Cryptocurrencies are garnering a lot of interest from Indian investors. More than 15 million Indians are already buying and selling digital currency like Bitcoin, Dogecoin and Ether, putting them on par with the 23 million traders in the United States.
Crypto investments have increased from roughly $200 million to nearly $40 billion in the last year. The tech-savvy millennials who find it easier to invest in crypto than gold and are
open to high-risk, high-reward investments are driving this dramatic increase.
The Supreme Court reversed the RBI Bank's two-year-old ban on cryptocurrency trading in March 2020, prompting a 10-fold spike in new user signups at Mumbai-based CoinDCX and a 545
percent increase in site visits from India at international exchange OKEx a month later.
Despite its popularity, cryptocurrency may be extremely perplexing. Here's a beginner's guide on the basics and what you should know before you begin investing.
First, What is Cryptocurrency?
Cryptocurrency is a digital currency that can be exchanged online for goods and services. Cryptocurrency is commonly referred to as "decentralised money" since it is stored,
generated and processed without the involvement of a central bank or government, allowing transactions to be completed anonymously.
Cryptocurrency is a type of digital asset that is built on a network that is distributed over a large number of computers.
Blockchain is the technology that enables cryptocurrency to function. Blockchain is a decentralised technology that handles and records transactions across numerous computers that cannot
be modified, erased or hacked into.
The security of this technology is part of its appeal.
A cryptocurrency is a complex computerised code that prevents double-spending and counterfeiting.
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How many cryptocurrencies are there & how much are they worth?
According to CoinMarketCap.com, a market research website, more than 10,000 different cryptocurrencies are traded publicly. And cryptocurrencies continue to grow in popularity, with initial coin offerings, or ICOs, being used to raise money.
According to CoinMarketCap, the total value of all cryptocurrencies was more than $1.9 trillion on Aug. 18, 2021, down from a peak of $2.2 trillion in April. The entire value of all
bitcoins, the most widely used digital currency, was estimated to be over $849 billion, up from recent lows. Despite this, bitcoin's market value has fallen from a peak of $1.2 trillion in April.
How to store cryptocurrency?
A blockchain wallet, like a bank account or a Demat account, is used to store your cryptocurrencies, also known as cryptos. The wallet makes payments and exchanges go as smoothly as
possible. Because all transactions are cryptographically signed, they are safe.
It's pretty similar to sending or receiving money using PayPal or any other digital wallet available today, only you're dealing with bitcoin.
However, one must understand the basics of cryptocurrency investing. Here's how you can invest in cryptocurrency in India, including bitcoin, ethereum and dogecoin.
- Identify a reliable crypto exchange:
Crypto exchanges are the platforms where people can buy and sell their digital assets because there is no established structure for trading in cryptocurrencies yet.
WazirX, CoinDCX,
and CoinSwitch Kuber are three of the most popular exchanges in India.
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- Register for an account:
Create an account on the platform after you've chosen a crypto exchange to trade on. After you've created an account, decide how much you want to invest and what you want to
invest in. Carefully read all of the platform's policies. To prevent any fraudulent activities, the platform would require the submission of documents as proof.
- Create a trading account:
Before buying cryptocurrencies, one must have money in their account. Money can be transferred from one's bank account to a specific exchange account. Ensure that both accounts are
linked before sending funds.
- Make investment accordingly:
After the accounts have been linked and the crypto exchange account has money, the next step is to decide which coin to invest in. Bitcoin is the world's largest and most popular
cryptocurrency, followed by ethereum in terms of market capitalization.
Tether, Dogecoin, XRP, Cardano, and Binance Coin are some of the most popular coins.
After you've made your purchase, make sure you store the account codes to secure it from threats like hacking. The currencies should be kept in a crypto wallet, said the expert.