How to invest in virtual currencies? The most complete introductory learning materials for virtual currency novices

The virtual currency investment market (or cryptocurrency investment market) has become more and more popular in recent years, and cryptocurrency news is often seen in the news.

But this does not mean that you should rashly participate in the cryptocurrency market. Investment, because this is a new market with potential but a lot of noise. Even Mr. Market himself is constantly learning this knowledge.

Because this field is very complex, Mr. Market has compiled the information and knowledge he has learned so far into this lazy man’s package for virtual currency investment.

The following will talk about the working principle of cryptocurrency and the safer way to invest in cryptocurrency;
Although whether cryptocurrency can ultimately be profitable or not depends on investment and trading decisions,
But we still hope that you can finish reading this virtual currency After investing in LazyBag, learn the basics of cryptocurrency investing.

If you want to have a good understanding of what cryptocurrency is and how to invest in cryptocurrency, you can read the following article slowly.

This article is quite long, and the related extended knowledge is quite complex. Mr. Market recommends that you add this lazy package to your bookmarks (Ctr+D) and give yourself relatively ample time to read it to the end.
I will write new articles in the future, and I will also update this lazy package from time to time to make it more complete.
Of course, if you find it helpful, you can also share it with friends around you who need it.

Let’s get started.

This article is for personal experience sharing and information compilation. It does not intend to recommend any investment or purchase. Investment must be risky. Cryptocurrency is an extremely high-risk investment target. You must do your own research and judgment before investing.

What is virtual currency?

Virtual currency (Virtual Currency) is opposite to the currency we use in daily life.
It is currency without entity, but not all virtual currencies can have value in the real world (such as a fictional currency in comics).

A common misunderstanding is that many people regard virtual currency as digital currency or cryptocurrency.

Digital currency is actually a type of virtual currency, which mainly refers to those currencies that are composed of computer digital technology (such as 7-11’s OpenPoint or the currency in online games);
The definition of cryptocurrency is narrower, Specifically refers to currencies such as Bitcoin or Ethereum developed with blockchain technology.

Most of the virtual currency investments that we often hear refer to the cryptocurrency investment part alone.
But now, cryptocurrencies like Bitcoin are gradually favored by investors.

This is because of cryptocurrencies. Currency has the following characteristics:

• is not currency issued by a central bank or government agency.
• Only electronic (network) methods can be used for transactions, transfers, and storage.
• Use blockchain technology to record transaction data. Each data is highly secure and anonymous and will not be tampered with.

In short, cryptocurrency is a currency built on blockchain technology. All its transactions are completed through peer-to-peer or smart contracts. Therefore, cryptocurrency is decentralized (DeFi). Compared with traditional With a financial model supervised by a central authority (CeFi), cryptocurrencies have the huge advantage of being able to fully control their own assets.

What are the common cryptocurrencies?

According to the trading volume ranking and discussion of cryptocurrency at the moment of writing, the following are the more commonly heard cryptocurrencies:

• Bitcoin (BTC)
• Ethereum (ETH)
• Binance Coin ( BNB)
• Solana (SOL)
• Ripple (XRP)
• Doge (DOGE)
• Litecoin
• Bitcoin Cash (BCH)
• EOS

Various Cryptocurrencies Currencies have different functions and characteristics, which need to be understood in detail individually.
Of course there are many cryptocurrencies, far more than these, here is just a very small list.

Is virtual currency worth investing in? Should I invest?

Although we know that virtual currency is not equal to cryptocurrency,
In order to make our virtual currency investment teaching more focused, the following discussion will focus on cryptocurrency.

Before you decide to invest in cryptocurrency, please make sure you understand the advantages and disadvantages of cryptocurrency.

Evaluate your risk tolerance first

If you are unwilling or unable to tolerate extremely volatile investments, and cannot bear the high returns or losses that may result,
then Mr. Market recommends not to use cryptocurrency as a Investment targets.

Mr. Market reminds: The cryptocurrency market is much more volatile than the stock market, is less liquid than the traditional financial market, and has higher risks of speculation and manipulation. Even Bitcoin, which has the largest market value, may It rose or fell more than 30% in one day. Note that it is "within one day".

In addition, the cryptocurrency market is open for trading 24 hours a day, 365 days a year, unlike the Taiwan stock market or the US Nasdaq exchange, which is closed on weekends or evenings.
Therefore, price fluctuations will be felt anytime and anywhere, more intensely than other financial products.

Should you invest in cryptocurrencies? There are a few questions to think about first:

• Do you think cryptocurrency is the future development direction and may gradually replace the functions of traditional legal tender? Are you willing to continue to accept new knowledge in this new field?
• Do you support the idea that cryptocurrency is a decentralized financial system that is fully controlled by its holders?
• Do you understand the peer-to-peer transaction mechanism that blockchain technology values, and believe in the security of this technology.

If you agree with the above points, then you may want to consider spending more time researching cryptocurrency investment.

How to determine the value of a cryptocurrency?

Although the overall market value of the most representative Bitcoin has exceeded US$1 trillion (July 2024),
This does not mean that only Bitcoin is a valuable cryptocurrency.

There are thousands of cryptocurrencies in the entire cryptocurrency market, such as Ethereum, Litecoin, etc.
They have their own prices, demands, transfer speeds and fees, and even use different blockchain technologies. Various factors may affect the value and future of a cryptocurrency.

Faced with the cryptocurrency market full of noise, if you want to properly evaluate the value of a cryptocurrency and avoid falling into scams or taking excessive risks,

It is recommended that novices do the following 4 homeworks first:

• Read the blockchain Project white paper
• Study what innovations blockchain projects can bring
• Evaluate the value of cryptocurrencies in the project
• Understand and avoid cryptocurrency scams

For more details, please read: Which cryptocurrency is worth investing in? ? 4 things to do before buying cryptocurrencies

How to buy/trade cryptocurrencies?

The fastest way to trade cryptocurrencies is to buy from a cryptocurrency exchange.

Cryptocurrency exchanges can be divided into two types: centralized exchanges (CeFi) and decentralized (DeFi) exchanges, depending on their operating modes.

If you don’t know the difference between DeFi and CeFi, please read: What is the difference between decentralized finance DeFi and CeFi?

Currency must be liquid, and exchanges (currency exchanges) exist to improve the liquidity of cryptocurrency. It can be said to provide a place where virtual currencies can be bought and sold with confidence.

Centralized Exchange (CeFi, Centralized Exchange):

When investors’ currencies are traded, they will be kept in the exchange for safekeeping. Daily transactions are bought and sold in the database in the exchange, not on the blockchain. Completed on the Internet, so the virtual currency will only be taken away after the investor withdraws it.

The risk is that the exchange database must store a large amount of virtual currencies, and it is also more vulnerable to hackers.

Decentralized Exchange (DeFi, Decentralized Exchange):

The buying and selling behavior of decentralized exchanges all occur directly on the blockchain rather than in the exchange’s database. The advantage is that the exchange does not maintain There are a large number of virtual currencies, and the information is quite open and transparent.

The benefit to investors is that the exchange does not directly control its own assets, but because it is still a non-mainstream trading channel, the currency liquidity, transaction volume, and user volume are very low, and it may not be so convenient to operate.

Can I invest in cryptocurrencies without going through an exchange?

We discussed above that buying Bitcoin on CeFi or DeFi exchanges is obviously the most direct way to hold cryptocurrency, but if this method exceeds your risk tolerance, you can actually do it through other methods. Invest indirectly in cryptocurrencies.

In addition to buying funds directly through exchanges, there are currently several common ways to participate in cryptocurrency investment:

Invest in cryptocurrency funds
• Cryptocurrency ETFs (such as Bitcoin ETF)
• Invest in holding large amounts of cryptocurrency Corporate stocks (I often hear these companies being hyped in the news, but I don’t recommend investing in this way)

These channels are usually relatively complex, and some have higher costs.

It is recommended that if you really want to invest, you can invest through encryption Buying and selling on currency exchanges is relatively simple and the holding costs are relatively low.

Trade cryptocurrency CFDs through established foreign exchange or CFD exchanges

If you don’t want to hold the spot of these cryptocurrencies, just to buy low and sell high to earn the spread,

You can also use the mainstream foreign exchange or CFD exchanges in the financial market. CFD exchanges,
for example, use overseas traders as a medium to trade cryptocurrency CFDs.
Some trading platforms have been established for more than ten years and are supervised by regulatory agencies. They have a long history and are relatively safe in transactions. higher.

However, contract trading can only be done to earn price differences. It is not actually traded on the blockchain. Therefore, the currency cannot be withdrawn, and the long-term holding cost is also high. This should be noted.

How to store cryptocurrency?

After buying your own cryptocurrencies, you have to find a place to store them safely.

如今的「中心化交易所」因為規模越來越大，大多數的散戶投資者都會將在CeFi交易所購買來的加密貨幣，直接存放在該交易所的錢包來保管它們的資產（舉例如Binance幣安）。

我們稱為交易所錢包，也就是交易所都有內建錢包的功能。這也是目前在方便性、效率上都比較好的方式。

不過，如果你對交易所錢包，也就是CeFi這種集中式託管的保存方法仍有些擔心，
也可以考慮其他類型加密貨幣錢包，如果還不清楚加密貨幣錢包是什麼，請閱讀：虛擬貨幣錢包是什麼？為什麼分成冷錢包、熱錢包？

常見的加密貨幣錢包能區分集中在網路、不需硬件的「熱錢包」，以及需要USB硬件的「冷錢包」。

以下簡單列出2種類型的錢包優缺點：

熱錢包(Hot Wallet、Online Wallet）

• 優點：方便、操作好上手
• 客：有被騖
優點(可能性不高，但機率不是零)
• 熱錢包：手機錢包imToken 、 Trust 、 Cipher

冷錢包(Cold Wallet)、硬件錢包

• 優點：安全，不會有入侵風險
• ：缺點錢買USB、每次交易都要插USB、可能弄丟密碼
• 冷錢包： Ledger 、 Trezor 、 CoolWallet S

儲存加密貨幣方法，使用冷錢包類型裡的紙錢包，目前被認為風險相對低

紙錢包就是將自己的私人錢包的私鑰，印出來在一張紙上。
只要不要遺失這張紙本，就沒有其他人能夠存取的錢包，

當然，這風險就是你可能遺失私鑰。

如果還不知道紙錢包是什麼，可閱讀紙錢包詳解。

至於一般投資人會需要紙錢包嗎？

如果你對於加密貨幣的投資屬於長期投資HODL的心態，並且不需頻繁地訪問這筆加密貨幣，那麼使用紙錢包是可以考慮的選擇。

• 比特幣、萊特比、狗狗幣等加密貨幣紙錢包，國外許多人用：Wallet Generator
• 以太坊或ERC20等加密貨幣紙錢包，國外許多人用：My Ethereum Wallet.

市場先生提示：實務上的做法

方便性和安全性其實同樣重要，畢竟加密貨幣如果時常在不同錢包之間轉移，也會產生不少摩擦成本。

金額不大時，也許可以優先考慮方便性即可，使用一兩家交易所的內建錢包，可能就足夠了。

開始有一定資產規模後，考慮方便性和安全性，實務上的做法，會是把資金分散在多個錢包中。

例如：2~3家交易所錢包、1~2個熱錢包或冷錢包。

需要時常交易的加密貨幣，大多還是都會放在交易所錢包中，確定要長期持有的則可以轉移到冷錢包中。

我目前並不特別建議哪個錢包比較好，因為每個人對於方便性的標準都不大一樣，大家可以自行多方比較後再判斷。

如何防止虛擬貨幣詐騙？

任何投資或投機，投入之前都需要對它至少有基本的了解，做過一些功課，真的不懂就不要碰，或者至少不要大額投入。

• 其次是需要了解一些常見的詐騙模式、避免陷入其中，虛擬貨幣投資也不例外。而常見的虛擬貨幣詐騙手法，有以下3種：
• ICO詐騙、龐氏騙局常見的虛擬貨幣詐騙
• OTC場外交易詐騙先生

假交易所詐騙

🎜市場先生建議🎜 4個避開加密貨幣詐騙的方法🎜🎜

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