The year 2020 seems very promising with regard to cryptocurrencies. Since the creation of Bitcoin in 2009, this volatile asset has undergone very significant fluctuations to go from a price of $0.01 to $20,000 in ten years. This progress has inspired many investors to jump into the venture and buy cryptocurrency. If Bitcoin’s evolution makes people dream, it does remain the subject of market fluctuations, which can impact your overall finances for the better or cause serious losses. To carry out your cryptocurrency investment projects, here is our complete 2020 Bitcoin guide to help you make wise choices.
What are the different cryptocurrencies?
To this date, there exist over 1400 cryptocurrencies on the market. To buy cryptocurrency in a cost-effective way, it is particularly interesting to look into each asset’s stock market listing situation and to always research its history. Here is a list of the most interesting Cryptocurrencies on the market:
Naturally, we couldn’t go over crypto assets without presenting the founder of cryptocurrencies: Bitcoin. As the very first cryptocurrency, it inspired many altcoins to build upon the concept of Blockchain strings in a system of anonymous exchanges, thus allowing for more flexibility since transactions are carried out without intermediaries. Purchasing Bitcoin seems logical since the leader is a firm favourite among investors based on its reputation and on its current stock market listing.
Another asset widely acclaimed amongst traders, the Ether currency from the Ethereum platform. Contrary to what legend claims, it was not invented with the aim of competing with Bitcoin. As a great admirer of Bitcoin in the 2010s, Canadian-Russian crypto-enthusiast Vitalik Buterin developed a perfectible Bitcoin system to buy cryptocurrency with the integration of ‘smart contracts’ within the Blockchain which cannot ever be modified.
Dash coin (DASH)
Dash Coin, for Digital Coin, is a cryptocurrency through which it is possible to make instant money transfers completely anonymously. Unlike Bitcoin, which indeed holds on to user data within the Blockchain, Dash Coin erases every trace of its transactions. What’s new? Two features: PrivateSend, which ensures the protection of user data, and InstantSend which allows for Bitcoin funds to be transferred onto an account instantaneously and without having to wait for validation. Anonymity is guaranteed since the system carries out a fragmented transfer before bringing all the funds back together at the last moment.
For a company wishing to buy cryptocurrency, Ripple is without a doubt the best recommendation, since this Altcoin was developed expressly. It is indeed a real-time gross settlement system, which makes it both a foreign exchange market and a superfast money transfer network. Its greatest advantage? It is a convenient solution to exchange virtual currency, but also fiduciary currency. For those companies looking to buy cryptocurrency, Ripple provides a neutral tool which serves as an investment lever without the direct control of any banks or financial institutions.
Much like its bigger brother, Litecoin possesses all of Bitcoin’s advantages, but benefits from much faster speed performances when carrying out cryptocurrency transactions. Litecoin can generate as many as 84 million tokens while Bitcoin only offers a maximum of 21 million. Its incredible speed allows the system to complete transactions in average 2.5 minutes, while Bitcoin requires 10 minutes. It keeps the main advantages of the Bitcoin platform: transfer verification, transaction security, generation of new Litecoin tokens, etc.
Where to buy cryptocurrency?
Do you know the various virtual assets and wish to invest in cryptocurrency? We invite you to discover two main solutions through which you may acquire, store, spend or exchange your crypto cash safely.
Exchanges between individuals
While this specific type of transaction is still rare in France, it is possible for two individuals to exchange crypto assets amongst themselves. To that end, dedicated platforms allow individuals within a same location to exchange currencies. Security, speed and a lack of confidence remain sizeable obstacles which slow down exchanges of this nature.
The most common way to buy cryptocurrency is, of course, to sign up to a dedicated platform. Each platform presents its own advantages and drawbacks and is aimed towards beginner or professional traders and offers more or less optimised security features. The criteria you should take into account to select your next trading platform to buy cryptocurrency should therefore depend on:
- The number of crypto assets available.
- Whether you can buy cryptocurrency through debit or credit card, bank transfer or with cash via prepaid cash cards you can purchase from a corner shop, for instance.
- Transfer completion speed.
- Where the company is based geographically.
- Ease of use of the platform.
How to open a cryptocurrency wallet?
So, you have decided to buy cryptocurrency and are wondering how to open a dedicated wallet to store your first crypto asset (Bitcoin or other). Crypto wallets come in three different forms:
- Hardware wallet: a paper or electronic wallet without any Internet connection.
- Desktop wallet: Accessible online, this format is the most widespread since you don’t need anything more than a password and a personal account to access it. Be sure not to store too much cryptocurrency on it in case it gets hacked!
- Hot wallet: while a hot wallet is a great time saver, it is less secure than the other options. This type of wallet must remain a temporary solution.
To create your first wallet, the easiest solution is to create a ‘multi-asset’ wallet, which will allow you to group together most crypto currencies under one single software (for instance Ledger among hardware wallets or Exodus as a desktop wallet).
In which cryptocurrency to invest?
Deciding to buy cryptocurrency requires some deep thinking, as each decision will have an impact on whether your investment will represent a gain or a loss. Among the most widely acclaimed cryptocurrencies, we have already mentioned Bitcoin, Ethereum, Dash, Ripple, Litecoin or Tezos. Considering the latest events which affected the stock market, here are some of the most interesting crypto assets as of 2020:
- Stellar Lumens: based on the Ripple Labs protocol. In 2017, it registered a growth of 17,500%, which is over 5 times more than Bitcoin and its 2000% increase.
- Tezos: Tezos is a smart contract platform, much like ETH, NEO and EOS. It focuses on the notions of governance and self-regulations with a particular emphasis on security thanks to the use of highly specific programming languages.
- NEO: it is still not very well known, often considered the Chinese Ethereum. With China and South Korea sharing this market.
- MakerDao: this system allows those who invest in the token to win additional earnings in the form of interests generated with each new contracted credit.
Discerning good vs bad investments
If you are new to trading, it is important to be able to tell a good investment from a poor one thanks to a few simple techniques. For instance, have you ever heard of the Japanese Candlestick Chart? This method, thought up in the 17th century by Munehisa Homma, can be applied to the 21st century to assess the financial issues pertaining to cryptocurrency in the stock market.
Every fluctuation can indeed be strongly connected to a group’s emotions. For instance, you may learn that a crypto asset was hacked: its stock value is likely to go down, perhaps drastically so.
The conclusion is that the assessment of a cryptocurrency’s stock value may depend on the value intrinsically granted by a whole group of people. Cryptocurrency, as a volatile currency, does remain a relatively fluid investment with stock value fluctuations translating into gains or losses sometimes reaching as much as 30% in just a few hours. Learning about the history of each cryptocurrency before making an investment is therefore essential before jumping into the Blockchain venture.
Can one buy cryptocurrency using a credit or debit card?
Would you like to know how to buy cryptocurrency using a credit or debit card? Know that back when Bitcoin first launched, this wasn’t the most usual solution as bank transfers were the only system in use. Today, over 10 years have passed since Bitcoin was born, introducing a revolution in the world of virtual monetary exchanges. In a spirit of competitiveness, more and more platforms were created to offer a wider range of possibilities and facilitate transactions.
It is therefore perfectly possible to buy cryptocurrency using a credit or debit card, but only through certain specialised platforms such as Bitit, which also offers a large selection of altcoin purchases. Bitit’s main benefits are speed (instant payment through credit or debit card, SEPA transfers, prepaid cash cards, etc.), security and the possibility to complete international exchanges.
Can one buy cryptocurrency using cash?
Exchanging fiduciary money for crypto assets is also possible through several methods. Nowadays, platforms will allow you to buy cryptocurrency using:
- Prepaid cash cards, available from a variety of shops, these allow you to make online purchases safely: Cashlib, Neosurf, Paysafecard, etc.
- The LocalBitcoin platform constitutes a way to buy Bitcoin from a local seller.
- Postal or money order through your local Post Office.
Bitit offers you the possibility to purchase over 50 cryptocurrencies using cash thanks to prepaid cash card solution and supports Neosurf and Cashlib.
Cryptocurrency trading platforms
If you wish to buy cryptocurrency in order to try your hand at trading, many platforms specialise in this service. For instance, they require you to embrace CFD (Contract For Difference).
Stock markets have you bet on the fact that a cryptocurrency will gain or lose value. You then adopt a ‘long position’ when buying stock or a ‘short position’ when selling stock. When regular platforms allow you to buy cryptocurrency, you are merely positioning part of your CFD capital (the ‘blanket’). However, if you win or lose your position, gains and losses are real.
You now have everything you need to know to get started with purchasing, exchanging and trading cryptocurrency in 2020.