• What is cryptocurrency
• All about cryptocurrency trading
• Everything you need to know about cryptocurrency

All about cryptocurrency investing

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It can take a lot of work to comb through a prospectus; the more detail it has, the better your chances it’s legitimate. But even legitimacy doesn’t mean the currency will succeed. That’s an entirely separate question, and that requires a lot of market savvy. Be sure to consider how to protect yourself from fraudsters who see cryptocurrencies as an opportunity to bilk investors.

Cryptocurrency is decentralized, meaning it’s not controlled by any government or financial institution. Instead, cryptocurrencies rely on a technology called a blockchain, a distributed ledger that records all transactions across a network of computers.

Because of the volatility in cryptocurrency, you should consider how much you can afford to lose and still meet your financial goals. Staking your entire savings or retirement plan in cryptocurrency could lead to dramatic losses, and the timing of these losses can be difficult to predict. It’s also important to pay attention to the tax consequences of buying cryptocurrency and transaction fees. Hidden costs could lead to spending more than you bargained for.

What is cryptocurrency

Variable renewable energy power stations could invest in bitcoin mining to reduce curtailment, hedge electricity price risk, stabilize the grid, increase the profitability of renewable energy power stations and therefore accelerate transition to sustainable energy.

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On 15 September 2022, the world’s second largest cryptocurrency at that time, Ethereum, transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS) in an upgrade process known as “the Merge”. According to the Ethereum Founder, the upgrade would cut both Ethereum’s energy use and carbon-dioxide emissions by 99.9%.

Variable renewable energy power stations could invest in bitcoin mining to reduce curtailment, hedge electricity price risk, stabilize the grid, increase the profitability of renewable energy power stations and therefore accelerate transition to sustainable energy.

Copyright © 2000- by John Wiley & Sons, Inc., or related companies. All rights reserved, including rights for text and data mining and training of artificial technologies or similar technologies.© 2025 MARVEL

On 15 September 2022, the world’s second largest cryptocurrency at that time, Ethereum, transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS) in an upgrade process known as “the Merge”. According to the Ethereum Founder, the upgrade would cut both Ethereum’s energy use and carbon-dioxide emissions by 99.9%.

All about cryptocurrency trading

Perhaps the most important thing when investing in anything is to do your homework. This is particularly important when it comes to cryptocurrencies, which are often linked to a specific technological product that is being developed or rolled out. When you buy a stock, it is linked to a company that is subject to well-defined financial reporting requirements, which can give you a sense of its prospects.

The difference between a digital currency and a cryptocurrency is that the latter is decentralised, meaning it is not issued or backed by a central authority such as a central bank or government. Instead, cryptocurrencies run across a network of computers. Digital currencies have all the characteristics of traditional currencies but exist only in the digital world. They are issued by a central authority.

However, it’s important to note that to some, cryptocurrencies aren’t investments at all. Bitcoin enthusiasts, for example, hail it as a much-improved monetary system over our current one and would prefer we spend and accept it as everyday payment. One common refrain — “one Bitcoin is one Bitcoin” — underscores the view that Bitcoin shouldn’t be measured in USD, but rather by the value it brings as a new monetary system.

Everything you need to know about cryptocurrency

Lack of historical data notwithstanding, many investors — including institutional investors, banks, and company CEOs — assert that cryptocurrency should be part of everyone’s portfolio. Understanding cryptocurrency, how it works, and the value it can provide over fiat currency is an important first step to investing money in cryptocurrency.

This is usually the reason why a lot of FUD is spread during forks. However, with cryptos that established a lot of credibility like Bitcoin or ETH, I wouldn’t worry to much about exit scams on the original version.

And that led to another of Savage’s rules: Buy cryptocurrency on a legitimate crypto exchange like Coinbase or Kraken, or through an ATM that sells it — though ATM fees to do so are steep. (Coinbase isn’t that machine in supermarkets where you exchange your loose change for bills, I joked on the podcast; that’s Coinstar.)

Cryptocurrencies are legal in the European Union. Derivatives and other products that use cryptocurrencies must qualify as “financial instruments.” In June 2023, the European Commission’s Markets in Crypto-Assets (MiCA) regulation went into effect. This law sets safeguards and establishes rules for companies or vendors providing financial services using cryptocurrencies.

There are thousands of cryptocurrencies available and thousands more that are now defunct. According to CoinMarketCap, there were 10,032 cryptocurrencies as of mid-2024. New tokens are constantly coming to market.