Economies are run by the real money which is seen in the form of cash comprising of paper or coin currency. The currency and it’s value is set by the free market flow and the central authorities governing the movement of the currency. It is important to note that the currency we use to purchase good and services is also backed by an asset. In India gold bullion are used to back the physical currency traded in the country.
The trend of cryptocurrency is recent and the windfall gains earned by the people in the world has promoted its trade in the free market. So before we find out why and how to invest in cryptocurrency, let us first understand the meaning of cryptocurrency.
What is Cryptocurrency?
Cryptocurrency is a digital currency which is traded in a decentralized manner, in other words, we can say that cryptocurrency is not being controlled or regulated by any government or group of governing authorities, the value of currency is defined by the free flow of the market, i.e., the buyers and sellers.
It is also a paper currency, however, we cannot use it in the physical form like we use the money in physical form. The cryptocurrency works on the principles of cryptography.
Cryptography is a method of protecting information by sending it in the form of codes so that only those to whom the information belongs can only access it. This brings us to the point that cryptocurrency is traded in the form of codes and is used for trading in international market.
Types of Cryptocurrencies
Some popular cryptocurrencies that are in trend these days are:
Bitcoin - Bitcoin first came into the market in 2009 and since then business world has taken a different route. It is one of the first and foremost popular cryptocurrency in the world.
Litecoin - This cryptocurrency floated in the market in 2011 functions in a similar manner as to a bitcoin, however it has a transaction rate.
Ethereum - This cryptocurrency was launched in around the year 2015 with a unique feature of allowing smart contracts and DApps usage that leaves less or no space for any glitch or scam.
Zcash - Zcash cryptocurrency was first mined in late October 2016. For Zcash, silicon valley capitalists were able to raise over $3 million to complete its development.
How to Purchase Cryptocurrency?
Take a look at the process to purchase cryptocurrency and get ready to trade in International market like a pro:-
Open a Digital Wallet - It is only through digital wallet that you will be able to purchase cryptocurrency of your choice to trade goods and services in international markets as well without any interference from the government.
So here is the detailed procedure to invest using Crypto-exchanges
Here's a step-by-step guide to investing in cryptos thorough exchanges:
- Choose an appropriate Crypto-exchange for Trading
Choose/select an appropriate platform to get your account opened with the crypto exchange. You can get registered with crypto exchanges in India such as
CoinDCX Go, and
- Get KYC Done and Choose Payment Option
Getting KYC done is another essential step towards trading in cryptocurrency exchange. Documents such as PAN card, photo identity proof, address proof needs to be uploaded with the exchange where you register for trading. This is done to minimise the scope of fraudulent practices in future.
It is equally important to choose a payment option to deposits and withdrawals cryptos in your account. It is advisable to choose a payment option after checking the fee charges associated with each one of them and that best matches your pocket.
- Placing the trade order
It should be traded that cryptos can be traded 24/7 unlike share market trade where the market is open for limited no. of hours. After your order is complete, cryptos can be stored in digital wallets and/or you can even withdraw your money if you do not wish to store it in digital wallet.