Safely Investing in Crypto: A Guide for College Students KEY TAKEAWAYS By using cryptocurrency, college students can learn about financial trends and new ways of making profits. Investing in 4 main types of coins – Bitcoin, Altcoin, Stablecoins, and Meme coins, and each has its unique features. Pick a coin that is most suitable for your needs but is also secure with a user-friendly interface. Save your coins conveniently in crypto wallets for years for future use.
College students have a limited budget to spend, and saving may seem a complex idea. One way to grow money as well as build a good credit history is to invest in crypto coins.
Learning to invest in trades and digital wallets paves the way to better money management skills. The world of cryptocurrencies is expanding, and with the markets and tech merging, it opens a plethora of opportunities for students as well.
This article will be your guide to understanding the types of cryptocurrencies, their benefits, how to pick one that’s suitable and different virtual wallet types.
How Do Students Benefit From Cryptocurrency?
How can students benefit from crypto?
For example, some college institutions accept certain digital coins as a payment method for tuition.
And you can also quickly transfer funds internationally, including sending and receiving money from home.
But why should students invest in crypto? These are the main reasons:
Learn new financial trends and technologies. When the student budget is limited, funds aren’t the priority. Learning about cryptocurrencies helps decide to invest larger amounts once you are employed. Earn by holding crypto during college. Long-term investments into Bitcoin, Ethereum, and other main cryptos are a smart move. Store them in crypto wallets for years. After completing studies, you might end up with a profit earned just for owning these currencies for a while. Simple, fast, and private transactions. It’s easy to trade cryptocurrencies, and many tokens focus on anonymity. This helps maintain privacy while investing in virtual money.
Cryptocurrencies are still an emerging technology. Although millions worldwide already use it, the estimation is that the number will only grow. Early exposure to crypto usage will result in reaping considerable rewards in a few years.
DO YOU KNOW? Nearly 80% of college graduates invested in crypto have contributed an average of $1,086 to their education. The Crypto Ecosystem: Where to Start?
Here are some fundamental elements of the crypto ecosystem:
Blockchain. It is a database technology, and it’s the basis of most virtual money. Blockchain is a distributed ledger that enables transaction processing and recording. The ledger is transparent and secure, while all data is immutable. Coins. Cryptocurrencies are native blockchain assets, such as ETH or BTC. Smart contracts enable the creation of tokens on an existing blockchain. For example, ERC-20 tokens exist on the Ethereum network. Wallets. These are where you store digital currency, and depending on compatibility, pick a suitable wallet for the desired token. Exchanges. In a virtual exchange, acquire, sell, or trade cryptocurrencies, such as Paybis. Some support fiat currencies, while some focus on online coins.
We suggest starting with these basics to understand how cryptocurrencies work.
Main Types of Crypto
We can divide all existing cryptocurrencies into several categories:
Bitcoin. It deserves a special category because it’s the asset that attracted global attention to the cryptocurrency market. For years, BTC has been the most valuable digital coin. Altcoins. It’s short for an alternative coin. Bitcoin is the dominating token, so all other tokens are altcoins, like ETH, XRP, and LTC. Stablecoins. The idea of these currencies is to have a relatively stable price. Their value is often pegged to a fiat currency or another financial instrument. Some examples are USDT, USDC, and BUSD. Meme coins. The creators get inspiration from a trend or meme and design a token in its honor. The most famous example is Dogecoin, inspired by the Cheems dog who recently passed away.
These are the most well-known cryptocurrency types, but as new projects appear daily, there may be some additions to this list.
Your Perfect Crypto Exchange: How to Choose One?
When planning to
buy USDT or Bitcoin, pick between centralized and decentralized crypto exchanges.
Private companies are usually behind centralized or CEX platforms. They require registering an account, and the exchange acts as a middleman in transactions.
DEX or decentralized exchanges utilize smart contracts to enable direct P2P transactions and no middlemen. They often have a higher anonymity level and fewer restrictions.
Here are other factors to consider when opting for a cryptocurrency exchange:
The supported coins. It’s become a standard for an exchange platform to support hundreds of coins. The bigger, the better, but don’t forget that your priority is an exchange with the coins acquired. Strong security measures. These are relevant to keep any data and funds secure. No history of breaches also speaks in favor of a platform’s reputability. User-friendly interface. Beginners will appreciate navigating their way around easily. Experts will benefit from an intuitive UI since it will ensure they finalize their transaction requests faster.
Now let’s move on to secure cryptocurrency storage.
The graph below shows that the popularity and knowledge of Bitcoins is gaining interest among the young as well as the older generations. Crypto Storage: Wallet Security & Usability
crypto wallets to store your digital assets. It is a software or hardware solution for cryptocurrencies.
Each wallet has a private key that can be accessed for funds and approved transactions.
There’s also a public key, which can be shared with others who send assets to your virtual account.
Crypto Wallet Types
Three different cryptocurrency wallet types exist:
Paper. In the beginning, crypto owners wrote down their keys on pieces of paper. Today, they might store them in a note on a mobile device or even create a QR code. The security isn’t at an impressive level, which is why using paper wallets isn’t trendy. Software. These are apps that allow access to your wallet to manage funds. Some of them come with additional functions like NFC payments. Some examples include Electrum and Trezor. Hardware. These are the safest wallets because they store your private virtual keys offline. It is a device that looks like a USB drive. You can access funds by plugging them into your device. Trezor and Ledger are examples of hardware wallets.
As a combination of safety and usability, software wallets are the most used by cryptocurrency traders. At the same time, most holders own different types of wallets for different uses.
Investment Strategy — a Step to Make Your Savings Grow Faster
Here’s how to develop an investment strategy:
Check your finances. This will check how much you are ready to invest in crypto. Always use only affordable funds instead of trying to trade higher at the beginning. Decide on the goals. What would you like to achieve with your cryptocurrency budget? Understand investment risks. No strategy guarantees profit, and that’s vital to understand. Research investment options. You can hold on to a single currency for a long time or use a more active approach with frequent trades. Build your portfolio. Pick the best coins to acquire at this point based on technical analysis, monitoring the market, and your intuition. Keep track of your investments. Pay regular attention to your assets to ensure the best moment to sell or trade those coins for others.
There’s no unique investment strategy that fits everyone. Instead, adjust it to your goals, risk tolerance, and other factors.
Time to Start Investing in Crypto
We hope that this guide explains the basics of investing in crypto. Don’t hesitate to invest some time into learning how different currencies work and what they offer.
Make sure to pick a reputable exchange and a secure wallet for your digital assets, and then proceed to build your transaction strategy.
Come up with the right portfolio, and don’t forget to make adjustments on the go if necessary.
With the right approach, crypto investing will surely be fun and maybe even profitable!
Also Read: Types of Crypto