Investing in Crypto: A Beginner's Guide to Digital Assets
Written on
Understanding Crypto Investments
This article serves as a tactical guide for anyone looking to begin their investment journey in various crypto assets, including cryptocurrencies, NFTs, and BitClout.
In the past, getting started was straightforward: simply download Coinbase, and you were ready to go. However, with the rise of numerous platforms, apps, and exchanges, the landscape has become significantly more complex. Some cryptocurrencies can be purchased using a Bitcoin wallet, while others require different wallets. Below are three primary methods for investing in crypto assets and the types of purchases you can make through these platforms.
Section 1.1: Cryptocurrencies
Let’s start with a fundamental question: how does one purchase cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH)? For this explanation, we will use BTC as an example.
To acquire these currencies, you will need three essential elements:
- Funds for Purchase: This can be a credit card or PayPal.
- A Digital Wallet: This is where your Bitcoin will be stored after purchase.
- An Exchange: This could be an app or website where you can buy BTC, similar to how you would exchange USD for EUR at a bank.
Be prepared to provide identification, as most exchanges require proof of identity before selling you any currency.
Coinbase is the leading exchange in this space, soon to go public, and it offers a secure and reputable platform with various cryptocurrencies. You can download their app to register and verify your identity easily. Other notable exchanges include CEX and Coinmama, which are also popular for straightforward transactions.
Once you purchase BTC, you'll have a Bitcoin wallet with a unique ID. If you buy ETH, you will have an Ethereum wallet instead. Each wallet can hold only one type of cryptocurrency. You can trade these assets for cash, swap them for other cryptocurrencies, or transfer them to others. The interfaces of these apps resemble regular stock trading applications, displaying various currencies and their trading prices throughout the day.
How To Invest in Crypto as A COMPLETE Beginner [2024 GUIDE]
This video provides a comprehensive overview tailored for individuals just starting their journey in cryptocurrency investment.
Section 1.2: Non-Fungible Tokens (NFTs)
Now, let's shift our focus to NFTs, which represent assets rather than currencies. In this context, they function as digital collectibles.
NFT marketplaces resemble physical galleries, where items are displayed for browsing, but here they exist online. The best comparison might be eBay, where you can either bid on NFTs or purchase them at a fixed price. The largest marketplace for NFTs is OpenSea.
To buy NFTs, you will need cryptocurrency, specifically Ether (ETH), as OpenSea exclusively accepts this form of payment. The purchasing process on OpenSea is quite intuitive, similar to traditional online shopping.
It’s worth noting that while OpenSea is the largest NFT marketplace built on Ethereum’s blockchain, there are other platforms utilizing different blockchains. Each marketplace supports NFTs based on its specific blockchain. Thus, NFTs acquired on platforms like Binance Smart Chain can only be traded on marketplaces that support that blockchain, meaning they cannot be sold on OpenSea.
Chapter 2: Exploring BitClout
Before diving into BitClout, it’s important to understand its unique nature. BitClout is a cryptocurrency that allows you to invest in influencers or their posts through creator coins.
However, there are two critical points to remember:
- Purchase: You can only buy BitClout using Bitcoin.
- Selling Restrictions: Currently, you cannot sell your BitClout.
This concept is relatively new, emerging in March 2021, and has generated significant buzz, with some concerns about its potential being a Ponzi scheme. The primary worry is that while you can invest, cashing out is not possible yet. You will need to hold your BitClout for a designated period before you can sell it.
If you are inclined to take risks in this evolving digital landscape, exploring BitClout might be worth considering. Just be aware that you could lose your Bitcoins in the process.
In conclusion, this guide does not constitute investment advice or express any opinion regarding the potential value of these assets. Always conduct your own research before making financial decisions.
How To Invest In Crypto For Beginners [Full Guide]
This video serves as a full guide for beginners looking to explore the world of cryptocurrency investment.