Cryptocurrency is seen as the new gold by many people. And that is not surprising. Thousands of people buy their money in cryptocurrency every day, and many coins like the Bitcoin and Ethereum go through the roof. But how does making money with cryptocoins actually work? And aren't you already a bit late to board now?

What is cryptocurrency?

Cryptocurrency consists of two words. Crypto stands for "cryptography" (encryption) and "currency" stands for currency. You can therefore combine these two words as cryptography money. Money, which is encrypted. So digital money.

This is what Wikipedia says: "Cryptocurrency (also cryptocurrency or - with an English word - cryptocurrency) is a type of digital currency, which is often used as an alternative money system for regular currencies."

Cryptocurrency can exist without the intervention of a central unit, such as a bank, and is therefore, as it were, unverifiable.

Why are so many people buying crypto today?

As I mentioned at the beginning of this article, cryptocurrency is getting more and more popular, and more and more people are coming to cryptocoins.

The reason for this is because it has so much potential. Many crypto coins now have a very low price, so you can buy many coins for a very low price. Especially in the Coronacrisis that we are in now! Chances are that many coins will increase in value and of course you can make a lot of profit.

Price increases of 100 percent per day are in the cryptomarket no exception. Try getting that interest at the banks J

Another (coherent) reason why crypto coins are so popular is because there is no need for a bank to intervene. You can transfer your crypto coins directly to another person, so there are no transaction costs, and the recipient gets the money immediately. This is particularly interesting for international transfers.

Which crypto currency is interesting?

There are hundreds of crypto coins today. The best known of these is of course the Bitcoin, but besides the Bitcoin there are a lot of others.

Realize that there are many so called "scamcoins" on the market. These are coins that are not interesting in the long term and are often "pumped and dumped" in the short term. So in a short time by a certain group "pumped up" hard, after which the coins are sold quickly again, and the coin is therefore worthless.

It is therefore important that you first do good research when you want to invest money in a coin.

Personally I have invested some money in XRP and Tezos. These projects have an important usecase and solve real world issues. Other coins like Bitcoin and Ethereum are also definitely worth checking out.

How can I buy crypto coins?

What is unclear to many people is how to buy cryptocoins. This is different for every currency, but most coins are for sale through crypto exchanges. Think of this as a kind of trading platform for cryptocoins. Well-known exchanges are Binance, Bittrex, Huobi, Coinbase and Kraken. You have to sign up and follow the Know Your Customer (KYC) procedure. After this procedure you can buy the cryptocoins.

If you want to buy crypto coins, you must have a so-called "wallet". You can download this on the website of the coin you want to buy. When you have this installed on your computer, you will receive a long code, which is the receiving address of your wallet. You can also save your coins on the exchange, but it’s more save to have an “own” wallet.

In my next post I will discuss methods how to trade.