Since you are reading this – then I’m sure you are all too aware that there are many ways we can invest and make some great cash (AKA: dividends) from our investments. Standard stocks, long term savings options and different ways to make money from investing. But, there is a new investment option on the street and many more people are exploring the idea of investing in cryptocurrency.
However, like all investments there is a level of risk involved, but you may be wondering how you might like to invest in cryptocurrencies. I thought I would share some words on the subject.
What is Cryptocurrency?
In theory cryptocurrency is a digital currency created to make transactions more secure. It uses a blockchain ledger to ensure that it can remain a safe and secure way to go about your business with buying and selling the digital bits.
There are many cryptocurrencies, but the one that is most famous is bitcoin, which was created back in 2009. We have all read the many success stories with people making their fortune from cryptocurrency which is why it has attracted so many people. As the coin value increases, so does their monetary value. Unlike other currencies there is no physical commodity or large state backing the “currency”, it is purely coding and supply and demand. With values moving sporadically over the last few months, it is seen now as a more risky gamble.
Is it Easy to Buy and Mine it?
You may be wondering and assuming that buying cryptocurrencies is a complicated affair, and on the surface, it looks to be. However, you can easily purchase them directly through investor agencies, as well as online marketplaces where people are selling their own coins. You can use a mining rig to process the coins through the cycles, and it a simple step by step process. Once you have them, you can either choose to use them as an online currency, or allow them to sit there while you make the investment work hard for you.
What are the Risks?
There are, like most investment options, risks involved when it comes to making this sort of investment. The real issues is that the legal status of the digital currency option changes from country to country. So what you might be able to do with it in one country, may not be the same in another. You also have to consider the values and the increase and decline they can have. Some have described it as quite volatile, which could mean that there is a bigger level of risk, but on the flip side there may be a greater chance of a big reward.
Finally, the only other risk would be where you buy them and store them, using online marketplaces may get you a good deal, but like anything when you are buying something online, you don’t know who you are dealing with. So it may always be wiser to use established outlets.
At the moment, I am not invested in any cryptocurrency as I prefer to keep my investments producing cash in my dividend portfolio.