In this article, I will tell you about crypto currency in such a way that I will tell you complete information about it so that you will not have any doubt about it. In this article we will know about its basics in this article we will talk about 3 things.
1) if it makes sense to own cryptocurrencies?
2) what are crypto wallet’s? How to set up a crypto wallet?
3) How&which cryptocurrencies to buy?
If it makes sense to own cryptocurrencies?
Currently everyone is taking, and more than 10 crore Indians have already invested in cryptocurrencies. After hearing all this you must be getting fomo so let’s address this question, why crypto currency’s have gained momentum in the last 1-2 years. Most of us are familiar that whenever there’s a problem in U.S they have the only solution. Let’s print more money. As a result dollar value is keep on decreasing and a lot of people have started looking out for possible alternatives.
We’re not saying that bitcoin could replace dollar, but could address this problem In a simpler manner. Let me explain how. We all are familiar that bitcion is limited in number (21 million) but unlike dollar there’s no option to print this is the primary reason why it has been getting so much attention in the past 1-2 years. That’s fine but does it make sense to own cryptocurrencies? Owning a crypto for short term ia a dollar coaster ride this is what you guys have experienced but let’s see this investment for long term perspective crpytocurrency as an investment is not too old infact first bitcoin was mined around 2010-2011 let’s check the last 10 years data.
As you can see bitcoin last 10 years CAGR is more than 11X that of NASDAQ’s returns For a second, we will assume it happens with every new investment which is why bitcoin may have Hooten so much attention in the last 10 years. Now let’s analyses market caps data.
As per the market cap bitcoin is the 6th largest company in the world, With a market cap of $1.2 trillion dollars. One thing is clear, that we cannot ignore crypto as an investment
The next section is probably the most important part for understanding crypto currencies please understand this carefully, we will talk about crypto wallets
Firstly we’ll understand what are crypto wallet’s?
Crypto wallets like your actual wallet is a place where you can safely story or crypto currencies to access crypto wallet we could use two type of keys public key and a private key A public key is like your email ID. Basically ot Link’s to address when you can send and receive transection. Whereas a private key is like a password to that public key. Private key assures that you owns that assets of that address so in order to access your crypto wallet you need both public and private key but because private keys are difficult to remember so you will also get a seed phrase.
Seed phrase is a combination of 12-24 words this is how they looks
You can share your public key with anyone, but you can never share your private key with anyone. Also this SEED PHRASE is by far the most important thing which you must remember. If you forget your phrase some how, or it is misplaced where it was stored so there are chances that you will lose access to all your cryptocurrencies.
These crypto wallets are of 2 types :
(2) Non custodial wallets
This part is a little complicated but it’s really important to understand this Hosted wallets are like your bank lockers. Bank lockers are yours to speak but actually the banks owns those lovers. So you’re also planning to use exchange like – coinDCX, WazirX, etc to set up an account or wallet so that is a posted wallet. you can access these wallets with simply a username & password. But the downside of hosted wallets is that you don’t owns the wallet and not even the keys these keys are owned by the crypto exchange, not by you. You have just rented the wallet & it’s keys from the exchange just like yours bank lockers. Non custodial wallets are like your home safe. Completely owns both the safe and its keys. Examples of non custodial wallets in case of cryptocurrencies are – metamask, rainbow, etc. If you think you should also open a Non-custodial wallet then it’s really simple
- Install metamask for your web browser.
- Click on the metamask icon and click get started.
- Select “create a wallet”.
- Create a password for metamask.
- Write down your seed phrase and store it somewhere secure.
Is that simple
We have discussed this topic wallet is like your identity in cryptocurrencies and it is extremely important to understand that.
How & which cryptocurrencies to buy?
Now as you understood the concept, there are 2 ways to buy cryptocurrencies :
(1) By opening an account on any of the exchanges if you remember we called it Hosted wallets.
(2) you can get Non-custodial wallets through metamask. As explained previously with non – custodial wallets you completely own the wallet unlike in case of exchange wallets. if you hold some cryptos in any exchange so you can easily transfer it in your metamask wallet.