Cryptocurrency has been around for over a decade now. During that time, Bitcoin and other cryptocurrencies have been making news headlines all over the world. We’ve all heard the stories of ordinary people that got rich from getting into Bitcoin early, and you might think that you’ve already missed the party.
However, the truth is that cryptocurrency is only just getting started, and the whole industry has a lot of room to grow. The nature of Bitcoin means that as demand for cryptocurrency keeps increasing, the price will have to increase to keep up. It’s certainly not too late to start buying cryptocurrency. This guide will help you understand why this is true and help you on your way to finding the right place where you can buy Bitcoin or any other cryptocurrency of choice.
Cryptocurrencies have been made possible by the invention of distributed ledger technology, also known as blockchain technology. Basically, it is a special set of rules that allows a network of many users to come to an agreement about something without any trust in each other or need for a third party. In the case of Bitcoin, it is a set of rules that allows the Bitcoin network to effectively come to an agreement about how many Bitcoins each user has.
This is revolutionary. Bitcoin is the first entirely digital decentralized currency. Using the Bitcoin network, anyone anywhere can send money to anyone else. The most powerful thing is that there is no central point of control to manipulate the currency, and nobody can shut Bitcoin down (without shutting down the internet). These properties have made cryptocurrency popular around the world. Many people like the idea of a seamless all-digital currency, while others use it as a hedge against fiat currencies that are prone to inflation. This is especially true in countries like Venezuela where the local currency has become almost useless.
The price of Bitcoin has skyrocketed due to this popularity. In 2012, one Bitcoin was worth around $5. By 2014 that same Bitcoin was worth over $400, and at the end of 2017, it was worth well over $10,000. Similar 100,000x price gains have been seen in other cryptocurrencies such as Ethereum, too.
Despite this growth, it’s likely that cryptocurrencies are just getting started. The total cryptocurrency market capitalization (the value of all cryptocurrencies added together at current prices) is still only a couple of hundred billion dollars. That might sound like a lot, but in the financial world, it’s chump change. The total value of the world’s stock markets is around 70 trillion, the value of all the world’s money is around 30-90 trillion, and the total value of all the gold in the world is over $7 trillion. If cryptocurrency is going to even partly replace the functions of cash, gold, or fiat currencies, there is a lot of room to grow.
Additionally, cryptocurrencies like Bitcoin have a built-in limit to their supply. For the Bitcoin network, there is a maximum of 21 million Bitcoins that can ever exist, and over 80% of those have already been mined. It means that increasing demand for Bitcoin will have to be met by rising prices. In other words, if Bitcoin usage is going to grow, its price will have to go up too.
Once you’ve decided you want to take a risk and buy some cryptocurrency, the first thing you need to know is where to get it. There are a few options, but if it’s your first time buying cryptocurrency, you want to go with one of the established cryptocurrency exchanges.
When choosing an exchange, it’s essential to pick one that’s got a good track record. While decentralized currencies themselves don’t require any trust, buying, selling, and storing your cryptocurrency on an exchange do.
One of the best and most trusted cryptocurrency exchanges is CEX.IO (UK). This is a great option for a few reasons. It has a good reputation built up over the years, supports multiple payment methods (including credit cards), has many different cryptocurrencies you can buy and sell, and supports withdrawals so you have the option to cash out. What’s more important, CEX.IO is one of the most user-friendly exchanges out there – this makes it especially enticing for beginners. There, you can buy cryptocurrency with fiat (such as EUR, GBP, USD, or RUB) in a few clicks and with reasonable fees. However, to become a happy owner of cryptocurrency you’ll have to create an account and verify your identity before you can start buying on CEX.IO.
Once you’ve created an account on CEX.IO, you’ll notice that there are many different cryptocurrencies to choose from. Bitcoin, Ethereum, XRP, and DASH are a few examples of hundreds. There are even alternative versions of Bitcoin such as Bitcoin Cash.
Deciding which currencies to buy is a personal choice. Each cryptocurrency has its own technology, community, philosophy, and uses. Make sure you are well educated on any cryptocurrency before you invest in it. A good place to start your cryptocurrency portfolio is with the original and most famous cryptocurrency, Bitcoin.
It’s important to remember that cryptocurrencies are financial assets and may be subject to investment and taxation laws in your country. You need to find out what laws are relevant to you to avoid getting into any trouble. For example, in the US, cryptocurrencies are considered property and are subject to income and capital gains taxes.
If you use CEX.IO, you’ll be getting a reasonable price for cryptocurrencies you buy. If you decide to buy somewhere else, such as a peer-to-peer exchange, you need to make sure you are getting a fair price. An easy way to check is on one of the Bitcoin price-tracking websites. Here you’ll get an average price on different Bitcoin exchanges.
Most importantly, always take care when buying cryptocurrency. It’s a risky asset and the value could collapse at any minute. Then, there are the endless crypto scams you have to try to avoid too. As a general rule, consider cryptocurrency as an extremely high-risk investment. Only invest what you are ready to lose and consider any gains you get as a bonus. Especially, don’t get caught up in the hype the next time the Bitcoin price explodes. Be sensible and enjoy the emerging cryptocurrency revolution!