The crypto industry is ever-growing and this means that new people begin their crypto journey every day. But while getting started with cryptocurrency can be exciting, it can also be a bit daunting given how complex the industry is and how many tokens exist within it.
But there is no need to feel overwhelmed by the crypto industry. In this guide, we’ll break down the things that you need to know to get started and how to go about choosing and interacting with the wealth of cryptocurrencies that exist all over the world.
One of the first things to know about cryptocurrencies is that there are a lot of them. At any given time, there are over 10,000 tokens in the market and all of them are unique. One of the tokens you’ve most likely heard of is Bitcoin, as it is the world’s most valuable and famous cryptocurrency.
Every cryptocurrency that is not Bitcoin is referred to as an altcoin and there are many types of altcoins. There are utility tokens that are designed to be used within specific projects like to access features in a blockchain-based game, stablecoins which are pegged to the value of a fiat currency or a commodity, and so on.
But keep in mind that even within the crypto world, there are shitcoins; coins that have no value but are being pushed towards consumers by those trying to make a quick buck. Newer crypto investors are especially susceptible to such scams as they are less experienced.
And because the crypto industry has so many tokens, shitcoins abound. The reason why so many tokens exist is because creating a digital currency is much easier than a ‘traditional’ currency. Creating a crypto only requires some knowledge of the blockchain and maybe a website to promote it, so this lower barrier to entry means that there are many cryptos being made.
Even if you understand what a shitcoin is, it is important to know how you should avoid them and pick valuable cryptos. One of the first things you should do is keep your ear to the ground about which promising tokens are on the rise. Many sites publish guides to new crypto coins daily and weekly and these will tell you which tokens are getting more popular and why they might be worth it.
Make sure that the tokens in question have a genuine community behind them, as this is often indicative of how worthwhile they might be. It is also important to investigate what the use case of the token is. Besides hype and a large community, a token needs to have practical use if it is going to succeed in the market. Before you choose any token, ask yourself what it is going to be used for. All the top tokens have a use case they are known for, whether it's for cross-border settlement, use within a unique project, and so on. Make sure whatever new token you are investing in has the same. One way to do this is to visit its website and read its whitepaper, which should outline all the details about its token supply, price mechanisms, use cases, and much more.
You should also tap into the crypto community online to hear about new tokens before everyone else. Join online forums, Discord servers, Telegram chats, and other places where crypto lovers congregate. From here, you’ll hear of the new tokens on the scene and what the community at large thinks of them. Though not always accurate, you’ll usually hear whether such a token is pegged to fail or succeed.
Once you choose a token you want to invest in, there are several ways you can go about it. Newer tokens tend to sell to new investors directly through their website, on a centralised exchange, or on a DEX. Each has its own benefits and downsides.
If a project holds a pre-sale on its website, the tokens are usually sold at a discounted rate and this can lead to more profit for the investor. On the other hand, buying from a centralized exchange means that the project has been subject to review and scrutiny and so is less likely to be a shitcoin.
You also need to consider why you want to buy a new crypto. If your plans are to use them within a specific project like a blockchain game, keep that at the forefront of your mind. If you want to use the cryptos to make a profit, you have to decide whether this will be a short-term or long-term investment. There are people who buy and HODL cryptos for years before they resell them, so decide if this will be you or not.
There are other things to consider like proper storage of your tokens and paying tax if you dispose of them, and it is best to tackle these as soon as possible. Overall, investing in new cryptos as a newbie does not need to be a terrifying process. What is most important is seeking out the relevant information before you make an investment journey, looking into every token you take a chance on, and leveraging the resources and support of the crypto community. If you do this, you’re more likely to succeed.
Disclaimer
The information on Coinsniper is user-generated and not verified. Coinsniper does not provide financial advice or facilitate transactions.
Also note that the cryptocurrencies listed on this website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments.
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