Bitcoin and cryptocurrencies as a whole are having a crazy year right now, with bitcoin reaching heights few would have expected. As with any cryptocurrency boom, many outsiders are getting curious and want to start investing.
Crypto is one of the most popular financial assets at the moment, but also one of the most misunderstood. Even gurus in the industry will admit that a lot of what they say is pure speculation and that no one truly knows what’s going to happen in the markets. This is why you need to be informed before jumping head-first and betting your home on the next crypto craze. Let’s take a look at some of the things newcomers still don’t realize about buying cryptocurrencies.
You Can’t Just Buy Crypto
One of the things that surprises a lot of people when they first try to buy crypto is how complex the process is. Exchanging your dollars for cryptocurrency is a bit more complicated than you might think.
You first need to look at a cryptocurrency wallet if you want your funds to remain safe. These are not actual wallets but will store a copy of your public and private keys.
The public key will be visible to everyone and works like a mailbox address. The private key, on the other hand, will be like a key to your mailbox. This means that only you should have it. This also means that there is no way to get what’s in the mailbox if you lose the key.
This is why the very first thing you should do is look at a robust wallet. What complicates things even further is that some wallets are made for specific cryptocurrencies, like the Stargazer Wallet. So, before you even start, you will need to research different wallets and wallet types, as they will be crucial when it comes to storing your assets.
Crypto is a Beginner Friendly Asset
Far from it. Just because it’s on every YouTube channel and every evangelist is calling it the money for the people, there are few investments that are as cryptic, no pun intended, like crypto. Like we said earlier, even insiders are completely in the dark about certain movements with these currencies. Some have plummeted or skyrocketed overnight with observers scrambling for answers after the fact.
This is not like stocks with set calendar dates and clear events that you can point to. Some major movements may be caused by something seemingly benign, as we saw with dogecoin after it went on a wild ride after Elon Musk made an appearance on SNL. So, if you wanted to start with something, we do not advise you to do it with crypto.
Bitcoin Is not Like Legacy Payment Systems
A lot of people still seem to be under the impression that you can buy a cup of coffee with your bitcoin, but it has not reached that point yet. A dirty secret in the crypto industry is that bitcoin is not the best at handling small transactions, and there’s a strong chance it never will be without an add-on solution. Transactions can take a very long time with bitcoin and fees on small transactions can be prohibitively high, so don’t expect it to replace legacy systems anytime soon.
Now that you know a little bit more about crypto, we hope you’re going to make wise decisions with your first investments. We would suggest that you learn as much about crypto and investing as possible before you get started.