Is it possible to invest in Blockchain? Your questions answered
Despite the rise in blockchain assets, 56% of US adults invested in the stock market in 2022. This figure has remained stable in recent years.
Blockchain assets are popular, but they are not the right choice for every investor. Assets come in different forms, but most of them are volatile.
So how can you invest in blockchain? What are the advantages and disadvantages? Keep reading to find the answers you’re looking for.
Can you invest in Blockchain?
Blockchain is a popular technological advancement that powers cryptocurrencies such as Bitcoin, Ethereum, and even altcoins. The technology tracks the creation and exchange of crypto and digital assets like it.
If you currently own cryptocurrencies, you are already investing in Blockchain! This is the most popular way to get involved with the technology.
If you are not currently investing in blockchain and want to, follow these steps to jump on the bandwagon:
Choose your blockchain-based assets
Crypto is the most common blockchain asset, but there are alternative investments to look into. Research the various options to determine which one fits your needs and financial goals.
Bitcoin and Ethereum are popular cryptos, but they are going to become more expensive due to the increased demand.
You can also invest in over 6,000 different cryptocurrencies, such as Polkadot. See here for more about this altcoin. Generally, altcoins are cheaper investment options compared to Bitcoin.
NFTs (non-fungible tokens) are other assets on the blockchain that are creating a wave.
After looking at the various assets, consider your investment objectives and risk tolerance to make the right decision. You can always invest in more than one asset.
Choose a stock exchange or broker
Now that you’ve chosen a resource, you need to figure out where to buy it. Use a crypto exchange or brokerage where you can buy, sell and store your digital assets.
Coinbase is a regular crypto exchange and Robinhood is one of the best brokerages. Each platform will have its own available assets and fee structures.
Fund your account
Now that you have an exchange or broker you feel comfortable with, create an account. You must then fund your account with fiat currency, such as US dollars.
Depending on what the platform accepts, you can link your debit or credit card to the account. Some platforms allow you to use PayPal and other payment services.
Only fund your account with what you can afford. Don’t invest money that you can’t risk losing.
Buy your chosen asset
After the deposit is cleared, you can immediately purchase the selected digital asset or assets. For any cryptocurrency available on the exchange, there should be a price amount and a buy button.
Store your belongings
Most novice investors choose to store their assets in the wallet hosted by their chosen exchange or brokerage. However, your investments are safer in a wallet that is less accessible.
Offline hardware wallets are the most secure crypto wallets out there. If you invest large amounts, consider the different types of wallets.
What are the risks?
Any investment comes with risk, and cryptocurrency investing is no different. Blockchain assets are risky and not suitable for every investor.
For example, Bitcoin alone is an extremely volatile cryptocurrency. Since its popularity, crypto has lost half of its value more than once.
Owning crypto is also risky because it is possible that the government could make blockchain assets illegal. Although unlikely, it is important to consider the restrictive regulations the government may impose.
For these reasons, do not invest important funds such as pensions or life savings in risky asset classes.
What are the pros?
When investing in blockchain, there are risks, but there are some benefits that you can experience. The most common pros are:
- Potential investment gains
- Distributed ledger security
- Decentralized financial functions
In the coming years, some experts believe that blockchain assets could double in value. For investors, this is a potential opportunity to make money if you can wait for long-term gains.
Another major advantage of blockchain investments is that they use distributed ledger technology. This makes crypto and other assets extremely secure and difficult to manipulate.
The blockchain also allows crypto assets to be exchanged directly from people all over the world. Currently, there is no central governing authority or intermediary in the United States.
What are the disadvantages?
We’ve discussed the risks of investing in blockchain technology, but there are more downsides than volatility.
For example, if you use the blockchain to send crypto to the wrong wallet, it is unlikely that you will be able to recover your money. The same applies if your account is hacked.
It is possible to lose access to the wallet. You may forget the password of a software wallet and not be able to get back in. If you have a physical hardware wallet and lose it, you won’t see your digital assets again.
Ready to invest in Blockchain?
There is more than one way to invest in blockchain, but buying cryptocurrency is by far the most common. If you are interested in using blockchain investing, crypto will be the easiest way to get started.
Cryptocurrencies are available to everyone, but you still need to understand the pros and cons of this investment. Once you have some money to play with, you can follow the steps in this guide to start investing.
Want to learn more about cryptocurrency and technology? Check out the other topics on our blog.
Press release distributed by The Express Wire
To view the original version on The Express Wire visit Is It Possible to Invest in Blockchain? Your questions answered
