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10 Must-Knows Before You Invest in Cryptocurrency

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Invest in Cryptocurrency

Cryptocurrency is designed to work like any other, as a medium of exchange through the use of cryptography that serves the purpose in creating and controlling additional units, known as coins or tokens. Cryptography serves the purpose of verifying the transfer of assets. Where forex is controlled by central banks, cryptocurrency is decentralised and a distributed ledger is used in transactions.

Cryptocurrency has become substantially more popular in the past three years with the market cap of all cryptocurrencies reaching around $260 billion. By the end of 2017, it had surged and reached a $520 billion market cap.

What Should You Know Before You Start Trading Cryptocurrency?

invest in cryptocurrency

1. Substantial resistance from professionals

With the increase in popularity, the trading of cryptocurrency, and cryptocurrency itself has faced a lot of opposition. Especially from Wall Street professionals – such as Warren Buffet and Jamie Dimon – and financial regulators. 

2. Blockchain technology

Cryptocurrency is transferred through the use of blockchain technology which acts as a public ledger that records all transactions. Cryptocurrency coins, or tokens, are stored on this blockchain.

Most cryptocurrencies have their own blockchain and depending on the size, some transactions are executed significantly faster than others. Bitcoin transactions, for example, take longer than Litecoin transactions.

To learn more, check out 10 Best Cryptocurrency Trading Platforms ( Reviewed )

3. Ease of access and affordability

Cryptocurrency can be bought and sold at any given time, anywhere with minimal barriers to entry.

Larger cryptocurrencies – such as bitcoin and ether – are substantially more costly and this often puts a lot of traders off without considering that each coin across cryptocurrencies are bought in fractions as well. Traders can invest in cryptocurrencies such as bitcoin with a relatively small amount.

Crypto-platforms differ and there are fees involved with trading these currencies that may exceed any profits made, thus traders need to ensure that they understand the full cost before they invest.

4. Regulatory Issues

Strict regulations are in place to ensure that consumers and investors (and their funds) are protected through the provision of tools and remedies to minimise loss and damage, but with cryptocurrency, there is no central regulating authority that offers such.

In fact, cryptocurrency is still unregulated in many African countries. 

Traders who invest in cryptocurrency need to fully understand that there is no security that the coin’s value will be retained.

5. High volatility

Due to cryptocurrency being an unsecured investment along with a  lack of regulation, cryptocurrency can be manipulated, and large price swings are frequent.

Cryptocurrencies can substantially gain or lose half of its value within a day resulting in significant risks when holding crypto as they can potentially create big losses for investors. 

6. Difference in trading platforms

Cryptocurrency is bought and sold on trading platforms that facilitate such transactions where cryptocurrencies can be exchanged for others as well as fiat currency.

These platforms are often not authorised or licensed by reputable regulatory authorities and there is additionally a lack of minimum requirements that the cryptocurrency issuers are subjected to before their currency may trade on a platform.

In addition, some exchanges are not monitoring trading activity to identify manipulative trading behaviour.

7. Cybersecurity risks and threats

Exchanges are often victims of cyber attacks as they hold their users’ cryptoassets. Hackers set out with the purpose of obtaining funds. Unfortunately, exchanges are hacked often, disrupting trading activities and causing a loss of user funds.

You might be interested: Breakout Forex brokers that is changing Africa.

8. Coin availability

There is a finite amount of bitcoin in circulation, and this adds to the reason why bitcoiners trust it more than conventional currencies, as money can be printed for various reasons, including economic and inflation purposes.

Bitcoin is limited to 21 million coins. This supply can not be artificially increased.

9. The risks involved with wallets

Cryptocurrencies are transferred with a degree of anonymity, with the wallets resembling that of an individual’s actual wallet. The same detrimental risk involved with losing one’s wallet, applies to cryptocurrency wallets.

Even though there are numerous trading platforms that offer the option for such a wallet to be linked to a trader’s username and password, it increases vulnerability to cyber attacks should the trading platform be targeted.

10. ICOs and precautions that have to be taken

Initial Coin Offerings (ICOs) are similar to IPOs (Initial Public Offerings) where companies introduce a coin to the market, instead of shares.

There are thousands of cryptocurrencies globally and each companies have set their sights on their cryptocurrency becoming the next bitcoin. Traders should take care, as with investing in IPOs, not to do so lightly.

The risk involved with investing in ICOs should be evaluated thoroughly as traders stand a great chance of incurring losses substantially larger than what they can afford.

Before investing, investors should watch for trends in the news and wait for professional commentary on new ICOs.

Final Thoughts

Cryptocurrency has seen an influx in growth and popularity due to consistent growth in the direction of a more digitalised world. But as with all investments, there are still great risks involved along with the chance of gaining profits.

Traders need to evaluate their exposure to risk as well as their willingness and whether they can afford such risk. Cryptocurrency is overtly easy to access and trade but thorough research is needed.

Traders need to ensure that they evaluate trading platforms and providers of trade in cryptocurrency to ensure that with reasonable measure, client funds are not compromised.

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How to Earn Digital Currency Online in 2020

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earn digital currency

The following is a guide on how to earn digital currency online in 2020. This guide lists five ways.

Earn Digital Currency Online through Trading

You can earn digital currency online through trading on peer-to-peer (P2P) exchanges like Paxful. Trading could mean that you are exchanging one digital currency for another. Instead of getting paid in your local currency for selling bitcoin for a profit, the buyer can pay you in another digital currency like ether.

Trading on P2P exchanges could become a full-time job and earn you a living. On Paxful, for instance, you can post your sale offers and wait for users to buy from you. To increase your sales, you should have good feedback from users you have traded with previously, your selling price should be attractive, and you should have a high trade volume.

Furthermore, you can earn crypto by selling the gift cards you are not using. Some of the gift cards you can sell on Paxful for crypto include iTunes, American Express, Nike, Sephora, and Macy’s.

Participating in Affiliate Programs

Affiliate programs are arrangements where individuals earn commissions in crypto for onboarding new users. Such programs are great opportunities to earn extra income, especially if you believe in the company’s service or product.

For example, you can earn 50 percent of the escrow fee on Paxful when your friends (tier one affiliates) buy bitcoin on the platform. Additionally, you can earn ten percent of the escrow fee when your friends (tier two affiliates) purchase bitcoin on the P2P exchange.

Paxful pays commissions in bitcoin. Once you have earned at least USD10 in BTC, “you can cash out your earnings into your Paxful wallet anytime.”

To become a successful affiliate, you should understand the product or service you are recommending to your friends. Also, it would be best if you are a user of this product or service. People are more likely to try out an exchange, for instance, if you can prove that it is working for you.

Joining the Paxful Ambassador Program

Young AfricansPaxful’s ambassador program is suitable for individuals that believe in the P2P exchange and financial freedom. As an ambassador, your job is to tell as many people as you can about Paxful and to help them become users.

The initiative has three levels: peer, ambassador, and associate. Each level has several benefits and specific tasks that individuals should accomplish. For example, you will earn $5 as a peer each time your referrals complete their first trade on Paxful.

Individuals that join this program are eligible for affiliate program earnings. Furthermore, you will be invited to all Paxful events in your region, giving you a chance to increase your crypto knowledge and build your network.

Freelance Writing

Writing for crypto companies is another great way to earn digital currency. You can find freelance writing opportunities with crypto news sites, exchanges, crypto projects, and blockchain companies.

Crypto writing gigs can pay you in cryptocurrencies or company tokens. When it comes to the latter, ensure that you can easily exchange it for major cryptocurrencies before accepting payment.

You can apply for crypto freelance writing opportunities on Crypto Jobs, Cryptocurrency Jobs, Freelancer.com, Crypto Jobs List, Upwork, and Simply Hired.

Becoming a Crypto Social Media Influencer

If you are a crypto enthusiast with a large following on social media, you can advertise crypto products and services in exchange for digital currencies.

When advertising for crypto companies, ensure that you understand their product or service. Alternatively, use the product or service first before recommending it to your audience. To start earning digital currency online as a crypto influencer, you should actively reach out to companies with pitches.

With these five methods of earning digital currency online in 2020, you can start making extra income in the comfort of your home. All you need is a multi-coin wallet, a computer, a smartphone, and an internet connection.

Next, read where to purchase bitcoin in Africa by learning the difference between P2P marketplaces and centralised exchanges.

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How to Buy Your First Bitcoin: A Step-to-Step Guide

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Buy Your First Bitcoin

So, you have finally decided to get on board the bitcoin ship and are wondering how to buy your first bitcoin. This guide will take you through the process of purchasing bitcoin on Paxful.

How to Buy Your First Bitcoin

Paxful is a peer-to-peer marketplace where you can buy and sell bitcoin. However, before you register a Paxful account, you should create a mobile wallet that will hold the bitcoin you purchase.

Some of the best bitcoin wallets that support multi-cryptocurrencies include Edge, Jaxx Liberty, and Guarda. These wallets are compatible with both iOS and Android. Mobile wallets are ideal because of easy accessibility. You want a wallet that enables you to check your bitcoin regularly. Also, you can send and receive bitcoin easily through a mobile wallet.

Some of these wallets are also compatible with other devices. As a result, you can access them on a computer or your browser as extensions.

To create a wallet, follow these steps:

  • Download the app from the App Store or Play Store
  • Once it has installed, open it, and follow the prompts

Creating a wallet is simple. You should, however, remember to write down your wallet’s backup phrase and store it in a secure place. The phrase is important because it will give you access to your wallet when you get a new phone or when you want to open it on a different device.

Furthermore, you should secure your wallet with a strong password. If possible, add two-factor authentication. To get a more secure wallet, buy a cold wallet like Trezor or Ledger.

Buy Your First Bitcoin on Paxful

Now that you have a wallet, you can buy your first bitcoin. Firstly, you will need to create an account on Paxful. To do this, follow the steps below:

  • Visit the Paxful
  • Click “Create Account”

Paxful 1

  • Enter your email address and password
  • Complete the puzzle for verification
  • Open your email and verify it

Paxful 2

  • Paxful will have given you a username. Change it according to your preference. You can only change your username once, so choose wisely
  • Upload a picture of yourself
  • Enter your phone number and verify it by entering the confirmation code Paxful sends you
  • Write your bio, change your email preferences and save changes
  • Set answers to the security questions provided and save. The security answers come in handy when you need to change your phone number
  • Next, click “Verify ID.” Watch the video provided to understand how it is done
  • Verify your home address according to the instructions given

After sending your identity details, wait for Paxful to approve your application. It is crucial to keep in mind that you cannot buy Bitcoin on Paxful until you verify your identity. Therefore, since the verification and approval process will take some time, prepare in advance by getting the following:

  • A PNG or JPG photo of the front and backside of your government-issued ID
  • Good lighting for Paxful to capture a picture of your face
  • A utility bill, bank statement, or credit card statement, showing your full name, city, residential address, and postal code. Paxful does not accept a P.O. Box address and requires proof of address in PDF, JPG, or PNG.

Buying Bitcoin: The Process

Once Paxful approves your application, you can now buy bitcoin. Log into your account and click “Buy Bitcoin.” Paxful will show you a list of sellers from your country. Next, take these steps:

  • Explore the sellers from your country by clicking on their usernames. On their profile, you will see their trade volumes, how many people trust them, the number of trades they have carried out, the number of trade partners they have, and the positive feedback they have received. This information will help you decide who to trade with. Note that trust and positive feedback are important in peer-to-peer trading.
  • Before you hit “Buy,” check the buying limit of each seller, the payment method, and how much they are selling BTC above the current market price. Additionally, check the time it will take the seller to send you bitcoin after you make the payment.

Paxful 5

  • Once you find your preferred offer, click “Buy” and enter the amount you want to spend. Paxful will show you the amount of bitcoin that you will receive. Also, confirm that you are okay with the seller’s requirements before proceeding.

Paxful 7

  • Click “Buy Now” and send payment as per the seller’s instructions. Paxful offers live chat between traders. Therefore, you can discuss the payment option with the seller. You can also use live chat to ask the seller questions.
  • Click “Pay” and the seller will confirm your payment. If you sent the payment successfully, the seller will release the bitcoin to your Paxful wallet

Paxful uses secure escrow to hold bitcoin from the seller as you make your payment. As a result, you are protected from being cheated.

Transferring your Bitcoin

When you complete your transaction, click the “Wallet” tab to view if your BTC has arrived. Once it hits your wallet, you will see a new balance clearly stated. Now, you can transfer the bitcoin to the mobile wallet you created or you can spend it directly from the Paxful wallet.

To transfer bitcoin from Paxful to another wallet, click “Send” and paste the address of your bitcoin mobile wallet. The BTC should appear in your mobile wallet in a few minutes. It is easy to do this if you use the Paxful app. That way, you can carry out the transfer on your mobile phone.

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4 Things to Do Do Before Investing in Bitcoin

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Before Investing in Bitcoin

Investing in bitcoin can be an exciting and profitable opportunity that is unlike other investments that you have made previously. However, investing in bitcoin can also be a big commitment that can put you and your finances at risk if you do not take the right precautions.

Here are four things you should do before you invest your money in bitcoin.

1. Brush Up on Your Cryptocurrency Knowledge

Like with every new opportunity that you are interested in, the first step that you should take before investing is to research this type of investment. Research is vital to find out everything that you need to know about how cryptocurrency investments operate, how much you can expect in returns, and how you can develop a successful strategy. Many online guides can help you to do this. For instance, CryptoVantage can guide you to the best crypto wallets for you and your investment strategy.

2. Know How to Protect Yourself

Protecting yourself is of vital importance when you are deciding to invest in cryptocurrencies like bitcoin and to ensure that you are not bowled over by the many risks that are associated with cryptocurrency and other forms of investing. These risks include the possibility of hackers accessing your bitcoin, incidents of fraud, and a heavily fluctuating market.

To avoid your bitcoin from being stolen by cybercriminals, you should never leave large amounts of bitcoin on exchanges. You should also update the anti-virus software on your computer and make sure that you have installed a firewall, in addition to using a strong password on cryptocurrency platforms.

3. Look at Your Finances

Before you decide to invest in bitcoin, you need to decide how much money you can afford to part with. You should not rely on being able to get this money back as cryptocurrency is a risky asset class whose value increases and decreases regularly.

Once you have decided how much you are willing – and can – invest in crypto, you should then set aside a small test amount. This will enable you to try your hand at cryptocurrency and practice your strategy without the worry of losing all of your money if something goes wrong or if your strategy is not as effective as you at first hoped.

4. Become Part of the Trading Community

Becoming part of the trading community for cryptocurrencies and bitcoin is extremely important if you want to hear about the latest developments and receive advice from seasoned professionals. To do this, you should consider heading on to cryptocurrency forums, joining a local networking group, or choosing to attend a nationwide event that can help you to hone your trading skills and make the most out of your investment for the future.

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