In recent years, the buzz around cryptocurrency has reached a fever pitch. Everyone seems to be talking about Bitcoin, Ethereum, and even more obscure altcoins. I vividly remember my initial hesitation, wondering whether all the excitement was merely a passing trend.
As a former skeptic, I can attest to the transformative power of this digital asset class.What once seemed like a complex and intimidating realm has now become an accessible gateway to financial empowerment for opportunity.
Step 1: Make The Time For Education
When I first started roaming around with no knowledge about cryptocurrency or blockchain, I went head first on Discord app and got myself linked up on a NFT (Non-Fungible Token) market which first introduced me into the world of crypto communities where I bought my first NFT (Non-Fungible Token) and that was an experience in the into a different world !
I did not really know what I was doing except there buying and selling to make money and that’s when I realized that I needed to do more research on why these assets were getting popular !
So I backtracked and started my education journey with the fundamental of understanding cryptocurrency.
As I delved deeper, I also learned about various types of cryptocurrencies, each serving different purposes and operating on different principles. Bitcoin, as the first and most well-known cryptocurrency, paved the way for a multitude of altcoins, each with unique features and community-driven goals.
Understanding these differences has allowed me to appreciate the diversity within the crypto market and assess investments more strategically !
Step 2: Choose Your Centralized Exchange
Let’s get to the good stuff ! So you’re wondering how to MAKE MONEY with with all these introductory talks about understanding cryptocurrency so now you have to look into a reputable cryptocurrency exchange.
There are two things you should be doing at this point – checking the legitimacy of the exchange and checking their Discord servers.
You can check the legitimacy of the exchange by going to your securities exchange website just through a quick google search and checking whether the exchange website if legitimate.
Typically most or all of the exchanges have a Discord server link that you can join and can check official verified links to make sure you’re not clicking on a SCAM WEBSITE.
Once you have a basic understanding of cryptocurrencies, the next step is to select a reputable cryptocurrency exchange. When choosing an exchange, consider factors such as security, user-friendliness, trading fees, the spread between bid/ask pricing and the selection of cryptocurrencies offered. Always enable two-factor authentication on your account to add an extra layer of security.
An exchange is a platform where you can buy, sell, and trade digital assets.
You will typically see native cryptocurrency network assets for you to buy and sell meaning they can directly get deposited to an external decentralized wallet address for that specified network or blockchain only.
You will see these assets and networks supported on the centralized exchange website.
Importantly, if you tried depositing a NON-NATIVE ASSET to a NATIVE ASSET that is not compatible with the blockchain wallet it will not be accepted and could be lost FOREVER !
Examples of popular centralized cryptocurrency exchanges include Coinbase, Binance, and Kraken.
Step 3: Setting Up Your Wallet
Your next step should be to understand the difference between a centralized wallet and a decentralized wallet.
A decentralized wallet is typically a hardware or software wallet.
For example, your centralized exchange will have a defaulted generated centralized wallet address for each supported receive native cryptocurrency assets to the centralized exchange.
If you want to withdrawal from a centralized exchange to an external address with a decentralized wallet, you would have to input the address that is generated from the blockchain you are on.
For example, on the Cardano ecosystem, the most popular decentralized wallet is called Eternl. Once you add a new wallet with a name and account with it, you will get a generated phrase that is typically 12 phase and 24 phase keywords.
Write these keywords down physically and store it away digitally to prevent risk of hacks. Once all setup, you will see a “receive” tab and you will see an address you can share to receive payments.
A hardware wallet (cold wallets) are physical encrypted private keys to safely store your native crypto assets. Examples include Ledger Wallet, Treznor Wallet, or Keystone Wallet.
They are typically the same setup but will have to physically sign messages on the physical key and connect them to a phone or computer every time you want to make a transaction.
I own both software and hardware wallets. Software wallets are connected to the internet, making them convenient for daily transactions. However, this connectivity poses a risk. To counter that, I decided to invest in a cold wallet—a physical device that stores my cryptocurrencies offline.
Even though it requires a few extra steps to access my crypto, I sleep better at night knowing my assets are far safer from online threats.
Step 4: Diversify Your Portfolio
Once you’ve set up your wallet and funded your account, it’s time to start exploring the diverse world of cryptocurrencies. While Bitcoin and Ethereum are well-known and established digital assets, the crypto market offers a wide range of alternative coins (altcoins) with unique use cases and potential for growth.
Diversifying your portfolio is a crucial strategy in the volatile and rapidly evolving crypto market. By investing in a diverse range of cryptocurrencies, you can mitigate the risks associated with any single asset and potentially maximize your returns.
When building your portfolio, consider factors such as the project’s whitepaper, the development team, the community, and the overall market sentiment. It’s also essential to research the various use cases and potential applications of different cryptocurrencies, as this can help you make informed investment decisions.
Remember, the crypto market can be highly volatile, so it’s crucial to invest responsibly and only with funds you can afford to lose. Diversification and risk management should be at the forefront of your investment strategy.
Step 5: Dive into Staking – Earning While You Hold
After finally acquiring some cryptocurrency, I discovered the fascinating world of staking, which took my cryptocurrency experience to the next level. Staking involves holding cryptocurrencies in your wallet to help maintain the operations of the blockchain network.
In return, stakers earn rewards, which can be an appealing way to grow your investment.
I highly recommend this doing this through your decentralized hardware wallet as centralized exchange do offer that option but more riskier on the backend if something were to happen without your knowledge.
I initially dove into staking without considering the risk factors. While some coins provide high rewards, they may also be more volatile. Make sure to do thorough research into the APY% or the annual percentage yield as there could be more risk involved with a higher return on investment.
Therefore, I researched various staking options within my exchange and ultimately chose a few stable cryptocurrencies.
This way, I could sit back and watch my assets GROW PASSIVELY, all while supporting the network’s maintenance.
Staking offers a unique opportunity to earn in the decentralized finance (DeFi) arena typically above what traditional market offer.
For example consider higher tier cryptocurrencies like Injective, ATOM, and Celestia for higher staking yield percentages are they are already as more establish blockchain ecosystem network as they offer more than 5% in yield staking on their validators after commissions which are above what traditional markets offer !
Conclusion
The world of cryptocurrency offers a transformative opportunity for individuals to take control of their financial futures. By following these five easy steps, you can confidently navigate the crypto realm and unlock the potential of this exciting and rapidly evolving asset class.
From understanding the basics to diversifying your portfolio and exploring decentralized finance, each step in this guide will empower you to become an active participant in the cryptocurrency revolution.
Remember, the crypto market is dynamic, and it’s essential to stay informed, exercise caution, and continuously learn and adapt as the landscape evolves.
Embrace the power of cryptocurrency, and embark on a journey towards financial freedom and personal empowerment. The future of money is digital, and the time to get started is NOW !