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Cryptocurrency Investments: FAQ

Cryptocurrency Investments: FAQ

28 Oct 2020
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Cryptocurrency can be a little complicated to those who are just getting into it. If you’re new to cryptocurrency investments use this FAQ for any questions you may have.

1. What is Cryptocurrency?

Cryptocurrency is essentially a decentralised currency that is purely digital and is traded among people online.

2. How does it work?

Think of a cryptocurrency website as a marketplace where various people get together to buy and sell what they have, but with added security and protocols to protect you from frauds and hackers.

3. Why do people use cryptocurrency?

Originally, cryptocurrency was intended as an alternative to regular currency, but recently it has been used as an investment opportunity similar to stocks or real estate.

4. What was the first cryptocurrency?

The first cryptocurrency was Bitcoin which was invented by Satoshi Nakamoto in 2008 and released as software in 2009, and it is still traded today. It's price is $16,099 AUD at the time of writing.

5. What is a blockchain?

A blockchain is a digital database that all cryptocurrency transactions run through. It's used to keep track of how much cryptocurrency is being traded and where it's going.

6. How many cryptocurrencies are there?

There is no exact number of cryptocurrencies as it uses an open-source engine, so anyone can create a cryptocurrency at any time.

7. What is a stablecoin?

A stablecoin is a type of cryptocurrency that has its price attached to an outside source such as Gold. It’s used as a safer version of cryptocurrency that is free of up and down swings.

8. Can you make money with cryptocurrency?

Yes, it is possible to not only use cryptocurrency as an investment but to also make a living off it similar to how stock traders make money.

9. Is it safe to buy cryptocurrency?

The thing that makes cryptocurrency safe is that you don't have to reveal any details about yourself, such as a credit card number. Each transaction is recorded on the blockchain so it's extremely hard to be scammed or cheated.

10. Is cryptocurrency illegal?

Cryptocurrency is not illegal to use, although some have used its anonymity to do illicit things which is illegal. If you're simply buying it to invest with it, then you have nothing to worry about.

11. Can I buy real-world things using cryptocurrency?

Yes, the idea of accepting cryptocurrency as payments is coming to more and more businesses. Cryptocurrencies, like any currency, can be used to purchase goods and services except that crypto are digital and provide secure online transactions.

12. When is the best time to buy?

You should track a cryptocurrency over the course of a month and see what it's general ceiling price is. Once it dips lower, then that is the best time to buy. You can use our crypto tracker to keep you updated with crypto prices.

13. When is the best time to sell?

It is hard to put an exact time when you should sell, but a general rule some traders have is to sell once their initial investment goes up by 25%

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