is easily detected and eliminated.
Furthermore, with blockchain technology it is possible to build an immutable currency that cannot be counterfeited or altered.
The main difference between cryptocurrencies and traditional currencies is that, while the latter change their value according to the interests of banks, cryptocurrencies have their own algorithm. Also, cryptocurrencies can be sent all over the world through the Internet, in a matter of seconds, and at little or no cost.
What are the most popular cryptocurrencies?
Surely, most of those interested in acquiring cryptocurrencies have heard of Bitcoin and no wonder, as it is the currency that has the largest capitalization and generally sets the pace for the rest of the market.
Bitcoin (BTC) is acquired through mining. This is a process whereby ‘miners’ use the computing power necessary to verify Bitcoin transactions and add them to the blockchain to earn cryptocurrency rewards.
‘Miners’ are basically special node operators who secure the Bitcoin network by solving complex mathematical problems, ensuring that each “block” on the “chain” is verified with valid transactions.
Of course, Bitcoin is not the only cryptocurrency out there. Another popular one is Ethereum (ETH), whose principle is very similar to that of BTC, but transactions can have computer code attached to them, which is called “smart contracts”. What these smart contracts do is to program transactions themselves, so the code attached to the coin is executed in a decentralized network.
On the other hand, there is also Tether (USDT), which is a cryptocurrency known as a stablecoin, since its value is linked to fiat currencies or other physical assets such as gold. Tether is the most popular stablecoin and is permanently pegged to the value of the US dollar.
Another well-known cryptocurrency is XRP, which was created by the company Ripple and uses very similar technology to Bitcoin and Ethereum, but with some differences.
For example, XRP is not an open or decentralized crypto, as it is a “permissioned” network that is run by its creator. In addition, Ripple already created all the XRP that will exist, so they only control the supply of these crypto assets.
Finally, another recognized cryptocurrency to highlight is Monero (XMR). This crypto is among the most popular in a category of cryptocurrencies known as “privacy coins.” These types of cryptocurrencies aim to bring true anonymity to a blockchain.
Secure platforms to buy cryptocurrencies
In order to purchase cryptocurrencies, it is important to do so through the indicated websites or platforms, in order to avoid falling into scams and losing money. Currently there are hundreds of places to make these transactions, but the following list gathers the sites to acquire these digital assets safely and without risk.
- Stormgain: a simple and robust platform, which offers users the possibility of acquiring cryptocurrencies with their credit card. It can be operated using the website or the official app. It offers a welcome promotional code of 25 USDT (approximately $25) which can be obtained on the first deposit.
- Binance: another of the most recognized platforms for acquiring cryptocurrencies. With this service, which is available in Spanish, it is possible to find a large number of coins and allows credit card purchases and trading with leverage. The service has a mobile and desktop app, and commissions depend on the amount of money the user will spend, with a maximum of 0.1%.
- Coinbase: a good alternative to make secure purchases of cryptocurrencies. This platform allows buying cryptos by bank transfer or credit card with a 3.5% commission. It is the only exchange available for US traders, but it is generally considered one of the easiest for newcomers.
In addition to these three exchanges, there are other options such as Bittrex, Bitfinex, Kraken, Crypto.com or KuCoin, among others. Regional or Argentine exchanges such as Ripio, Lemon, Bitso, Bitso, Buenbit, Belo, Cryptomarket, Satoshi Tango or LetsBit, among others, can also be consulted.
If users who are just starting out opt to purchase their cryptos with the top names, they should not have any inconvenience, but it is still wise to always research the chosen platform before handing over your money.
Finally, it is relevant to keep in mind that the world of cryptocurrencies is very large, so it is necessary to constantly study and keep informed in order to make each investment with special care and, thus, obtain the multiple benefits of this new economy.