Investing in cryptocurrency

How to invest in cryptocurrency?

To start earning money on the cryptocurrency, you can of course purchase specialized equipment to encrypt information and receive remuneration in the form of bitcoins for your contribution to the IT system.

However, this requires expertise in programming and selection of advanced computer hardware, which is not among the cheapest.

Investing in cryptocurrency: purchase of bitcoin

You can also set up an anonymous cryptocurrency account and through the stock exchange buy a cryptocurrency property and hold it. However, this will pose two threats.

First of all, at a time when we make transactions on the cryptocurrency exchange, our funds are not on our account, but on the exchange account. Unfortunately, the short history of cryptocurrency already knows spectacular examples of the cryptocurrency exchange, which have been closed from day to day, disappearing with the funds of investors (Mt Gox ). There are also examples of cryptocurrency exchanges that have been robbed by hackers (Bithumb).

Secondly, if we lose our login and password to the account or someone steals it from us, we lose our cryptocurrency irretrievably, without being able to apply for help. There is no place where we can ask for the recovery of lost data or stolen bitcoins.

Whether we will have a profit from the above methods is largely dependent on whether the popularity of bitcoin will grow (or remain stable) and thus drag the course of bitcoin. And what if its value has already reached its peaks and starts to fall?

Investing in cryptocurrency: investing in CFD derivatives

The last method I present is to invest by means of contracts for the difference. But what is hidden under this mysterious term?

Foreign exchange contracts (CFDs) are derivatives that reflect the price of the underlying instrument. This means that CFDs' exchange rates follow the prices of their counterparts on the market.

Such a modern solution has several advantages, including the possibility to invest in increases and decreases in the price of a given instrument.

This may be considered an advantage, given that cryptocurrency prices are very volatile. At the same time, however, this also entails greater risks. In addition, there are certain dangers facing a bitcoin, which may influence the fall of his price in the future.

Competitive technologies

A lot of cryptocurrency has already been created, which offers competitive solutions for bitcoin. These are, among other things, successive ones in terms of size, cryptocurrency capitalization, such as Ethereum, Litecoin, Dash or Ripple.

Future viability

The question is whether bitcoin transactions will pay off in the future. Much depends on his course What can happen if the last bitcoin is extracted?

Legal regulations

Transactions through bitcoins are fully anonymous and operate outside the official tax system. They can be used for criminal purposes and thus may attract the interest of state authorities.

Number of transactions

At present, a maximum of about 2100 transactions can be performed every 10 minutes with a bitcoin, if the popularity of the system increases, it may turn out to be too little in the future.

Transaction frequency

Dealings every 10 minutes may turn out to be too rare and unattractive in the future, whether you think that the price of a cryptovalent will increase or lose value of CFD investments allow you to adjust your strategy to the current market situation.