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Cryptocurrency : This article is only for beginners(cryptonoobs)

Have you decided to get into cryptocurrency trading, but don’t know where to start? Not sure you understand the basics of how these new generation currencies work? Here are some explanations and tips to help you invest in cryptocurrencies.

Understanding cryptocurrencies

First, you need to understand the principle of blockchain. A blockchain is a technology that allows value to be stored and exchanged on the internet without a centralized intermediary (Blockchain France definition). It is the basis of the cryptocurrency technology.

This technology is in fact a digital version of triple-entry accounting. It is in a way an accounting ledger:

  • digital;
  • anonymous ;
  • forgery-proof;

that records transactions on a decentralized system. Originally designed for Bitcoin, this technology has been adopted and perfected by other cryptocurrencies. A blockchain is a database that contains the history of all exchanges made between its users since its creation.

This database is secure and distributed: it is shared by its various users, without intermediaries, which allows everyone to verify the validity of the chain.

A cryptocurrency, also known as a token, is a decentralized digital currency that uses cryptographic algorithms and a blockchain protocol to ensure the reliability and traceability of transactions. It is the unit of exchange used on the blockchain ledger. Entirely virtual, it is stored in a digital wallet protected by a secret code belonging to its owner.

How to invest in cryptocurrencies?

Bitcoin was the first cryptocurrency, appearing in 2008. Since then, more than 3,000 crypto-currencies have been created. Today, Bitcoin serves as the benchmark cryptocurrency. The easiest way to obtain crypto-currencies is through an online exchange platform. There are more than a dozen of them.

The management fees ;

  • the level of security;
  • the number of cryptocurrencies available ;

vary from one platform to another. To choose the platform that suits your situation, comparisons exist. The trading volume is a criterion of confidence and success of a platform.

If you are just starting out, opt for a platform that has a simple interface and offers the most popular cryptocurrencies. Once registered on the platform of your choice, you will be able to deposit funds directly in euros by bank transfer or with your credit card to buy one or more cryptocurrencies of your choice.

If Bitcoin is the reference currency, new currencies are emerging from innovation of blockchain applications. These new operating systems aim to be more robust, interactive and scalable than current applications.

There are different types of cryptocurrency management wallets

The cryptocurrencies you hold are stored in a wallet. So if you start buying cryptocurrencies, you will need a wallet. This one allows you to:

  • store ;
  • send ;
  • buy ;
  • sell ;

your cryptocurrencies. However, there are several types, both online and physical. For beginners, it is recommended to choose a platform wallet. The advantage of multipurpose platforms is that you can use the wallet available on the platform, but also make cryptocurrency transactions.

Some tips for a successful investment

As with any investment, the first tip is to diversify your investments. Do your research and analysis and invest in several cryptocurrencies that look the most promising to you. Stay informed about the prices of your currencies, as digital currencies are very volatile. To make your life easier, choose an exchange platform that allows you to both manage your wallet and buy and sell your cryptocurrencies.

Be vigilant about the security of your wallet. Use a strong password and the most secure login offered by the platform. Start by investing small amounts and don’t expect quick gains.

The cryptocurrency market is a risky and very volatile market. It offers a very good opportunity to make gains, but you can also lose your investment very quickly.

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