by Hodler Ash 
Cryptocurrency, simply put, refers to a virtual or digital currency that can be used to complete purchases and transactions. What makes it different from the money in your online banking account is that it’s built on blockchain technology, which then allows the currency system to work without depending on central financial intermediaries like banks, brokerages, and exchanges. Blockchain technology makes use of computers that are linked through a peer-to-peer network, and it functions like a ledger that records and manages the transactions that used the currency. This, then, secures the system and maintains the integrity of the transactions.
According to a recent survey published by CNBC, about 1 in every 10 people have cryptocurrency investments, and there are plenty of reasons why people put their money in decentralized digital currency. Some do so because they can easily trade using the system. In the case of Monero (XMR), for example, an aspiring trader only needs to have access to capital, a basic computer, reliable internet connection, and the best XMR wallet so they can start growing their money. Some digital wallets like XMRWallet.com can even work completely online, which means that the program doesn’t have to be installed on the investor’s computer.
At the same time, many traders and investors like that many cryptocurrencies have a high potential for growth and volatility. This can lead to exciting experiences for newbie and seasoned traders alike. There are also others who get into crypto because of the level of anonymity it provides users. Many of the latter believe that they should be able to use their assets any way they want without being censored by government agencies or financial institutions.
A Quick Look at the History of Cryptocurrency
The popularity of cryptocurrencies has grown so much in the past few years. The same CNBC survey reported that more than 65% of their respondents started using this asset just last year. However, the idea of using anonymous digital currencies is more than a few decades old.
The concept for a digital cryptographic currency was first conceived by American cryptographer David Chaum in 1983, but the first decentralized cryptocurrency, Bitcoin (BTC), was only created in 2009. The next decade saw the launch of tens of thousands of cryptocurrencies, each with unique qualities that appeal to different types of users. Within the same period, the value of BTC also rose tremendously, with each unit now costing around USD 57,000.
As of 2021, El Salvador and Cuba have accepted BTC as legal tender. The success of BTC and the life-changing results of investing early and holding on to the currency has helped boost the popularity of cryptocurrency trading within the general public.
Look Before You Leap: A Guide for Newbie Crypto Investors
Before investing in Bitcoin, Ethereum (ETH), Monero, Dogecoin (DOGE), or other popular cryptocurrencies, it’s important for traders to do their research first. The features and qualities of digital currencies, their prices, and their future valuation can vary wildly. Some people choose to invest in a particular currency because it’s widely used by the traders they deal with, while others trade in a specific currency because they like the level of security and anonymity it provides. Still, there are others who see great value in investing in new or emerging currencies, hoping that these newcomers will go big like BTC in the next few years.
Cryptocurrencies can definitely be a part of a well-balanced asset portfolio. Before putting a significant portion of their assets on digital currencies, though, would-be investors should make themselves intimately familiar with the benefits and risks that apply to their preferred coin. Getting to know the technology behind the currency can also help users make the most out of this asset. For example, it’s not uncommon for BTC users to trade and mine the currency using specialized rigs.
And just like any other investment, users should not put money that they cannot afford to lose in cryptocurrencies. Ideally, traders should have an overall financial plan and see how cryptocurrencies can help them reach their goals. They should then use this as a guide on how much of their assets should be invested in crypto.
It’s also a good idea to determine beforehand how much time they want to devote to trading. Some people make trading decisions daily, weekly, or monthly, while others buy currencies and hardly touch them for the next few months. It’s perfectly acceptable to hold on to digital assets for long periods. This is a strategy that experts generally deem as a solid way of building wealth, even when dabbling with crypto.
All in all, trading in cryptocurrencies and getting to know the system behind each currency are both quite engaging and entertaining activities. Users would be wise to treat crypto just like any other investment and avoid emotional decisions while trading—a method that many experts agree to be one of the fastest ways to lose money. The level of enjoyment that they derive from dabbling in this asset class shouldn’t keep users from acknowledging the risks that come with this investment.
