How to make money investing in cryptocurrencies

How safe and profitable is an investment in cryptocurrencies? We’re analyzing what cryptocurrencies are and how they can bring you money.

Cryptocurrencies have been in our lives for at least 12 years, and it has recently become known that Facebook will also enter the dance, launching its own cryptocurrency, called ‘Libra’. But why are cryptocurrencies so popular? How can you buy them? Is it in your best interest to enter the market or the cryptocurrency exchange? In this article, we will answer all these questions.

Cryptogony

We start blasphemously, by paragraphing out the concept of Theogony, to give the definition of cryptocurrency: this is a word first recorded in 1998 by Wei Dai in the correspondence list of the Internet collective of cypherpunks, supporting the idea of a new form of money based on a distributed database (Blockchain), in open software, which users have the ability to modify (forking).

This new kind of money is not based on a central institution but obeys the norms of Peer-to-Peer transactions. Ten years later, Satoshi Nakamoto will publish in the same mailing list the first specifications of bitcoin in the now famous white paper that was soon filed in public.

How much does a bitcoin cost today?

The current exchange rate of bitcoin on the European money market is around 18.000 USD.

How do I start?

Here’s what you need to start with making money with cryptocurencies

  • An Internet connection and a computer.
  • A bank account linked to your cryptocurrency account.
  • A storage space for your currency (digital wallet).
  • Create a Coinbase account in order to gain full knowledge of the cryptocurrency exchange and start your first transactions with them.

It is an intangible currency, the value of which is linked to the common trust between investors, its integration into the financial markets and the public interest in its use. Each cryptocurrency presents its own specificities in terms of digital analysis. Each transaction, however, occurs as follows:

When the consumer makes any purchase online, the banks validate the transaction. In the case of Bitcoin, however, transactions occur without any third-party intervention, through a system called hashing. When a person pays another person with bitcoin, the Blockchain computers of each cryptocurrency check the validity of the transaction based on solving a related mathematical problem. If the result of the problem is valid, then the transaction unfolds normally and is registered in the cryptocurrency database.

All transactions of each cryptocurrency are available and transparent to anyone who wishes to keep a record, and it is worth stressing that there is no element of returnability and/or cancellation of transactions. Any transfer to and from Bitcoin is considered completely secure and it is extremely difficult to make losses or thefts.

Crypto Trading Vs Investing: the Differences

Here there is a significant difference between the two concepts:

Investing concerns those who want to exploit some profits in the long term through currency purchases, investing mainly in currencies that do not show serious fluctuations in their value.

Trading is the exact opposite: it mainly concerns small investors who start with small amounts, who aim to profit, buying, and selling currencies according to their rises and falls. For example, the average price fluctuation of Ethereum starts at $338.54 per currency and ends at $392.90.

Epilogue

Cryptocurrencies are often paralleled with the digital revolution of the emergence of the Internet in the late 1990s. Those who rushed to invest in shares in digital technology companies then faced heavy losses.

The cryptocurrency, of course, is a slightly different revolution: it is a currency that practically abolishes the concept of the bank. As revolutionary as it sounds (and it is), it is more prudent to wait a few more years to see how much it will stabilize and how reliable the map of crypto-transactions is in terms of our daily lives.

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