Concepts such as digital currencies, cryptocurrency, and blockchain have become major buzzwords in the financial world as of late and, even if you aren't from an economics background, people are starting to realize that things like Bitcoin and Ethereum can be major moneymakers. Investing and trading in digital currencies is quickly turning into the newest way to jump on the cryptocurrency bandwagon, and while it isn't too late to join the party, wrapping your head around exactly how to do that is one very daunting task.
Over the past few months, Coinbase has almost become synonymous with Bitcoin and other mainstream cryptocurrencies. The popular digital currency exchange makes headlines every time it adds a new type of coin (almost always causing an immediate spike in its value) or crashes when trading is at its most frenzied. But beyond Coinbase there’s a long list of alternative sites and services where you can buy, sell, and store your cryptocurrency. Whether you’re looking for a specific coin that Coinbase doesn’t support or you just want a more secure experience, here are a few other options worth checking out.
If you want to trade in digital currencies, you are going to need a platform on which to trade them, and an intermediary to communicate with the network. Most of us do not have the technological wherewithal to communicate with the blockchain or to store our digital currency. That’s where Coinbase comes in. Coinbase is a global digital asset exchange company (GDAX), providing a venue to buy and sell digital currencies, as well as send information about those transactions out to the blockchain network in order to verify those transactions. Coinbase serves as a wallet, too, where the digital currencies can be stored.
Besides what was already said, there are three major good reasons to invest in cryptocurrencies. First, because you want to hedge your net-worth against the fall of the Dollar imperium, which is assumed by many people to inevitably happen at some time. Second, because you support the social vision behind cryptocurrencies – that of a free and hard money for the whole world. Third, because you understand and like the technology. However, there are also very bad reasons to invest in cryptocurrencies. Many people fall victim to the hype surrounding every cryptocurrency-bubble.
The cryptocurrency market is insanely volatile in 2018. You can make a fortune in a moment and lose it in the next whether you trade Bitcoin, another coin, or the GBTC Bitcoin trust. Consider mitigating risks, hedging, and not “going long” with all your investable funds. If you trade only the top coins by market cap (that is coins like Bitcoin Ethereum), or GBTC, then the chances of losing everything overnight are slim (not impossible, but slim). Other cryptocurrencies are riskier (but can offer quick gains on a good day).