4 Questions You Should Ask Yourself Before Investing In Cryptocurrency

by Andrew McGuinness     Jul 16, 2019

Cryptocurrency has been receiving a lot of attention lately. Many people are confused about how exactly digital currencies work, how coins are mined from a computer, and especially how people are making so much money through their investments. If you are tired of hearing about how much money your friends and family have profited from Bitcoin or any other cryptocurrency, and are ready to start making some investments and profits of your own, here are 6 questions that you should ask yourself before taking that step.

1. Where do I buy cryptocurrency?

Where you decide to buy Bitcoins is based primarily on your country of residence. If you live in a well-developed country, you will obviously have more options than if you live in a smaller, under-developed one.

The biggest coin broker in the world is Coinbase, which you should be able to use as long as you live in Canada, Singapore, USA or the U.K. If you live in Europe it is likely also accessible to you, a majority of European countries allow purchases from this coin broker. If your country is not included within this list, there is an exchange finder available on the website BuyBitcoinWorldwide where you can find a place to buy cryptocurrency of your very own.

2. How would I need to secure my digital currency?

As an owner of cryptocurrency, you will gain a few extra responsibilities. First and foremost, you are going to have the responsibility to keep your digital currency safe and secure. In order to do so, you will need to do a few things:

  • Keep a backup of your currency on a USB or external hard drive.
  • Avoid keeping your currency on a device that runs with Windows.
  • Use a Bitcoin wallet such as Ledger Nano S or TREZOR

Especially for those of you making substantial investments, it is important to realize that this money is not linked to you or attached to your identity in any way whatsoever. For this reason, it is constantly at risk of being hacked or stolen. In order to avoid this, keep your Bitcoin wallets (or whichever device your cryptocurrency happens to be on) safe and under your supervision whenever possible.

3. When should you start investing?

To be completely honest, as with any investment, there is never a perfect time to start. This is, of course, because no one can predict the future no matter how much material and knowledge you may have concerning patterns of the past.

What would be beneficial, however, is to take a look at convenient tools like Cryptowatch or Bitcoin Wisdom in order to analyze charts and have a better understanding of the ways in which Bitcoin has developed over time. Even though these patterns do not allow you to see into the future, they will help you make a more well-informed decision.

4. Is Bitcoin Mining worth my investment?

Bitcoin mining has rapidly grown since the position it held on day 1, and continues to do so as we speak. There are warehouses and data centers with millions of dollars worth of computers, as well as thousands of miners working tirelessly.

These expensive computers are made for the mining of Bitcoin, allowing for more profitable and efficient mining processes than the desktops people use at home. However, mining still takes plenty of time and is not easy. If you are new to Bitcoin and are looking to invest, it is advisable to invest in Bitcoin itself, but not in mining. There is no profit to be gained from an investment in Bitcoin mining at this point in time.

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