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Digital currency is gaining more and more popularity every year. Large online stores and countries use cryptocurrency as an alternative to regular money, such as 0.055 eth to usd.
And you can earn on it. Now we will analyze how to get it and the main pros and cons.
How to get cryptocurrency
Mining
Instead of buying cryptocurrency, you can “mine” it. True, this requires very powerful equipment, which will have to be spent. Therefore, the industry is very competitive; large companies own most of the market here.
You can start “mining” in several ways: buy equipment and do it yourself, or use cloud services and pay monthly for their use.
Due to the high costs, this strategy may not be profitable for many investors.
Cryptocurrency exchanges
On large sites, no problems are buying or selling cryptocurrency .19 eth to usd. There are many players on them, and therefore the demand is high. Please note that exchanges charge a commission, but not more than 1%, for the purchase and sale of currencies.
It is not necessary to keep all earned funds in the exchange account. There is a risk of it being hacked, after which everything will be stolen. It is better to store it in a special wallet.
Direct exchange
This is the same exchange, but now without an intermediary represented by a broker. You find a person ready to sell the currency and simply make a deal. It is better to use services with a secure transaction, which freezes funds until the buyer receives the currency.
Risks when investing in cryptocurrency
The main disadvantage of cryptocurrency is that it is not backed by anything other than investor demand. You can predict the price only by analyzing the movement of charts.
Each of the ways to acquire cryptocurrency has its drawbacks. Mining requires high equipment costs and extensive professional knowledge. When trading on the exchange, there is a chance of a hacker attack and the loss of all funds. Exchangers bite with commissions reaching 20%. A direct sale is dangerous by deception by scammers. For example, you can exchange ether here.
There is always a possibility of a ban on operations with cryptocurrency. Similar measures have already been taken in many large countries: China, Indonesia, and Vietnam.
Cryptocurrency Trading Tips
Increase your investment gradually. Cryptocurrency is a high-risk investment tool. Gain experience and invest more and more in this asset as you succeed. Read more about investing in cryptocurrencies at letsexchange.io.
Choose only liquid currencies. The mood of this market can change in a second, so it is very important to be able to sell securities in time.
Diversify your portfolio and minimize the risk of losing all investments.
Instead of output
Be careful when investing in such highly risky instruments. I advise you to allocate part of the capital for cryptocurrency and try. And let it be a small amount that is not afraid to lose. In such things, the main thing to remember is the rule: “The higher the potential return, the higher the potential risks of losing money.”
Reviewed and edited by Albert Fang.
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Article Title: Advantages and Disadvantages of Investing in ETH Cryptocurrency in Simple Words
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