Investing in Bitcoin and Blockchain Technology

Investing in cryptocurrencies is becoming a hot trend among investors of many types and backgrounds. However, you should be aware of the risks involved if you plan to do this. Once you know about these risks, you may still find that the rewards outweigh them by far. If you want to be part of a revolutionary paradigm shift in the way currency is exchanged, then investing in the Bitcoin and other cryptocurrencies is probably a logical step for you to take. You can start investing today with a trading app such as Bitcoin Lifestyle.

Some History on the Bitcoin and Altcoins

The concept behind cryptocurrencies like Bitcoin was to create a currency that wasn’t run by a centralized institution, like the Federal Reserve. This type of currency was meant to provide an alternative to the fiat currency established by governments. By utilizing cryptocurrency, which is secured via cryptography, traders are given an alternative design to resist the corruption associated with traditional currency.

Once Bitcoin was established as a leading cryptocurrency, other options followed after. It was simply a Bitcoin Revolution. These options are now known largely as altcoins, and they include an impressive assortment of choices. Some of the most commonly known altcoins today include Litecoin, and Dogecoin. Some others like Nxt, are known as Blockchain 2.0 coins as they also provide a platform for projects to utilize blockchain technology in ways other than as a currency. For example, the developers of Nxt are launching Nxt 2.0, known as Ardor, in the third quarter of 2017 which will allow people to easily create their own blockchain as a child chain of the entire system.

Knowing the Risks

One detail to keep in mind is that one of the top selling points of cryptocurrency – that it serves as an alternative to traditional currency – also creates a somewhat vulnerable dynamic for the investor. Cryptocurrencies aren’t regulated by centralized institutions (banks), but that also means that they aren’t backed by the government, and they aren’t covered by government insurance programs.

Because cryptocurrencies are essentially competing with government currencies, they may be used by some people as a means of evading taxes. Thus, some governments may choose to ban or restrict the use of such currencies – or they may take over and regulate them. They are also regarded as property by the IRS, making them susceptible to taxation.

While cryptocurrencies do provide a more secure alternative to corruption, they could still pose a security risk if private encryption keys are stolen by thieves. Since Bitcoin transactions are irreversible, this could be very problematic for investors. Additionally, fraudulent individuals or entities could sell counterfeit cryptocurrencies to unsuspecting investors.

Investors should also know the market risks of investing in cryptocurrency. Like any other investment, various cryptocurrencies can fluctuate in a volatile market that involves 24/7 trading. That is why it is important to know how to trade properly.

A Few Basics on Investing in Cryptocurrency

Doing your research is crucial when you’re investing in Bitcoin and altcoins. Before you get started, make sure that you understand exactly how blockchain technology and cryptocurrencies work. Be sure you understand what you’re investing in, and consider an altcoin’s transparency before you invest in its cryptocurrency or blockchain technology.

Explore which sources are trustworthy before you make decisions based on their advice. Pay attention to the trends, and get your information from reliable news outlets that cover the industry.

Be patient and give the process time. It’s highly unlikely that you’ll earn an overnight fortune from trading cryptocurrencies, but you could certainly get a reasonable return on your investment. If you make an error in judgment, learn from it and implement your newfound knowledge when you trade in the future.

You might invest in cryptocurrencies in a variety of perspectives. You could buy altcoins with the expectation that they would increase in value over time as they are adopted. You could invest in Blockchain 2.0 platform coins with the expectation that these will be utilized in the future and thus increase the value of the token. Or, you can even invest in companies that utilize this technology. The possibilities are exciting for investors who wish to explore cryptocurrencies and blockchain technology.