Here’s the thing about cryptocurrency – it’s not as intimidating as you may have first thought. Once a community for tech geeks and finance nerds, it’s now opened up to welcome everyday people, with a whole heap of new products, apps and services to help you navigate your first digital currency investments.
So, WTF are cryptocurrencies?
Cryptocurrencies are a form of global currency, that are purely digital and live on the internet. You can buy them with normal dollars, and then spend them, swap them, trade them, store them and sell them. If you ever need to swap back to old school “cash”, just go through an exchange app and get it deposited into your account.
Bitcoin, the network, for example, works like one big back account, which we can all see, but still have our own special access card for what’s ours. The Bitcoin currency is like the dollars in that account. So a wallet is like a bank – in your pocket! .
Amber is the first Australian first app that lets you swap your spare change for Bitcoin and other digital assets, automatically. The best part? You can get started from as little as 50 cents a day!
Amber is coming soon to both Google Play and the App Store (sign up to our growing community here to get first access!).
So, if you’re keen to start your journey with digital currencies for the first time, take note of our step-by-step first timer’s guide for investing in cryptocurrency below.
Choose A Cryptocurrency Wallet & Exchange App
A cryptocurrency wallet is used to access, store, send, receive and track digital your currencies, similar to the way a traditional wallet is used to store money, but with some cool digital features.
Some wallets, like Amber, allow you to hold a bunch of different digital currencies, and know your money is safe and secure. How?
Because the funds in your wallet are protected by a private key (like a password), which enables you, and no one else, to control your currency.
Decide Which Kind Of Cryptocurrency You Want To Invest In
The best way to decide which cryptocurrency you’re interested in, is to look at the purpose of the currency, how long it’s been in market and decide whether or not you believe in the mission of the project, the network and the team.
A general rule of thumb is the longer a cryptocurrency has been in the market, the more trusted it is.
The next question to ask yourself is whether you’re interested in being involved for the long or the short term. Short term is more about trading, long term is more about investing, and different methods are best for different people. This is all important because it will affect the amount of money you allocate and how you approach it. More on that later!
Bitcoin remains the most popular cryptocurrency, followed by Ethereum and a generally consistent top 10-20 other currencies. You can read more about the difference between Bitcoin and Ethereum below.
When Is A Good Time To Start Investing?
Knowing when to invest in cryptocurrencies is really hard (even the pros can end up getting their timing wrong!), and this is where dollar-cost averaging comes in.
Dollar-cost averaging means choosing to invest a certain amount on a particular investment regularly, regardless of the asset price at the time. The idea behind this strategy is to spread your investments out to achieve a lower average cost base, which means when prices are high you end up buying less (controls your FOMO), and when prices are low you will end up with more (assuming it’s a good investment, you’ve then picked up a bargain).
This tried-and-tested investment technique formed the foundation of the Amber app, letting you average out the amount you spend on investments over time, using your spare change.
The cool thing about Amber, is that it makes dollar cost averaging something you can do on auto-pilot, automatically swapping the spare change from your daily transactions to crypto.
Rather than trying to catch the market at a specific high or low point, and getting it wrong, dollar cost averaging is the smartest and safest way for beginners to start investing.
Buying Your First Cryptocurrency
Buying cryptocurrency has traditionally been very difficult. You’ve needed a wallet, an exchange account, private keys, seed phrases, etc.
These days, there are apps like Amber trying to make it as simple as buying clothes on the internet.
The process generally involves signing up to a service, verifying your identity, funding your account and then using that money to buy the different currencies of your choice.
Services like Amber, which offer a wallet, will let you actually use the crypto once you’ve bought it, while most services that are “exchange only” let you buy and then send to a separate wallet provider (like Amber, or similar).
So, ready to get started?
Sign up to our community to be the first to hear about our launch on Google Play and the App Store.
Disclaimer: Amber Labs Pty Ltd does not provide finance, investment or trading advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, finance, investment or trading advice. You should consult your own finance, investment and trading advisors before engaging in any transaction.