Beginner’s Guide: An Introduction to Cryptocurrencies

Introduction: Investing in cryptocurrencies

The first cryptocurrency to emerge was Bitcoin which was built on Blockchain technology and was probably launched in 2009 by the mysterious person Satoshi Nakamoto. At the time of writing this blog, 17 million bitcoins have been mined, and it is believed that a total of 21 million bitcoins could be mined. Other most popular cryptocurrencies are Ethereum, Litecoin, Ripple, Golem, Civic and hard forks of Bitcoin such as Bitcoin Cash and Bitcoin Gold.

Users are advised not to put all their money in one cryptocurrency and try to avoid investing at the peak of the cryptocurrency bubble. It has been observed that the price has suddenly dropped when it is at the peak of the crypto bubble. Since cryptocurrency is a volatile market, users must invest an amount that they can afford to lose because there is no control of any government over cryptocurrency as it is a decentralized cryptocurrency.

Steve Wozniak, co-founder of Apple predicted that Bitcoin is the real gold and will dominate all currencies like USD, EUR, INR and ASD in the future and become a global currency in the coming years.

Why and why not to invest in cryptocurrencies?

Bitcoin was the first cryptocurrency to be created and after that around 1600+ cryptocurrencies were launched with some unique feature for each coin.

Some of the reasons I experienced and would like to share, cryptocurrencies are created on a decentralized platform – so users do not require a third party to transfer cryptocurrency from one destination to another, unlike fiat currency where a user needs a platform like a bank to transfer money from one account to another. Cryptocurrency built on highly secure blockchain technology and almost zero chance of hacking and stealing your cryptocurrencies as long as you don’t share your critical information.

You should always avoid buying cryptocurrencies at the peak of a cryptocurrency bubble. Many of us buy cryptocurrencies at the peak hoping to make a quick buck and fall victim to the bubble hype and lose our money. It is better for users to do a lot of research before investing money. It is always good to put your money in multiple cryptocurrencies instead of one as several cryptocurrencies have been observed to rise higher, some on average if other cryptocurrencies go into the red zone.

Cryptocurrencies to focus on

In 2014, Bitcoin holds 90% of the market and other cryptocurrencies hold the remaining 10%. In 2017, Bitcoin still dominates the crypto market, but its share fell sharply from 90% to 38%, and Altcoins such as Litecoin, Ethereum, Ripple grew rapidly and took the largest part of the market.

Bitcoin still dominates the cryptocurrency market, but it is not the only cryptocurrency you should consider while investing in cryptocurrencies. Some of the main cryptocurrencies to consider:









Where and how to buy cryptocurrencies?

While it was not easy to buy cryptocurrencies a few years ago, now users have many platforms available.

In 2015, India has two major bitcoin platforms Unocoin wallet and Zebpay wallet where users can buy and sell only bitcoin. Users need to buy bitcoin only from the wallet and not from another person. There was a price difference in the buying and selling rate and users have to pay a certain nominal fee to complete their transactions.

In 2017, the cryptocurrency industry grew tremendously and the price of Bitcoin rose spontaneously, especially in the last six months of 2017, which made users look for alternatives to Bitcoin and crossed 14 lakhs in the Indian market.

Since Unodax and Zebpay are the two major platforms in India that dominated the market with 90% market share – which only dealt in Bitcoin. This gives other organizations the opportunity to grow with other altcoins and has even forced Unocoin and others to add more currencies to their platform.

Unocoin, one of India’s leading cryptocurrency and blockchain companies, has launched an exclusive UnoDAX Exchange platform for its users to trade multiple cryptocurrencies apart from Bitcoin trading in Unocoin. The difference between both platforms was – Unocion provided instant buying and selling of bitcoins only, while on UnoDAX, users can order any available cryptocurrency and if it suits the recipient, the order will be executed.

Other major exchanges available for cryptocurrency trading in India are Koinex, Coinsecure, Bitbns, WazirX.

Users have to open an account in any exchange by logging in with email ID and submitting KYC details. Once their account is verified, they can start trading coins of their choice.

Users must do their research well before investing in any coins and not fall into the cryptocurrency bubble trap. Users need to research the exchange’s credibility, transparency, security features and more.

All exchanges charge a certain nominal fee for each transaction. There are two types of fees – Maker fee and Taker fee. In addition to the transaction fee, you have to pay a transfer fee, if you want to transfer your cryptocurrencies to another exchange or your private wallet. The fees depend solely on the coins and the exchange as different exchange have a price difference module for transferring coins.

Major altcoins other than Bitcoin

As mentioned above, Bitcoin dominates the market with a market share of 38%, followed by Ripple, Ethereum, Litecoin, Bitcoin Cash. Exchanges such as UnoDAX, Bitfinex, Kraken, Bitstamp have listed many other coins such as Golem, Civic, Raiden Network, Kyber Network, Basic Attention, 0X, Augur, Monero, Tron and many others. If any of the coins suit your portfolio, you must buy it.

But you have to put money into the market that you can afford to lose because the cryptocurrency market is very volatile and no government has control over it.

When to buy?

There is no hard and fast rule when to buy your favorite cryptocurrency. But the stability of the market should be investigated. You shouldn’t except at the peak of a cryptocurrency bubble or when the price is constantly falling. The best time is always considered when the price is stable for a while at a relatively low level.

Cryptocurrency storage method

Before buying any cryptocurrency, you need to understand how to protect your cryptocurrency.

Generally, all exchanges offer a warehouse where you can safely store your coins. You must not share your username, password, 2FA when you have cryptocurrency on exchanges.

Paper wallet, hardware wallet, software wallet are some of the channels where their cryptocurrency can be stored.

Paper Wallet: A paper wallet is an offline cold storage method for keeping your cryptocurrency safe. It prints your private and public key on a piece of paper with a QR code printed on it. You only need to scan the QR code for your future transactions. Why is it safe? No need to worry about your account being hacked or any malware attack. You just need to keep your piece of paper safe in the locker and if possible keep two to three pieces of paper wallet under your complete control.

Hardware wallet: A hardware wallet is a physical device where you securely store cryptocurrency. There are many forms of hardware wallet, but the most commonly used hardware wallet is USB. When you keep your cryptocurrency in a hardware wallet, you just need to keep in mind that you should not lose your hardware wallet because once you lose it, you cannot get your cryptocurrency back.

One famous incident, where a person mined 7000+ bitcoins and stored in his hardware wallet and kept it in another hardware wallet. One day he threw away the hardware wallet he stored his cryptocurrency in instead of the damaged hardware and lost all his bitcoin.

What can be bought from cryptocurrencies in India?

Most people assume that buying and selling any cryptocurrency is just for investing and getting high returns in the long and short term. Influencers and bitcoin investors believe that in the coming years, Bitcoin will dominate all fiat currencies and will be accepted as an international currency.

Dell is one of the largest e-commerce companies that accepts bitcoin as payment. Expedia and UNICEF are other examples.

In India, Sapna Book Mall accepted bitcoins as payment through the Unocoin merchant service. People booked movie tickets through BookMyShow or recharged their mobile phones through the Unocoin platform. According to the report, they have stopped the service but plan to restart it in the near future.


Cryptocurrency is one of the growing investment sectors and has given good returns from real estate, gold, stock market etc. in the past. You can buy a cryptocurrency and hold it for the long term to get nice returns or opt for a short term profit as we have seen many coins grow 1000%+ in the past. Since cryptocurrency is a volatile market and there is no government control over the industry. A person must invest an amount in any cryptocurrency that he can afford to lose.

You can store your cryptocurrency in a hardware wallet, paper wallet, software wallet if you don’t want to keep it in the exchange you trade from.