Is it worth investing in cryptocurrency: all information for investors. Is it worth investing in cryptocurrency: all the information for investors What is the best way to invest in cryptocurrency

Recently, we have experienced a huge boom in the cryptocurrency market.

More recently, only those who constantly work with technology were familiar with digital assets.

Already today, one of the most popular queries in search engines is the question of which coin is best to invest in in 2018.

Just a couple of years ago, there were only a few dozen cryptocurrencies on the network; the choice was between three main ones, but now people simply cannot understand all this variety of assets.

It's about not getting confused and knowing exactly which investment will be profitable and which will lead to loss of funds.

The market has changed significantly within 2-3 years. Instead of amateurs, big investors are flooding it with huge investments. Along with this, the number of cryptocurrencies has also increased. Instead of several dozen, their number exceeded 1200.

On the one side, such diversity helps to diversify the investment portfolio, which is an important step for successfully making money on such shaky funds.

On the other side, this seriously confuses the user in choosing one or another coin for investment.

So which coins are best to invest in in 2018?

This is the main question for a beginner who decides to invest in cryptocurrencies.

Everyone knows such veterans as Bitcoin, Litecoin, Ripple, Ethereum and relatively new players such as Dash, Neo, Zicash and others.

Here is a list of the highest-performing crypto-assets by various characteristics. This list is in no particular order.

Bitcoin

First introduced to the community back in 2009, it is the first implementation of a cryptocurrency network.

Satoshi Nakamoto, an anonymous developer or group of people, sent the Bitcoin white paper to famous cryptographers and programmers in 2008.

This is how this giant appeared, which still causes a lot of controversy among users.

The document, titled “Bitcoin: An Electronic P2P Payment System,” lays out all the details about the cryptocurrency and its plans. In January 2009, Satoshi mined the first block, often called Genesis, for a reward of 50 coins. Genesis mining has activated the Bitcoin network.

Unlike traditional currencies, which rely on government and corporate bodies, Bitcoin is designed to be completely different.

And Bitcoin can be seen as a direct implementation of this protocol. Instead of a private distributed ledger stored in a centralized system, Bitcoin's ledger is public.

The public ledger is called blockchain. Bitcoin is created by verifying transactions on the network - using a proof-of-work algorithm and a process called mining.

Miners verify transactions by solving a computational problem and adding a block.

There can only be 21 million Bitcoins in existence, of which 1 million are assigned to anonymous developers. The Bitcoin Foundation is currently developing and maintaining the network.

What makes Bitcoin an interesting investment in 2018?

What makes Bitcoin a good option for investors is its immense popularity.

Since its inception, cryptocurrency has always been a favorite among hobbyists. But recent price spikes have increased interest among large investors.

Of the 21 million Bitcoins that will exist, 16 million are already in circulation. Bitcoin currently has a market capitalization of $115 billion with a value of $6,807 per coin. At some point, the price grew at an incredible speed, knocking down all record levels and shocking even the most experienced users. Bitcoin not only became the first cryptocurrency to exist, but also the first to set such large-scale records. However, more recently, the value of the coin began to fall seriously.

The system currently generates 12.5 + 0.123 bitcoins per block. This reward is expected to be reduced to 6.25 bitcoins per block after 2020. The platform halves the block reward every 4 years to control supply.

Problems with Bitcoin

Some experts believe that Bitcoin, a cryptocurrency that was created back in 2009, is based on outdated technologies.

Due to this, it is much slower than other altcoins.

This is why the Bitcoin Foundation is introducing an algorithm, better known as segwit, to solve some problems.

One of the most fundamental problems of Bitcoin is the energy consumption of its mining.

Many people are concerned that this cryptocurrency requires a lot of energy. That's somewhere around 23 terawatt-hours, which could power the entire country of Ecuador.

Litecoin

Charlie Lee, a former Google employee, created Litecoin in 2011. – one of the first cryptocurrencies released after Bitcoin - .

Although it is still ranked alongside Bitcoin everywhere, they have some fundamental differences. Litecoin is also an open source P2P cryptocurrency project, and is licensed under the X11 license.

Main differences between Litecoin and Bitcoin– higher speed of Litecoin block generation (2.5 minutes), and the use of different hashing algorithms. Instead of the SHA256 algorithm, Litecoin uses scrypt.

In addition, Litecoin also has a maximum supply of 84 million coins, which is 4 times higher than that of Bitcoin. The rate of token generation per block is similarly halved every 4 years.

The Litecoin development team was very quick to resolve scalability issues.

Litecoin was one of the first cryptocurrencies to adopt the Segwit protocol.

It also supports the lightning network, which allows transactions to be processed approximately four times faster than Bitcoin.

What makes Litecoin a good investment?

Litecoin currently has a market cap of $6 billion and is valued at $118, which is significantly lower than Bitcoin.

This relatively cheap price opens the door to investment for both small and large investors. Litecoin has consistently shown good progress over the years and has never disappointed the cryptocurrency community.

Problems with Litecoin

The Litecoin Foundation is very active in improving the functioning of the platform. So Litecoin has no major setbacks. But since cryptocurrency also uses the PoW algorithm, it wastes a lot of resources.

Ethereum

Many experts believe that Ethereum does not have any major problems as the development team always updates it according to new industry standards. But, as always, frequent errors and inaccuracies in the system may be the cause.

Ethereum Classic

It is currently worth approximately $14 per token with a market capitalization of $1.3 billion.

Ethereum classic is a very promising project, and so far it has shown excellent results.

Ripple

is a common open-source Internet protocol that supports real-time settlements, fast money transfers, and currency exchange.

The developers created Ripple based on P2P.

Cryptocurrency is fundamentally different from other coins.

The Ripple network supports many different currencies and even digital tokens. Ripple is almost hundreds of times faster than Bitcoin and many other cryptocurrencies. It can process transactions using its advanced consensus system within 4 seconds, whereas Bitcoin takes at least an hour.

According to the Ripple Foundation, they did not launch the project to compete with others.

Instead, they are developing a new generation transaction system to counter the traditional one, which is very slow.

Why should you invest in Ripple in 2018?

The project is supported by several large banks and corporate organizations such as Santander, UniCredit, UBS, Axis Bank and others.

Many people don't pay enough attention to Ripple because the XRP currency costs pennies.

But what they don't understand is that Ripple doesn't work like most other currencies. All coins have already been released. That's why it's valued at $0.49 even though it has a capitalization of 19 billion.

XRP is also the third most popular and most traded crypto asset. Faster transactions and an extremely scalable platform help RippleNet grow continuously.

Problems with Ripple

Many experts assure that Ripple has no disadvantages. However, the distribution of Ripple tokens has been centralized and most of the coins are held by the developers and other large companies that support it.

Dash

is an open-source cryptocurrency that has been in operation since early 2014.

It was first called XCoin, but was renamed DarkCoin in 2015.

Finally, the coin was soon rebranded as Dash, a wallet for digital money.

Dash is an easy-to-use cryptocurrency network that is self-funded and self-managed. In fact, it is the first decentralized autonomous organization to be Sybil-tested.

Unlike Bitcoin, which has a single-tier network, Dash operates on two layers.

The first level consists of miners who mine new coins.

While the second level consists of Masternodes that perform various tasks. These tasks include managing the platform and performing important functions such as InstaSend and PrivateSend.

Should you invest in Dash in 2018?

This is a promising investment. Dash is a promising cryptocurrency project that has an amazing business structure.

It's also very safe. Operations are fast and the platform provides unique scalability features.

As of this writing, dash has a market capitalization of $2.4 billion and a unit price of $304. According to Coinmarketcap, Dash has a 24-hour trading volume of around $90 million, which is proof of its ever-growing popularity.

ZCASH

Very similar to Bitcoin, but with an added layer of security and anonymity.

Zcash also allows users to selectively disclose transaction and account balance information. This function allows tax authorities to conduct audits.

Why should you invest in Zicash?

Zcash price is $196 and market capitalization is $754 million.

NEM

Completely developed using Java, it is a P2P cryptocurrency with revolutionary features.

Instead of the universal proof of work algorithm that most other cryptocurrencies use, NEM uses proof of importance.

NEM also supports various new features such as multi-valued accounts, the EigenTrust++ reputation system, and encrypted messages.

NEM runs on a commercial blockchain called MIJIN. MIJIN is currently being stress tested by financial institutions in Japan and around the world. Japan has become one of the first countries in cryptocurrency trading. So, NEM has a bright future.

Should I invest in NEM?

NEM currently has a market capitalization of $2 billion and ranks 15th.

The XEM token has a relatively low price – only $0.2. This makes the coin a good choice for people who want to invest small amounts.

Monero

Launched in 2014, it has become one of the most popular crypto assets.

It is built on the CryptoNote protocol and is mainly focused on providing a decentralized and scalable privacy-focused cryptocurrency.

Why is investing in Monero profitable?

Monero currently has a market capitalization of $2.8 billion.

This figure is constantly growing. Currently, XMR, Monero's native token, is priced at $179, making it ideal for newbie investors.

Problems with Monero

Privacy oriented. A lot of information is encrypted; it can be hidden even from the system itself.

In 2016, Monero experienced rapid growth in market capitalization when it was included in AlphaBay.

Alfabey is a wide online marketplace specializing in the sale of illegal and contraband goods.

It was tracked and closed by law enforcement in July 2017.

Monero is also relatively easy to mine. It can be mined using consumer grade CPUs and GPUs.

Monero developers are against ASICs, so they have completely blocked access to these miners.

In October 2017, XMR made headlines as news of illegal activities surfaced. A site called Coinhive developed javascript code that allowed websites and even viruses to mine XMR from the victim's computer without any consent.

Some sites that have implemented this javascript have been honest enough to add a disclaimer.

While other sites such as The Pirate Bay have faced huge backlash for not notifying users.

NEO

Often referred to as the “Chinese Ethereum,” NEO is an open-source P2P cryptocurrency that is somewhat similar to Ethereum.

But this does not mean that NEO is a complete clone of Ethereum.

Included Ethereum features such as decentralized applications and smart contracts, but the development team also improved them significantly.

In contrast, where smart contracts can only be generated using specialized programming languages.

In NEO, contracts can be generated using popular languages ​​such as C, C++, Java and others.

The NEO development team's only plan is to create a smart economy. And, they say, this can be achieved by combining digital assets and digital identities. NEO is quite interesting and can be seen as a serious competitor to Ethereum.

Investing in NEO

NEO is currently ranked 9th on Coinmarketcap with a market capitalization of $3.2 billion.

It currently costs about $48 per unit.

NEO Problems

NEO has a lot of potential and the development team is completely focused on its goal.

But the only problem is that the development team lacks effective marketing.

Unlike other cryptocurrencies, which can be purchased without much difficulty, purchasing NEO can be a serious hassle.

Currently, the only way to buy NEO is through exchanges such as , Binance and others.

Conclusion

So, the main goal of the investor was and remains to earn money. It doesn’t matter at all whether the user is a beginner or a pro, everyone makes mistakes.

In order to minimize risks, you need to understand which investment will bring profit and which will lead to disappointment.

This was the purpose of this article. Here are the top 10 cryptocurrencies worth investing in in 2018.

We hope that now users will have less doubt and fear about this. This top will help you make an informed decision.

Investing in cryptocurrency is more popular today than ever. With a competent and careful approach, the method of earning money has great prospects. The current situation with the cryptocurrency market worries investors, but experts are encouraging with good forecasts for 2019. Beginner crypto investors want to know where to invest and which coins are most promising.

Before investing in cryptocurrencies, beginners want to know how profitable it is and whether it is profitable at all. The answer is simple: if it does not generate income, there would be no hype around digital coins. For investments in cryptocurrencies to be profitable, you need to have information and be able to analyze market trends.

Nuances that every investor should understand:

• Cryptocurrencies are the brainchild of modern technology. The coins reflect a small part of the blockchain mechanism. Tokens are an adjacent product of the platform, and not pieces of paper that rustle in your hands. Before investing in cryptocurrency, it is important to evaluate the prospects and original ideas of the entire platform. For example, smart contracts have made an incredible breakthrough in the world of technology, it is clear that projects will develop. Ethereum cryptocurrency is a promising project that will bring profit.
• Bet on price growth. When entering the market, startup companies sell tokens for a meager price. As the platform develops, the price of coins also rises. Sometimes the rate takes off sharply, and sometimes you have to practice a wait-and-see strategy. It all depends on interest in the platform, a successful PR move, and how hard the team works on the project. It is not advisable to buy the first tokens you come across at a low price: first you need to get to know the company, the product they offer, evaluate its future prospects, and only then invest. The price of startups is meager, and you can get good profits.

• Decentralization. The anonymity of digital money is legendary. Some states are desperately fighting virtual currency, calling it a breeding ground for corruption and fraud. It is almost impossible to track crypto holders. Transactions are recorded in a block, but users do not leave personal data. No one can track the sender or recipient of the cryptocurrency. Owners of even large virtual sums do not pay taxes, which opens up broad horizons for investors.
• Market expansion. New projects appear almost every day, require money for development and are looking for investors. Over the 10 years of the existence of blockchain technology, thousands of types of coins have appeared, and this is not the limit. If the user does not find a suitable project for investment, it is worth waiting. Perhaps the idea will appear in the near future.

The main thing is to adequately assess the possibilities. There are always risks in investing, but if you develop a competent strategy and strictly adhere to it, you can reduce the risks and increase profits.

Types of investment

Before investing money in cryptocurrencies, it is worth familiarizing yourself with the types of investment, which will allow you to navigate the initial contribution:

• Invest in cryptocurrency as a project. The main profit from digital coins goes to the creators. The Bitcoin code is open to everyone, and thousands of new projects have been created based on BTC. Anyone with the knowledge and capabilities can engage in their own development. It is unlikely that anything will work out alone; you need a strong team. If you simplify the problem, you can simply invest in a promising ICO project.

• . The only thing better than buying coins is mining them. Many cryptocurrencies are mined using a simple computer. The method will not bring much income. You need good equipment that, if used correctly, will pay for itself in 3–4 months. Popular coins have tightened mining conditions. Now to get them you need farms, which cost a lot of money.
• It differs from classic crypto mining in that it does not require the purchase of capacity: the equipment is provided by remote services. Users pay rent, and the server mines coins. The price depends on the type of cryptocurrency. The most expensive rental on.

• Long-term investing in cryptocurrency. It involves the purchase of coins at the ICO stage and their further sale after the rate rises. Some investors hold digital coins in their accounts for years, and then receive profits that are thousands of times higher than the initial investment. A careful approach is needed: even the best analysts cannot predict the market trend several months in advance with 100% certainty. For example, in mid-June 2017 it was about three thousand dollars, and at the end of the year it reached $20 thousand. One can only imagine the profit received by investors who invested in BTC on time.

Long-term investment is the easiest and safest way to make a profit. An investor buys coins and waits for the rate to increase. The method is considered safe because the funds are in the holder’s account and cannot be lost. If desired, investors can trade coins on .

Main stages and rules for novice investors:

1. Selecting a tool. Beginners should choose popular types of coins that are more stable and profitable. Previously, everyone was buying Bitcoins, but now competitors are hot on the heels of BTC: Ethereum, Ripple, Monero.
2. Buying cryptocurrency. After choosing a coin, we buy tokens on an exchange or in an exchanger. You need to have an electronic or other device (it all depends on the type of crypt). Before creating a wallet, it is important to make sure which coins are supported by the software. There are little-known but promising tokens that not all applications work with.
3. Waiting for a raise and selling it. If the market turns in the opposite direction from what you expected, you do not need to immediately get rid of your coins, especially if selling them will cause losses. The cryptocurrency market is so unstable that everything changes in a minute.

Sometimes investors don’t want to bother creating a wallet, so they store funds on exchanges, which is not necessary. The resource can be hacked at any moment: the money will not be returned to investors.

The long-term strategy is to wait, but not everyone is ready to wait for months or years, but after 6-12 months you can get 1000% profit.

Best cryptocurrencies to invest in

While many only dream of being on the wave of success, active people are actively earning money - it's time to start. You need to find out which cryptocurrency to invest in. Options, starting from the first lines by capitalization:

Bitcoin

If there is any currency that is profitable to buy now, it is Bitcoin. Pioneer of the era of digital coins. It is not surprising that BTC ranks first in terms of capitalization. Bitcoin is the most expensive cryptocurrency, which other tokens have not been able to overtake in 10 years. Now there is a local decline in the cryptocurrency market, the price of BTC has rolled back significantly, but this does not prevent Bitcoin from continuing to maintain its leading position.

Ethereum

Investors who are deciding which cryptocurrency is best to buy should take a closer look at Ether, which ranks second in terms of capitalization. The blockchain database is open for ICO projects. The peculiarity of the platform is that the site offers smart contacts, which have become a breakthrough of the 21st century. Some investors believe that investing in Ethereum is safer than investing in Bitcoin due to the high ambitions of the project.

The Ethereum cryptocurrency is part of a platform with enormous prospects. Global companies cooperate with blockchain: JPMorgan, Microsoft, Sberbank. - developer of Ethereum, was honored to attend a reception with the President of the Russian Federation, which only confirms the prospects of the platform. If an investor has not yet decided which cryptocurrency is profitable to buy, Ether is the best option.

Litecoin

A Bitcoin fork with big ambitions. Litecoin appeared in 2011. It’s difficult to call LTC the best cryptocurrency for investing, but the coin has its own “adherents.” The blockchain is based on the Scrypt algorithm. Litecoin has significantly more coins than its predecessor, and blocks are generated faster. All exchangers and exchanges work with LTC.

NEO

If the user has not decided which cryptocurrency is worth buying for further earnings, there is an opportunity to decide right now. It was not recognized immediately, but the ambitious project could not remain aside. Chinese developers are constantly improving the platform, recently updated technical documentation, changed the stock ticker, and upgraded the blockchain, which has a positive effect on the reputation of the network. The NEO cryptocurrency cannot be called stable. The coin rises and falls in the ranking by capitalization. Today it ranks tenth.

The modernization of the project is bearing fruit. Large companies cooperate with NEO: Agrello, Bancor, CoinDash. In the future, the developers plan to introduce many features into the project that will increase the popularity of the network and the value of the NEO cryptocurrency.

Websites and exchanges where you can invest cryptocurrency at interest

A popular and reliable option for investing cryptocurrency at interest is Bitcoin lending on the exchange and Bitfinex. For a year it turns out to be about 7%, at 0.02% per day. The scheme is P2P lending (on a peer-to-peer basis). The investor gives funds to margin traders. These people make additional profits by using large volumes of cryptocurrencies.

All funds on the balance sheet and accumulated funds act as a guarantee of activity. This type of deposit in cryptocurrency with interest is very interesting, if only due to the variety in the earning process. The exchange acts as a guarantor, so funds will not be lost in any case. Investing cryptocurrency at interest is only available with Bitcoin. The user has the right to choose the terms of the deposit and the interest rate independently.

A similar toolkit is offered by the YoBit exchange, where it is called InvestBox. Gives the user a chance to earn from 0.1% to 10% daily. The creators of the exchange claim that the level of risks in the system is reduced to zero. Interest is accrued from a special fund, which is replenished from a share of exchange commissions, internal instruments and contributions from the developers of new currencies.

There are dozens of altcoins available for investment, and the list changes regularly. For a specific coin, there is a specific minimum for investment (which mostly depends on the exchange rate).

Investing Bitcoin at interest can sometimes be quite profitable - the profit per year reaches from 10% to 200%.

Cloud mining is considered a separate type of investment. If you find a reliable service and buy a contract for certain capacities, you can make a profit every day.

How to invest money in tokens correctly

To understand how to properly invest in cryptocurrency, you need to understand the features of the process. To minimize risks and increase income, we adhere to the following rules:

1. Choose a reliable cryptocurrency. With thousands of options, it’s not easy to choose the best one. A list of rating coins will be provided as a hint.
2. Assess profitability and risks. You need to pay attention to the prospects and trend of the exchange rate. If a cryptocurrency crashes in the next few months, investing is risky. It is more advisable to buy a “gray” inexpensive coin that is steadily growing in price.
3. Analyze the potential. The longer a cryptocurrency is on the market, the lower the risk of failure. Only the coins that appear are cheap, but they do not provide a guarantee.
4. Assess the possibilities. Depends on how much money the investor is willing to invest. This is the main point, because everything starts with money. If you don’t have the funds to buy Bitcoin, choose the “reliable one available.”

The volatility of the cryptocurrency market increases investors' risks. Users have seen how speculators can dictate the rules. The current market situation clearly demonstrates this. If you approach investing competently, profit is guaranteed.

The main unpleasant points associated with investing in digital coins:

1. High volatility. The main point that can bring both profit and loss. Even analysts' forecasts do not give a 100% guarantee that the exchange rate will go in the right direction.
2. Fraud. The growing popularity of cryptocurrencies contributes to the emergence of scammers who want to make money on volatility. Traders should be wary of sites that offer quick and exorbitant profits. You need to choose proven resources.
3. Risks associated with cybersecurity. Hackers break into exchanges from time to time. Recently there was a case with the Hong Kong exchange Bitfinex: 120 thousand BTC were stolen. The Bitcoin rate fell by 23%.
4. Legal vulnerability of users. Digital assets do not provide consumer protection. It is not possible to cancel the payment. The irreversibility of transactions does not stop investing in cryptocurrency.

Investing in digital assets is an interesting solution for making a profit, but with certain risks. Each investor must clearly define a plan of action in the event of any developments.

In contact with

For some, investing in cryptocurrency is something out of science fiction, for others it is a profitable source of income.

While some people are thinking about where to invest their money, others are actively investing and winning big.

How to make money on cryptocurrency?

We will talk about the most effective methods in this article.

In addition, you will learn how risky such investments are, what results can be expected from them, and which currency is more profitable to invest in.

Investing in Cryptocurrency: Benefits

When it comes to the best investment vehicles, cryptocurrencies are always mentioned. Why are they attractive?

1. Modern technologies. The creation of digital money is based on unique technologies. You can use cryptocurrency in almost any country (with a few exceptions). Therefore, you can earn money in a convenient place and at any time.
2. Rising cost. Bitcoin and other popular cryptocurrencies are rising in price. It happens that the cost drops sharply, but after a while it increases significantly. This can be seen by looking at the ups and downs of Bitcoin over the years of its existence. If you approach investing correctly, you can easily earn income by playing only on the difference in the exchange rate. Or for the long term, buy Bitcoin now and wait a couple of years.
3. Extension. New cryptocurrencies appear regularly, which can become an object of investment. Forecasting the growth in value makes it possible to improve your financial situation with minimal effort.

Where to invest?

The success of investing in cryptocurrency depends on the right choice of digital money. Here it is important to use a profitable cryptocurrency that will not lead you to losses. When choosing, consider the following factors:

1. Popularity. Find out how widespread cryptocurrency is among users. Great interest, availability on exchanges, rising costs - all this indicates the popularity of digital money.
2. Mobility. Choose a currency that you can easily move around.
3. Safety. A good cryptocurrency should be protected from scammers.

Many modern cryptocurrencies have these characteristics. The most common investment option is, of course, Bitcoin.

This is the most valuable cryptocurrency for investors. It has been around for 10 years and has already become a definite standard for alternative money transfers, surpassing all other cryptocurrencies.

Bitcoins are secure, mobile and popular. In recent years, their value has increased significantly, as can be seen in the graph.

How to invest in Bitcoin?

• Purchase. The easiest way to invest in BTC is to buy it on an exchange. We use CEX.IO - this is one of the few exchanges where you can quickly buy cryptocurrency using a bank card. For the first purchase, the most simplified interface is suitable:

Cryptocurrency exchange on CEX.IO

Cloud mining. You've probably heard that mining cryptocurrency at home is unprofitable and only huge industrial farms can mine it. But no problem! The remote mining service IQ Mining offers you to earn Bitcoin by mining other highly profitable coins. The so-called “smart” mining automatically switches between the most profitable coins, which are subsequently converted into Bitcoin at the most favorable rate. This mining method is by far the most profitable.

Trading. Speculative trading on the stock exchange requires certain knowledge and skills. Our guide will help you understand the basics of this matter. Binance is by far the best exchange for trading. It has everything: many cryptocurrency pairs, huge trading volume, low commissions and high limits. Here you can also invest in other cryptocurrencies if you wish.

Let's take a closer look at the pros and cons of investing using Bitcoin as an example:

Where to start investing?

Select one or more cryptocurrencies that you will work with. The payback period and the amount of income depend on this.

Allocate funds for investments. You need an amount for initial investment and further support of investment activities.

Buy cryptocurrency. Wait for the right time to purchase digital money at the minimum rate. Buy currencies on declines.

Transfer the purchased currency to an offline wallet, such as the Ledger Nano S. This will ensure protection against theft. You should not leave money in an exchange account if you do not plan to sell or change it in the coming days. Also, you should not store large amounts of money in mobile and online wallets.

Possible risks

Before you invest in Bitcoin or other cryptocurrencies, you need to understand the risks involved. Some users consider cryptocurrency to be the next “MMM” or so-called “bubble”. Despite constant talk about it, cryptocurrency continues to exist and actively develop for many years.

Such money is not backed by anything other than a limited issue and the faith of the community. But until the government passes regulatory laws, investing in cryptocurrency is a profitable business.

There is a risk of losing your investment due to a sharp decline in the value of cryptocurrency. Here, much depends on the investor’s foresight and his ability not to panic.

Many countries have not adopted rules governing the circulation of cryptocurrency. You will not be able to pay taxes on your income. In addition, there are countries where digital money is prohibited.

Despite some risks, many advanced users are interested in investing in cryptocurrency. This is a great chance to make good money. Use it while you can.

Within the community of crypto investors and miners, there is an acute question about what is the best cryptocurrency to invest in 2019. It is important to solve this problem because the profitability of crypto mining and the feasibility of investing in cryptocurrency projects depend on it. For this reason, you need to take a closer look at what investments in cryptocurrency will be profitable in 2019.

Before you start choosing a cryptocurrency, you need to familiarize yourself with promising digital coins; this is the only way to choose the best one, in terms of earnings, in the medium term.

List of crypto coins for investment

Among digital currencies, there are 10 young coins that are suitable for investment and subsequent earnings due to the growth of the exchange rate.

The TOP 10 cryptocurrencies include the following projects.

The EOS crypto platform is a competitor to coins such as Ethereum. The creators of this currency promise users to solve scalability problems, as well as provide reliable software tools that allow them to create and run various applications.

Hello, dear readers. The topic of today's article: investing in cryptocurrency.

Do you have available funds? Quite a bit - at least 10-20 thousand rubles? You've probably thought about going somewhere more than once, but every time you chose not to do it.

This is understandable: banks give too low a percentage, playing in the stock markets requires knowledge and instinct, the rest may turn out to be ordinary “scammers”.

What to do if you have very little savings, but want to have a good return?

There is a great way to invest a very small amount, but get significant income after just a few months. This method is investing in cryptocurrency. Today I want to talk about what it is, as well as what cryptocurrency to invest in in 2017.

What is cryptocurrency?

Let's start with simple things, namely, let's find out once again what cryptocurrency is for an investor.

Cryptocurrency is a digital asset (something like money, only expressed not in paper or gold, but in the form of a code), the accounting of which is completely decentralized. This means that there is no “center” that would mass issue Bitcoins or other cryptocurrencies. Because of this, no states or courts can control their circulation.

Let's take a closer look at how this works using Bitcoin as an example in this video:

Why is he so popular?

Of course, this approach could not but affect the popularity (and, as a result, the exchange rate) of Bitcoin.

As soon as people began to understand what it was, the rate of its very first type (bitcoin) began to rise sharply. Even today, almost 10 years after the appearance of the most popular cryptocurrency, investing in Bitcoin is very profitable - its rate increased by more than 300% in 2016.

Are there any other reasons?

The popularity of Bitcoin led to the emergence of other cryptocurrencies.

Some time later, after the appearance of Bitcoin, other similar systems began to appear. Nowadays, people who want to invest in non-traditional assets have a large choice in this market, because now on exchanges you can find a good dozen strong and fast-growing competitors to Bitcoin.

Especially among altcoins (as all cryptocurrencies other than Bitcoin are called today), I would like to highlight DASH and ETH. In 2016, the rates of this “digital money” increased 12 and 8 times, respectively. The difference compared even to Bitcoin is huge: probably no asset in the world brought the same profit last year as altcoins.

Is it really that simple?

However, I would not rejoice at the opportunity to get rich quickly - there are plenty of pitfalls here, as in other areas of investment.

Investing in a cryptocurrency, especially an alternative one, is always dangerous: if ordinary assets always have some prospects for a protracted decline or long-term growth, then for bitcoins and other “digital money” they practically do not exist.

Raising or lowering the rate in just a few hours is within the power of a large group of speculators who will act in a coordinated manner.

Over the almost 10-year history of the existence of bitcoins, there have been several cases when the rate fell very sharply and for almost no reason. Thus, on January 1-2, 2017, the Bitcoin rate was $1,153, and on January 5 it dropped to $850.

Altcoins are a good alternative to Bitcoin: their profitability is even higher than that of the most popular cryptocurrency, and the risks are not much greater. However, this will not always continue: for other “digital currency” market analysts predict a transition to stagnation in 2-3 years.

Advantages and risks of bitcoins

To decide whether to invest your own money in cryptocurrency or not, you need to understand what financial benefits it will bring and what risks you will have to face. Here I will try to describe everything in as much detail as possible, but you will need to make a decision about investing in Bitcoin yourself.

Pros of investing in Bitcoin

1. Quite stable growth. Throughout the history of Bitcoin, there have, of course, been big drops, but this happened infrequently: on average, once every 2-3 years. The four-fold increase in 2016 significantly outweighs the decline: a successful investor can, having invested in the most popular cryptocurrency, not experience a drop in its value over the course of a year.
2. User trust. Bitcoin managed to become popular: even while declining, it subsequently grew sharply. Today, a huge number of Bitcoin users act as a kind of “guarantor” of its stability: several million literate people cannot trust an unreliable asset, right?
3. High liquidity. Selling Bitcoin today is not a problem: Bitcoin ATMs are opening all over the world, the number of Bitcoin exchanges is increasing every year, even some retail outlets accept the most popular cryptocurrency.
4. Independence from external events. Probably only failures in computer systems can have a negative impact on Bitcoin. Political, economic, social “squabbles” - Bitcoin doesn’t care about all this: it is completely decentralized, and events in any country or region, in fact, do not affect it in any way.
5. Low control. Bitcoin today is one of two means of payment (the second is cash), the circulation of which is almost impossible to control. This is very convenient: supervisory authorities do not know how much money you have, where you keep it and what you spend it on.
6. Low commissions. Maybe not the most important advantage of Bitcoin, but I decided to talk about it. Today, although commissions are charged for storage, exchange and other operations with the most popular cryptocurrency, they are small, which distinguishes them favorably from money stored in banks. As financial institutions charge more and more for their services, this advantage of Bitcoin will come to the fore.

Risks and Disadvantages

1. Scaling problem. The Bitcoin network grows over time as the number of Bitcoins increases. However, the throughput of the cryptocurrency network does not change, which is why problems with transfers are already arising today.
   The most important negative consequence is the increase in the time it takes to transfer bitcoins from the sender to the recipient. Often they simply get stuck in the network. In addition, limited bandwidth made small-scale bitcoin transactions unprofitable.
   The problem is being addressed by both Segregated Witness and Bitcoin Unlimited today, but they have still not been able to completely eliminate it. This means that if the protocol remains old, the system will pass through less and less bitcoins, which will lead to a decrease in the attractiveness of bitcoin for investors.
   Those bitcoin owners who suffer the most from the problem are those who prefer to store their funds not on exchanges, but on local wallets: in order for their bitcoins to get into the system, they need to be transferred from their own storage, and today this takes a lot of time and takes a lot of nerves.
2. Possibility of a “bubble” formation. Many investors have serious doubts about whether to invest in Bitcoin in 2017. The thing is that in less than five months the exchange rate has almost doubled (January - $1,000, mid-May - $2,050).
   Of course, there are also objective reasons for Bitcoin, of which there are also many, so the current growth does not necessarily need to be viewed as a “bubble” that will definitely burst. Of course, the volatility of Bitcoin is very high (however, one should not expect anything else from an asset with such profitability), however, many analysts predict its rapid decrease due to the stabilization of the development of the most popular cryptocurrency.

Benefits and risks of altcoins

Altcoins are all digital currencies other than Bitcoin. Investments in them today are also profitable, but there are plenty of risks here.

Let's look at the main features of altcoins.

Growth prospects

Altcoins are young cryptocurrencies: most of them are not even five years old. As I said at the beginning, DASH and ETH showed 12x and 8x increases in value in 2016 (for comparison, Bitcoin “only” increased 4x). Other digital currencies also have the potential for almost unlimited growth: very few people know about them yet.

"Low Base"

The “low base” effect is something that can ruin inexperienced altcoin investors: knowledgeable players take it into account, but those who began investing in an alternative cryptocurrency after it has risen many times over may face great disappointment.

What is the “low base effect”? I won’t bog you down with theory, but will go straight to an example.

So, imagine a situation in which some cryptocurrency costs $2. Its popularity is not yet very high - investors do not consider such a digital currency a highly profitable asset and do not pay attention to it.

“Business” players take advantage of this, starting to massively increase the rate of the cryptocurrency, and after a month its rate is already $32.

An increase of 5 times is huge, but it was not supported by any fundamental reasons, but only by the activities of the players, which tomorrow could turn completely in the opposite direction.

In addition, although in relative terms the increase was 5 times, in absolute terms the price of the altcoin increased by only $30. If the price of such a currency increases by 30 dollars again, then its price will be 62 dollars. Not to mention that it will be much more difficult to “warm up” such growth; the relative increase will be much smaller: 62:32 ≈ 2.

A twofold increase, of course, is also not bad, but inexperienced investors are counting on a fivefold increase!

That is why the effect of a “low base” should definitely be taken into account when paying attention to the positions from which the altcoin began to grow.

Speculation and what you need to know about it

This factor mostly applies to those alternative cryptocurrencies that have weak capitalization, however, more stable altcoins can suffer significantly.

The smaller the capitalization (total volume) of an alternative digital currency, the more opportunities manipulators have to “play” with their rate, sharply raising or lowering it depending on their desires. Sometimes it is impossible to identify speculation even based on an analysis of long-term changes in the cryptocurrency rate: sometimes it can artificially rise or fall for several months or even years, and then return to its real values.

As a result, those investors who suffer are those who, having discovered the promise of cryptocurrency, invested a significant part of their funds in it, and then “got broke” when the rate returned to its fundamental values.

It is possible to escape from the influence of speculators only through a comprehensive analysis of the technology on which the altcoin is based: if it is truly promising (for example, ETH), then even the combined efforts of many manipulators will not be able to stop the reasonable growth of the rate.

Trends and interesting characteristics of cryptocurrencies

The next thing I must tell you about is the trends that exist in the world of cryptocurrencies today.

Decrease "importance" of bitcoin

The first (and probably the most important) is the reduction in the “importance” of Bitcoin.

What I mean?

At the beginning of 2016, Bitcoin accounted for more than 80% of the mass of all cryptocurrencies, but today this figure only slightly exceeds the 50% mark. The capitalization of all altcoins increased to $28 billion (for comparison, in 2016 it was $1.7 billion).

This is a trend you should definitely pay attention to when deciding where to invest in 2017. - It is quite possible that the most profitable investment will be buying an alternative digital currency rather than Bitcoin.

Income from storing cryptocurrency units

The next interesting feature of altcoins is income from storing cryptocurrency units.

For example, DASH masternodes bring income to their owners (provided they maintain “online” status) from coins mined by miners. If the formation of new altcoin units occurs through POS mining, then if the investor has funds in the local wallet and there are no transactions with them during a certain period, interest “drips” onto them.

Availability "voting rights" of the investor

Another characteristic of an altcoin that can play a decisive role in deciding which cryptocurrency to invest in is whether the investor has “voting rights.”

What is it?

If the owner of altcoins accumulates a certain percentage of all units of a given digital currency, then he acquires a certain influence in deciding where to “move next.” Of course, the percentage to be able to make decisions must be quite high, and not all cryptocurrencies have such an opportunity.

Different views of legislation

The final feature of cryptocurrencies is the different views of legislation. So, for example, Bitcoin today can already be used in Japan as an official means of payment on a par with the state currency.

For altcoins, such an opportunity has not yet been provided in any country, but their legalization is also not far off.

Where is the best place to trade currencies?

Today there are several operating on the Internet where, after registration, you can buy both bitcoins and popular altcoins. Funds can be sold (exchanged for another cryptocurrency) or withdrawn from the system to a bank account or e-wallet at any time.

Exchanges show users up-to-date information on the rates of all digital currencies, which means that the investor has time to react to changes and maximize his profit.

Among others, I would like to highlight two:

• Exmo.me- Russian-language exchange operating since 2013. It integrates many payment systems convenient for Russian citizens. It presents only popular cryptocurrencies: Bitcoin, Latcoin, Dogecoin, Dash, Ethereum
• Poloniex.com- a global giant, which is a more serious and functional tool for real speculators. Sony altcoins are presented here

Conclusion

Investing in cryptocurrency is a good way to earn income if the size of your savings is not very significant. Even if the rate falls significantly, you will not lose much, but if it rises, the profit received will be very noticeable.

As for investors who are ready to invest large sums, I would recommend that they distribute funds between several cryptocurrencies: even if only one “shoots”, the income will be much greater than when using traditional investment instruments.

This concludes my short review about investing in cryptocurrency.

If you still have any questions about the topic of the article, be sure to ask them in the comments - we will read and try to answer as thoroughly as possible. If we have readers who have already invested in digital money and received real income from it, be sure to tell us about your experience - our readers will really appreciate your wise advice.