How to invest in Cryptocurrency In India
Bitcoin was nothing more than an interesting phenomenon for the millennials and the technocrats. Despite this, technicians and futurists forecasted the bright and overwhelming future of cryptocurrencies, which now are drawing the interest of millions as an investment.
Cryptocurrency is based on blockchain technology. That’s a chain of information registration and distribution that is not controlled by any single institution. These tokens are not well understood and are highly unregulated, most financial institutions don’t want to deal with them.
In a little more than a decade, cryptocurrencies have become a household area of interest. Some are now coming to see cryptocurrency as an alternative global currency that will eventually replace sovereign currencies. But such thoughts are far-fetched fantasies.
In India, The honorable Supreme Court has provided legitimacy to cryptocurrencies, which has brought the market to the sharp face with the Reserve Bank of India. However, the legal status has given the digital token market a much-needed boost.
What is cryptocurrency?
Cryptocurrency is a digital payment system that doesn’t rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.
Cryptocurrency received its name because it uses encryption to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and public ledgers. The aim of encryption is to provide security and safety.
The first cryptocurrency was Bitcoin, which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.
Why invest in cryptocurrency?
Online exchanges like Coinbase have made buying and selling cryptocurrencies easy, secure, and rewarding.
It only takes a few minutes to create a secure account, and you can buy cryptocurrency using your debit card or bank account.
You can buy as little (or as much) crypto as you want since you can buy fractional coins. For example, you can buy $25.00 worth of bitcoin.
Many digital currencies, including USD Coin and Tezos, offer holders rewards just for having them.
On Coinbase, you can earn 1% APY— that’s much higher than most traditional savings accounts.
How does cryptocurrency work?
Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders.
Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets.
If you own cryptocurrency, you don’t own anything tangible. What you own is a key that allows you to move a record or a unit of measure from one person to another without a trusted third party.
Although Bitcoin has been around since 2009, cryptocurrencies and applications of blockchain technology are still emerging in financial terms, and more uses are expected in the future. Transactions including bonds, stocks, and other financial assets could eventually be traded using the technology.
How to buy cryptocurrency
You may be wondering how to buy cryptocurrency safely. There are typically three steps involved. These are:
Step 1: Choosing a platform
The first step is deciding which platform to use. Generally, you can choose between a traditional broker or a dedicated cryptocurrency exchange:
- Traditional brokers. These are online brokers who offer ways to buy and sell cryptocurrency, as well as other financial assets like stocks, bonds, and ETFs. These platforms tend to offer lower trading costs but fewer crypto features.
- Cryptocurrency exchanges. There are many cryptocurrency exchanges to choose from, each offering different cryptocurrencies, wallet storage, interest-bearing account options, and more. Many exchanges charge asset-based fees.
Step 2: Funding your account once you have chosen your platform, the next step is to fund your account so you can begin trading. Most crypto exchanges allow users to purchase crypto using fiat (i.e., government-issued) currencies such as the US Dollar, the British Pound, or the Euro using their debit or credit cards – although this varies by platform. Crypto purchases with credit cards are considered risky, and some exchanges don’t support them. Some credit card companies don’t allow crypto transactions either. This is because cryptocurrencies are highly volatile, and it is not advisable to risk going into debt — or potentially paying high credit card transaction fees — for certain assets.
How to invest in Cryptocurrency In India
The Reserve Bank of India outlawed cryptocurrencies in India in 2018. However, the bitcoin sector in India took off when the Supreme Court overturned the restriction. Businesses and startups saw the demand as an opportunity and established various cryptocurrency platforms to let investors purchase and trade bitcoin efficiently. If you’re interested to invest in Cryptocurrency, think about doing the following:
If you are still keen on investing in crypto, check out these easy steps you can follow to begin your journey:
Decide a crypto coin to invest in
Do your research well. Check out the price movements of different cryptocurrencies on different tracking platforms such as CoinMarketCap and others. You can also speak to reliable experts to help make a decision. Once you have taken an informed decision on which crypto to invest in, everything else becomes relatively simpler.
Choose the Cryptocurrency
It is the biggest challenge for any crypto investor. One must have heard about just a few top names like Bitcoin, Ethereum, Dogecoin, and a few more. Surprisingly, there are over 5,300 digital tokens available in the universe of digital tokens. It makes the choice more complex.
The story of cryptocurrency is just a decade old. Bitcoin is the most traded one, given its volume and value. For many investors, it is almost synonymous with ‘cryptocurrency’. However, many other cryptocurrencies have performed much better than the largest ones.
Choose a payment option
Before you buy a crypto coin, you need to add money to your fund to enable purchases. You can add funds via UPI, net banking, bank transfers, or even a cryptocurrency wallet. Different crypto exchanges will charge different transaction fees for certain payment options. So, it’s highly advised that you research well before going ahead.
Choose the Platform to Buy
Bank and investment brokerage firms do not offer to buy cryptocurrencies. These digital tokens can only be purchased from dedicated cryptocurrency exchanges. All the people trading in the most popular cryptos, and of course, you should expect to pay a fee for both buying and selling.
One can buy cryptocurrency either directly from the exchange or from another peer who is selling his/her current holding. However, investors must understand that cryptocurrency trading is entirely anonymous
This is probably the most important step to ensure your crypto assets are properly secured. While most exchanges will offer an online wallet option, some investors find it too risky as staying connected to the Internet means your account is open to possible hacks.
Secure your Crypto wallet
Safeguarding your cryptocurrency is an important aspect. It becomes more noteworthy if you are using cryptocurrency to buy products or if you have a hot wallet. So, when the crypto is online, one needs to make sure of its security. Usually, people prefer using a VPN (Virtually Private Network) to ensure secured and encrypted online transactions.
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