Allow Two-Factor Authentication
Keep in mind, most cryptocurrencies such as Bitcoin can’t be hacked in the sense that someone can manipulate its programming as they wish. However, the first line of safety is a person’s personal account. If funds are being carried on a cryptocurrency exchange, it’s necessary to use secured and unique passwords which are not used for any other account.
The next step will be to turn on two-factor authentication. If two-factor authentication is enabled, then even if anyone uses someone else’s password, they’ll still require to be approved via a text which will be sent to that person’s Google voice number.
Using of Crypto Wallet
A crypto wallet is a platform that makes it possible to store, receive, and transfer cryptocurrency. You will find many different types of wallets, but among them, the two common categories are hot and cold wallets.
- Hot Wallets: Hot wallets are somewhat connected to the Internet. If a hacker is able to manipulate their way into someone’s exchange account, they would be able to transfer the cryptocurrency. In addition, if the exchange itself is hacked, the hackers could steal the cryptocurrency as well.
- Cold Wallets: Unlike Hot Wallets, cold wallets are not connected to the Internet and therefore are technically safe. In fact, many cryptocurrency exchanges that hold large amounts of cryptocurrency lead to grip a majority of the cryptocurrency in offline cold wallets to reduce the loss if a hack would occur.
Things you should know about Cryptocurrency
Cryptocurrency Transactions are Taxed:
As cryptocurrencies are decentralized in nature, they are not in control by a central authority or the government. But, this does not imply that you don’t need to pay tax if you invest in cryptos.
Depending on your holding term, it may be listed as short-term or long-term funds gains. However, the status of cryptocurrency, whether it is a currency or property is still uncertain. Unless there is an explicit regulation directing the market, there is no way to state how these assets can be taxed.
Cryptocurrencies are not Expensive:
Frequently, when we say cryptocurrency, people lead to correlate it with Bitcoin. You may be conscious that 1 Bitcoin value is now a whopping ₹30 lakhs 2 per coin. Many potential investors think that they can’t bear to invest in such high valued assets. What most people don’t know is that you can buy Bitcoins in fractions too. In India, CoinSwitch Kuber allows its users to buy Bitcoin with a minimal investment of just 100 Rs.
Investing in Cryptocurrency is Not Illegal:
There is an ere delusion that cryptocurrencies are illegal. Recently, RBI stated that it is examining the necessity to make a central digital currency (CBDC) to regulate the market, which could be a certain move for the crypto market. Many retail and renowned investors are funding many fintech startups to create space in the market. Today, more than 2 million users have enrolled as investors in cryptocurrency start-ups.
Value of Crypto is as Real as Rupee:
Generally, cryptocurrencies are digital assets and don’t hold a physical form like paper money. This vague nature of cryptocurrency has influenced many to think that crypto does not have real value and is only a set of codes. But, the reality is that no currency holds real value unless people consider it. Yet, many people have put their belief in cryptocurrencies as a means of exchange and a store of value.
Investing in Cryptocurrency is Very Easy:
Investing in cryptocurrency has led across as something adapt for technologically educated people and that others may not attain success in it. A few years back, investing in cryptocurrency was quite complex, and that situation changed after the Supreme Court ordered the RBI to ban cryptocurrency.
The cryptocurrency is nothing but funds that exist only virtually. Consequently, it is a decentralized, digital currency that uses digital records as a form of exchange instead of paper money.
Final Thoughts
Undoubtedly, cryptocurrency is an emerging market asset that is certain to continue evolving in the upcoming year. We know investing in cryptocurrency can be very risky, but its reward is given to those who overtake it with a long-term sight of financial return.
Understanding cryptocurrency basics will guide you to be more conscious of the ongoing cryptocurrency exchange.
Although as an investor, even if you are profoundly against cryptocurrency, it’s essential to have a basic knowledge of it not only to follow up with the news but also for describing it to others, such as colleagues and family, who may be thinking of investing in it.
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