Things to Know Before Investing in Cryptocurrency

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Cryptocurrencies, also known as virtual currencies, cryptocurrencies, tokens or cryptoactives, are actually digital money, which was created from a protocol and the underlying technology to transfer value over the Internet.



Today it is no secret to anyone that cryptocurrencies are the most economical and secure (to some extent) way to send value over the Internet, or money over networks. With Bitcoin or another cryptographic asset anyone transfers someone on the internet without intermediaries as if it happens with banks, exchange houses or the financial system in general.



The most well-known and dominant cryptocurrencies on the crypto market remain Bitcoin (BTC) and Ethereum (ETH),but the available catalog of cryptocurrencies is very broad in terms of their purpose, use and value.



The most common use that has been given to cryptocurrencies is to make fast and irreversible micropayments as well as investments in markets, but more complex financial operations are also being made thanks to DeFi or Decentralized Finance,which are taking cryptocurrencies to a new level. However, there are people who acquire cryptocurrencies for a speculative purpose, that is, who invest in cryptoactives to use them as a short-term or long-term investment, in the hope that they will increase their value, and thus obtain a return on investment.



To own cryptocurrencies, it is as simple as opening a Wallet or digital wallet either local on a PC or Smartphone, a Wallet using some web service or employing a physical Wallet (by hardware) that stores the cryptocurrencies securely.



Then, just by buying either, with fiat money using from a credit card, debit card or, from a bank account on some sites dedicated to the sale of cryptocurrencies, they are purchased and stored at the wallet address that has previously been created for this purpose.



There is also another way to obtain cryptocurrencies in return, and it is done through a process called "mining", in which a hardware or several of them are used, specialized in solving complex mathematical calculations to generate blocks on a blockchain, receiving back a reward for the work.



Before buying any cryptoactive, it must be understood that the market is highly volatile, and no one can guarantee that by acquiring a specific cryptocurrency today, tomorrow it cannot suffer a reversal of the market value, which subtracts from the capital invested in that cryptocurrency.



It is always necessary to understand that although the market value has repeatedly receded, who invested in Bitcoin in 2010, just $250, today has a fortune of several tens of millions of dollars, so long-term investment is always the best option. However, cryptocurrencies certainly do not have the backing of a government or a nation, so these cryptoactives do not have the same protections as trust money deposited into a bank account.



Be aware that if you store cryptocurrencies in any Wallet, provided by a third party, either through a company and it ceases operations or suffers a computer attack, your country's government may not be able to act to assist you in recovering invested capital, as you could with trust money that is stored in banks or credit unions.



The world of cryptocurrencies is increasingly regulated. More and more countries are joining in creating regulations that allow an increasingly secure environment to invest in cryptocurrencies, but it is always necessary to know the risks of online investments. As with any investment, no one can guarantee that you will make money immediately, because to do so, you need to go through a process of market knowledge, learning values.



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