When it comes to investing in cryptocurrencies, the various existing alternatives must be studied before making the final decision. In the next lines, we give you some advice on this.
What are cryptocurrencies?
Cryptocurrencies are means of digital exchange, not issued or controlled by any banking entity or belonging to any specific country, which may be used worldwide and, through which, goods or services may be acquired through electronic transactions. Its value will be determined by the number of users, so that the greater the number of subjects that use it, the greater its attractiveness in the market.
In this sense, a virtual currency could be considered as a representation of digital value, not coined by a central bank or by a credit agency. Some of the most outstanding cryptocurrencies are, for example, Bitcoins (the most known by the public, created in 2009 with an initial value of 0.17 cents), Ripple (or better known by its abbreviation XRP with a method of change). Of own currencies) or Litecoin (alternative option to Bitcoin, characterized by a faster transaction time).
Tips for investing in cryptocurrencies
When it comes to investing in cryptocurrencies it is very important to consider that this type of currency can be acquired without the need for any intermediaries to intervene and, although any amount can be invested, the fact is that it is advisable to acquire whole cryptocurrencies. In these cases, the minimum amount that is usually recommended is about one hundred dollars, which is approximately equivalent to 80 euros, depending on the type of change that is generated at each moment.
One of the great advantages of cryptocurrencies like Bitcoin is that they have convertibility in each and every one of the traditional currencies.
As with any type of investment, we must diversify to minimize the risks. When investing you have to look at aspects that go beyond the price and the trend. Decentralized cryptocurrencies, such as bitcoin, allow unique and exclusive use and grant greater freedom.
To invest in cryptocurrencies you have to open an account in an exchange such as Poloniex, Bitfinex or even Coinbase. From these spaces, you can easily acquire cryptocurrencies. Once you have your account open, you can access from anywhere else. The most capitalized ones such as Bitcoin can be changed to traditional currencies.
Coinbase is the best known given that it acts as a good traditional bank, but those who own the private keys are them. You could say that the user only has the password of their database, which could be exposed to cybercrime, something very similar is what happens with the exchange houses. However, there are other alternatives to Coinbase such as Coinomi and Mycelium for Android phones or Bread Wallet (exclusive for bitcoin) and Loaf Wallet (exclusive for litecoin) for iPhone phones.
However, we must remember that the great returns of bitcoin have a price, in the sense that they involve risks, they are volatile and there is always the fear that everything is a bubble. We must not forget that overnight, the investment could disappear. That is why it is very important to be careful about investing all the money we have saved.
To know in greater depth the repercussions of these cryptocurrencies in the market, there are business schools like IDE CESEM that through its Fintech course will bring the student all the changes that the financial sector is experiencing with the arrival of the new disruptive technologies.
Google’s ban on its advertising
Through its consumer protection policy, Google has chosen to ban advertising ads related to cryptocurrencies or what they themselves call “unregulated or speculative financial products.”
Google will veto these ads, to the point that those responsible for this type of advertising actions must have a certificate, which will only be available in some countries, before being able to advertise in Adwords.
With this measure, Google will make the cryptocurrency exchanges, advisory firms, and virtual wallet companies have less influence when it comes to connecting with new customers. This measure follows a very similar action carried out by Facebook, which last January announced that it prohibited any advertising action on cryptocurrencies.
These prohibition measures will also cover so-called “contracts for differences” and binary options negotiations that will allow investors to speculate on the rise or fall of prices.
And you? Have you come to investing in cryptocurrencies? What was your experience like? What recommendations would you make?