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How Cryptocurrencies Work?(5 Things to Know About Buying Cryptocurrencies) 

Cryptocurrency is one of the most profitable asset classes in the world right now. Big coins like Bitcoin and Ethereum have only been around for less than 20 years, and their value has increased by more than 350,000%. 

And due to the continuous development of Internet technology, it is becoming easier to buy cryptocurrencies, which leads to increasing risks. Especially when you are entering the world of cryptocurrencies as a newbie, you should proceed with caution, especially when buying cryptocurrencies for the first time, it is best to consider the following five things first. 

  1. Is it a long-term development project 
  1. Cryptocurrencies Rely on Community Support 
  1. The developer team behind 
  1. Past and present performance 
  1. cautious but decisive attitude 

Always remember that not all cryptocurrencies are created equal. Some are designed for gaming, some are great for staking investments, some have relatively stable stores of value, and many more are just scams.

1. Is it a long-term development project

As you explore the cryptocurrencies you want to buy, always remember that the best cryptocurrencies will always be those that have utility beyond pure speculation. When you’re in the early days, find cryptocurrencies that are sustainable projects with long-term goals. 

For example, does the project introduce new features? Or is the development team using an old technology in a better way, or as a basis for a new approach? These ensure that the application of the project is practical and achievable, and can be found in the white paper of the project. 

At the end of the day, what matters is that the investment is aimed at developing an actual project, understanding the cryptocurrency economy and the background of the creator. Find out if an experienced crypto giant is involved, and if funding is in place so the team can successfully complete their project. 

These are all important factors that newbies need to understand before starting to buy a new cryptocurrency. 

2. Cryptocurrencies rely on community support 

Consult top online crypto communities to see what people are saying about the cryptocurrency you are interested in. Foreign forums such as Reddit and Discord are good communication communities, Of course, searching mainstream social media is also necessary. 

Find out what experienced traders, investors, and developers have to say about crypto with these resources. In particular, focus on answers to questions that are not addressed or answered in white papers and press releases. 

It is important for newbies to realize that no project can thrive on being composed solely of crooks. In any community, there are developers, content creators, fans, and people who provide perspective and analysis. 

Project success is only possible when these people come together. 

3. The developer team behind 

You want to make sure you research the developers in detail before investing in the project, including researching the people behind the development, the developers’ activities and the development roadmap or timeline. Investigate content paths including, but not limited to, all of their social media, GitHub and codebase contributions, and past projects involved. 

Be extra careful if the developer behind the cryptocurrency project is anonymous. Because anonymity will leave investors with limited ways to hold them accountable. Especially in the case of a Rug pull, you will not get your money back. 

Of course, the above tips do not mean that all anonymous projects are scams and will fail. But when you’re investing a lot of money, it’s imperative to have a certain level of security in the first place. 

4. Past and present performance 

For obvious reasons, most experienced traders do not recommend buying when cryptocurrencies are falling. Of course, if the asset is doing well, the decline is not such an important indicator in the long run. 

After researching a cryptocurrency online, go to your favorite exchange and see how it is performing. If the cryptocurrency has been around for a few years, pay attention to its market cap, trading volume, overall trends, market history, etc. 

When you find a cryptocurrency project with a high market capitalization, a decent uptrend, and a decent amount of driving activity, you can put that project on your shortlist for long-term investment. 

5. Cautious but decisive attitude 

After completing all the preliminary investigations, you can start investing. Be aware, however, that investing in cryptocurrencies carries certain risks, no matter how impressive and attractive the project may seem.  

The crypto market in particular is strongly influenced by market sentiment and fundamental analysis. We advise against bundling all your assets on one cryptocurrency. 

We write books, which, considering where you’re reading this, makes perfect sense. We're best known for writing science fiction, political news, technology, entertainment, etc. We also writes non-fiction, on subjects ranging from personal finance to astronomy to film, was the Creative Consultant for the Stargate. We enjoys pie, as should all right-thinking people.

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