Getting Into Crypto for the First Time: Why and How

Seasoned crypto investors might already have years of experience under their belt – and yet, it doesn’t necessarily mean it’s too late for newcomers to discover the arena. According to the extensive report published on crypto.com, the number of crypto owners around the world has grown by 178% in 2021 – and this year, it is expected to surpass 1 billion.

While getting into crypto can technically be quick and easy, doing a little research beforehand is always a smart idea. Not unlike in traditional stock trading, understanding how and why the market works, what attracts investors, and where one should tread cautiously can help prevent a ton of stress and unnecessary financial losses.

What Draws Investors to Crypto in 2022?

With 4 out of 5 people expressing distrust in banks, the idea of completely removing them from managing the money does have its charm. Not only do cryptocurrencies operate in a decentralized manner, but they’re also immune to continuous inflation that’s inseparable from traditional banking. Technology fanatics also focus on the extra layer of security decentralized processing and record keeping can help ensure.

Moreover, the financial systems of the past have not always been equally accommodating to all communities. The newest studies show that the diversity of crypto investors is far higher than the one witnessed in stock markets, which correlates with the fact that crypto is available on a nearly global scale. Because of this, millions of people see it as the future of finance – and only time will tell whether they bet on the right horse.

A certain percentage of crypto investors don’t share the same optimism; however, they invest in cryptocurrencies using the same approach their grandparents bought paintings – seeing coins as an asset that can potentially grow in value as time passes. 

First Steps Into the Crypto Market

There are generally three options for someone determined to explore the crypto market from scratch: they can either mine coins themselves, buy them using fiat money, or earn it by using one of the innovative online projects that pay their users in crypto for various actions.

Mining your own crypto may have been all the hype a decade ago – however, by 2022, barely anyone’s actively doing it still. There are multiple reasons for that: not only have commercial miners grown exponentially in numbers and claimed the lion’s share of the industry, but the prices of hardware and electricity have shot up to tremendous heights. Sadly, these days, it’s more of a hobby than a real earning possibility for most.

While the second option is definitely quicker and easier, it also poses a certain risk. It’s not uncommon for an inexperienced investor to make bad decisions and experience losses; however, they hit a lot more painful when it comes to losing your real-life savings. Registering on an exchange, picking crypto, and buying it might take seconds and sound like fun and games, but without having any first-hand experience with the market, the investments can easily vanish into thin air – and unlike in traditional banking, there can be no expectations for insurance.

Earning crypto on various platforms may not sound too exciting for those who are looking to make a fortune overnight – and yet, it’s a lot safer since there are no personal savings at risk. According to financial experts, this is an excellent option for those who are curious to discover the crypto market but get spooked by the high risks that come with it. After all, as the popular saying goes, you should only invest what you’re willing to lose.

Financial incentives have been used in various websites and apps for years: users could receive rewards for completing actions like watching a video, completing a survey, etc. Adhering to the popular demand, more and more of them are starting to offer crypto as a payout option. Coin Hunt World, for example, allows its users to earn small amounts of crypto by playing a mobile game; unfortunately, it’s only available in six countries in total.

Another simple example of a passive earning app could be Honeygain: initially introduced in 2019, it allows its users worldwide to make money by sharing their excess internet bandwidth and choosing whether they prefer to collect their earnings in PayPal or crypto. This way, one can head to an online exchange and trade tokens using their crypto earnings.

Crypto as an Income Stream

Once you become a crypto investor, there are two main ways to make money: you can either benefit from the growing values of their assets or take part in staking.

Based on their strategy, the majority of the traders can be easily grouped into three segments:

• Full-time traders who dedicate a ton of their time and energy to technical analysis of the crypto market charts and patterns. It’s definitely not a newbie-friendly option since it requires a ton of industry know-how and analytical skills.
• HODLers put their money into the biggest and the best-known coins (typically Bitcoin and/or Ether) and keep them as long-term investments. In a lot of cases, these are already established investors looking to diversify their portfolios without putting in too much active work on a daily basis.
• Explorers who enjoy discovering new coins and investing in little-known ICOs. Typically spending small sums, they are willing to bet on the hope one of these small projects will become the new Tesla, making them a fortune.

The concept of staking is not unlike that of collecting interest from your regular savings account: an investor agrees to lock up a certain amount of tokens they possess for a predetermined period of time and is rewarded in extra tokens when the said time passes. Still, it’s important to remember that since the reward is issued in the same cryptocurrency, the volatility of its price affects the investor just the same as it would a trader.

While investing in cryptocurrencies is definitely a great way to diversify your income streams, it should always be taken with a grain of salt: where there is a potential for high reward, there is normally also a possibility of great losses. Make sure you do your homework before you start trading – and with over 19 thousand cryptocurrencies currently available worldwide, there’s certainly a lot to explore.

(Disclaimer: Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)