Investments in cryptocurrency- this is a good way to earn money. In 2017, the popularity of cryptocoins increased sharply against the backdrop of intense growth and interest in them from investors. Those who invested money in cryptocurrency managed to make good money. The value and popularity of virtual coins will continue to grow, and blockchain technology will spread and be implemented in many sectors of the economy. Therefore, we will consider the question of how and in which cryptocurrencies you need to invest and whether it is worth doing it at the moment.

Everyone has heard about Bitcoin and Ethereum, but they don’t realize that there are an order of magnitude more virtual coins. As of November 21, 2017, 1315 cryptocurrencies were presented. The capitalization of 30% of them does not reach 1000 US dollars.

How you can invest in cryptocurrency and earn income:

• “Investor” or “HODL” strategy: buy and wait for the coin’s value to increase in the future.
• Strategy "Trader": trade and make money on exchange rate changes.
• Participate in ICO, IEO, buying new cryptocurrency - tokens.
• Invest in the purchase of mining equipment and start mining crypto coins. A less expensive option is to use services.

Which cryptocurrencies to invest in? We believe that the value of the main coins will continue to grow, and therefore it is possible to create an investment portfolio from them. Don’t forget about new cryptocurrencies; you need to follow projects conducting ICOs and not miss the most successful ones. If the plans are successfully implemented, the token can bring a profitability of several hundred percent.

List of exchanges for working with cryptocurrency:

1. EXMO.
2. Localbitcoins.
3. Binance.
4. Livecoin.

1. Bitcoin (BTC).
2. Ethereum (ETH).
3. Bitcoin Cash (BCH).
4. Ripple (XRP).
5. Dash.
6. Litecoin.
7. IOTO (MIOTA).
8. Monero (XMR).

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A bad investor is one who does not dream of making a million. And to do this, you should wisely select investment instruments. In recent years, investment in cryptocurrency has become a popular topic. Token prices excite minds. Take for example - its value at the beginning of 2017 barely reached a thousand dollars; by the end of the year, 1 BTC broke all records, exceeding 19 thousand USD.

Why is it profitable to invest in cryptocurrency?

It's trendy, it's hype, it has great potential. To answer the question “Why is investing in cryptocurrency profitable?” maybe for a long time. Even housewives are already trying to make money.

When tokens were rapidly rising in price at the end of November, exchanges simply could not withstand the influx of visitors and experienced disruptions.

Many are inspired by the examples of those who bought coins on the cheap, and today already have a fortune amounting to millions. Traders are attracted by the high volatility of cryptocurrencies - sharp rises and falls in the exchange rate allow them to make good money on price differences.

Here are a couple of examples of changes in the value of tokens over the year:

• Ethereum: December 2016 - 8 USD, end of 2017 - almost 800 USD.
• Litecoin: end of 2016 - 4 USD, December 2017 - 300 USD.
• Monero: December 2016 - 13 USD, December 2017 - 390 USD.

However, we will neither encourage you to invest in cryptocurrencies nor discourage you from doing so. We will try to impartially consider from all sides the opportunities that investments in cryptocurrencies promise and the risks that they pose.

4 areas of investment

There are different ways to invest in cryptocurrency. Everyone finds a way to their liking.

To tokens

• short-term trading;
• long-term trading;
• purchase and storage.

The easiest way is to buy and store coins. You buy cryptocurrency at a low price and forget about it for at least a couple of years. An example is Bitcoin. Those who purchased BTC for a few hundred dollars can now sell them for thousands of dollars. What can we say about those who purchased tokens at the very beginning for literally cents - today their profits amount to millions.

What to look for when choosing coins:

• market capitalization;
• dynamics of price changes;
• whether the system is based on an idea useful to society.

To purchase cryptocurrency, we use exchange services or specialized exchanges. The second option is suitable for short-term as well as long-term trading. However, here you will have to work hard. To make money on the difference in rates, you need to be able to analyze the market and constantly monitor the latest events.

Into mining

• purchase of equipment and independent mining or in pools;
• cloud mining.

Investing in cryptocurrency mining has recently been a very popular way to invest money. At one time, it was impossible to even purchase a video card for ordinary needs, since miners had cleared out all the stores’ stocks.

Today, with the growing complexity of token mining, this activity no longer brings the expected income. Mining on a home computer is simply not profitable; more money will be spent on paying electricity bills.

To purchase specialized equipment and create a mining farm with acceptable power, investments of several thousand dollars will be required. The payback on such investments will take at least a year and a half.

If you don’t have a lot of money, but still want to try your hand at mining coins, you should pay attention to. The principle of this approach is simple. You rent from large companies the amount of mining capacity you need. The equipment mines on the side, and coins drop into your account.

In the development of mining equipment

This method is suitable for large investors, since amounts in this area start from 6-figure sums. And not every manufacturer will allow the possibility of outside investment.

In the development of new projects based on blockchain

ICO is an extremely popular way to raise money for a project today. The idea is simple - a startup, which is often only at the idea stage, issues its own coins and conducts the so-called initial coin offering (ICO). Investors who believe in the project invest money in these coins.

If the startup succeeds in the future, token owners can count on high profits, since the purchased coins will rise in price. They also often receive other additional bonuses in the system.

However, the risks in this area are also high. Many startups turn out to be outright fraudulent. There are also those whose team simply did not have enough experience to implement their plans. In all these situations, investors naturally lose their investments. Therefore, it is impossible to do without a preliminary qualitative analysis of the ICO.

Investing in cryptocurrencies - quick start step by step

It is often difficult for beginners to figure out how to invest in cryptocurrency and what first steps to take, so we will analyze the whole process step by step.

Choose the appropriate option

Mining, trading on the stock exchange, investing in ICO - see which method is best for you. Much still depends on the available funds that you plan to invest.

Since cryptocurrencies are a high-risk instrument, invest only free money that you don’t mind losing. Under no circumstances should they be borrowed or set aside for important purchases.

If the budget is minimal, it is unlikely that you will be able to start mining, creating a powerful farm from specialized equipment or investing in Bitcoin. Perhaps you should analyze the altcoin market and buy promising tokens, or try your hand at cloud mining. Those who do not have any free money at all should start with cryptocurrency faucets.

Analyzing the situation

After we have chosen the area of ​​investment, we analyze the market. You should immediately be prepared for the fact that you will have to constantly analyze the situation if you plan to make serious money in this area.

The basic principles of how the crypto market works, and then an in-depth study of all the nuances of its functioning, news, analytical materials - without all of this, it is unlikely that you will be able to remain in the black for a long time. If you are going to trade on the stock exchange, study the platform ratings and trading strategies.

Without careful analysis, you should not even start investing money.

Let's get a wallet

When working with cryptocurrencies, you will in any case need a cryptocurrency wallet. There are different options on the market: online or desktop wallets, applications for installation on mobile devices and hardware ones. The latter are great for long-term storage of tokens.

We purchase tokens

You can buy bitcoins or other currencies using exchange services or on specialized exchanges. Before purchasing tokens, it is important to familiarize yourself with the terms of the trading platform - methods of depositing and withdrawing funds, the amount of commissions. The most famous exchanges:

• EXMO;
• Kraken;
• Bittrex;
• Bitfinex;
• Poloniex.

There is no need to store tokens on exchange accounts for a long time - withdraw them to your personal wallets. The number of hacks of cryptocurrency platforms is growing every day. Also, with rare exceptions, coins can be mined. As for ICOs, coins are purchased directly on the project site.

Risks of investing money in tokens

It is not for nothing that investing in cryptocurrencies is considered the most risky way to increase capital. The likelihood of ending up broke here is extremely high.

One of the main dangers is theft of funds. Hacker attacks on exchanges, mining pools or wallets have already become commonplace. As a result, individual sites are forced to declare bankruptcy. If users get their money back, it is often not in full.

Let’s take such a fact as the ambiguous attitude of regulators towards cryptocurrencies. So far, Bitcoin is only recognized as legal tender in Japan. In many other countries, cryptocurrency could be completely banned at any time. And even if it is not prohibited, then it is not even clear how to pay taxes on it, for example, if this is your main type of income.

There are already cases where banks or well-known payment systems, for example, Western Union, block accounts or individual transactions if they discover that money is being transferred to cryptocurrency exchanges.

High volatility is also worth noting separately. In cryptocurrency trading, pumps and dumps are a frequent occurrence, since this area is not regulated by states. Speculators negotiate among themselves and artificially drive the price up or down. Some crypto exchanges are already beginning to combat this phenomenon on their own.

Sometimes it takes nerves of steel to survive a token rally, when the price soars sharply in one day and then dives down no less steeply. Many inexperienced investors panic and begin to dump coins in order to save at least some of their money.

In fact, it often turns out that the only thing that needed to be done was to wait it out.

Benefits of Crypto Investments

Let's briefly go through the advantages of investing money in digital currencies:

• You can start earning money with a small starting capital.
• Cryptocurrencies are at the beginning of their development and you can still jump on the train that is gaining speed.
• Cryptocurrencies are based on technologies that can completely change the world as we know it.
• Cryptocurrencies have already shown impressive growth in coin value. At the beginning of the article, we gave several examples of the dynamics of price changes.

Best cryptocurrencies to invest in

Which cryptocurrency to invest in is something everyone decides for themselves based on certain criteria. Experts advise first of all to pay attention to tokens from the top 10 by capitalization. Let's look at the top five of the rating.

Bitcoin is the clear leader in the world of digital currencies and, it seems, is not going to give up the palm. It consistently breaks all price records despite numerous pessimistic forecasts. Today it is trading at a price of more than 17 thousand dollars per coin.

Ether- has been confidently holding second place for several months now. The platform, operating on the basis of smart contracts, allows you to create decentralized applications. The cost of one token is currently about $700.

Bitcoin Cash- Bitcoin fork. It separated from the main network and took on a life of its own in August of this year. The value is an order of magnitude lower than its ancestor - one coin is traded at $1,800.

Ripple- on the wave of positive news, Bitcoin Cash periodically pushes Bitcoin Cash out of third place, but then rolls back to its usual 4th position in the ranking. Ripple actively interacts with banking institutions around the world. Integration of its network with existing payment systems makes it possible to speed up payments by an order of magnitude and reduce transaction costs.

Litecoin- confidently closes the top five digital currencies. It was one of the first cryptocurrencies created as an alternative to Bitcoin. It operates on the basis of similar algorithms, but at the same time, payments on the Litecoin network are carried out faster.

Other tokens that are attractive for investment are:

• Monero is a cryptocurrency in which transactions are characterized by maximum anonymity;
• IOTA is a token developed for the so-called Internet of Things. In other words, for smart devices connected to the Internet that independently solve everyday problems.
• Golem is a system based on the original idea of ​​renting out computing power.
• NEM is a platform that positions itself as a “New Economic Movement”. Large banks from different countries have already become interested in the technology of the system. With its help, you can not only conduct transactions, but also create new assets and transmit messages.

Investments in cryptocurrency - reviews and prospects

You won’t find a clear opinion on the Internet regarding investing in cryptocurrency. Views on the world of digital coins sometimes differ completely radically.

Statements that cryptocurrencies are a bubble that will burst at any moment have been heard frequently lately. Cryptocurrencies are often compared to gambling. At the same time, many sincerely believe that Bitcoin will cost at least 100, or even 500 thousand dollars per token in the coming years. And all this is not even said by ordinary users, but by famous bankers, large investors who manage millions, or even billions of dollars.

For example, Jordan Belfort, a well-known former one of the most successful stock brokers, whose life events formed the basis of the film “The Wolf of Wall Street,” considers Bitcoin a colossal scam that is guaranteed to collapse. On the contrary, Israeli Prime Minister Benjamin Netanyahu believes that traditional banking transactions can eventually be replaced by Bitcoin transactions.

Time will tell who turns out to be right. Today, the capitalization of cryptocurrencies has already exceeded 600 billion dollars, of which almost half is Bitcoin. Entire fortunes are earned from cryptocurrencies, using different options: both in mining or exchange trading, and in the classic purchase and further long-term storage of coins.

According to recent research, about $2 billion was invested in specialized hedge funds that focus on cryptocurrencies in 2017. Next year, analysts predict that even central banks of the world’s leading countries will begin to invest in tokens.

During 2017, cryptocurrencies experienced several waves of active growth, as a result of which their value increased tenfold. The market, tiny by the standards of financial institutions, attracted the attention of corporations, central banks and millions of private users. Cryptocurrencies have become a promising long-term investment tool. To determine an effective investment strategy, you should study the market dynamics in more detail in 2017.

Features of the cryptocurrency market

One of the main features of the cryptocurrency market is the initially low cost of many assets. Conventional instruments, such as corporate shares or precious metals, lend themselves to traditional valuation methods and are understandable to most investors. Blockchain is a relatively new phenomenon that is at the beginning of its development. The growth of Bitcoin and other cryptocurrencies occurs at a relatively low base value, which is why the return on investment can reach several hundred and even thousands of percent per annum.

The main danger of cryptocurrencies lies in the absence of formal evaluation methods. The market often turns out to be “overheated” due to a sharp increase in interest in virtual coins in certain countries. Novice investors often seek to buy cryptocurrency “here and now” at the current price, even if it looks unreasonably high. After such sharp surges in demand, the market can experience deep declines, sometimes reaching 70 percent or more.

Despite significant price fluctuations, cryptocurrencies remain one of the most attractive asset categories for investors. It is most likely that in the long term the demand for virtual money will remain consistently high. To better understand the dynamics of market development, it is worth considering specific examples of the growth of cryptocurrencies in 2017.

Cryptocurrency growth in percentage in 2017

For the analysis, we selected currencies that already existed at the time of January 1, 2017, and by the end of December had the largest capitalization. Bitcoin has held the palm in the crypto market for many years, but almost all top altcoins have overtaken it in terms of profitability. All data on the growth of cryptocurrencies in 2017 is summarized in a table.

Name	Price 01/01/2017, $	Price 12/19/2017, $	Profitability ratio
Bitcoin	963	18 851	x19
Ethereum	8,26	793	x96
Ripple	0,0065	0,77	x118
Litecoin	4,37	347	x79
Dash	11,26	1 140	x101
NEM	0,0036	0,81	x225
Monero	13,58	369	x27
NEO	0,144	77,7	x539
Ethereum Classic	1,45	40	x27
Lisk	0,15	16,64	x110
ZCash	48,53	598	x12
Waves	0,244	15,72	x64
Stratis	0,071	12,73	x179
BitShares	0,004	0,44	x110
Ardor	0,01	1,11	x111

Data analysis

At first glance, Bitcoin’s performance looks quite modest: from the above list, in terms of profitability for 2017, it was only able to overtake ZCash. However, you should not take this as a reason to refuse to buy bitcoins. The coin is firmly established as the underlying asset for trading and storing value in the cryptocurrency world, so demand for it will remain consistently high. The first cryptocurrency futures contracts were created specifically for Bitcoin, and there is no doubt that this currency will remain dominant in the world of blockchain.

However, it cannot be denied that altcoins became the main drivers of cryptocurrency growth in 2017. If at the beginning of the year the capitalization of Bitcoin was almost 87% of the value of all coins on the market, then after 12 months this figure dropped to 50%.

The highest growth among coins from the TOP 15 was shown by platforms for creating tokens and applications based on blockchain technology. The pioneer in this field was the distributed virtual machine Ethereum, the rate of which increased 96 times. The growth leader was its Chinese counterpart NEO, whose value increased by more than 500 times.

Currencies created solely for settlements showed less growth. This was probably influenced by the lack of interest on the part of large companies and states: Monero and ZCash coins serve mainly the shadow sector. Litecoin showed higher profitability: in fact, it is a direct analogue of Bitcoin, but supports Segwit transaction acceleration technology.

The Ripple cryptocurrency stands apart. Despite the constant reproaches of the community for insufficient decentralization, it was able to make its way into the corporate segment and showed good growth. Large banking structures, such as Mitsubishi UFG and American Express, announced the start of using Ripple to service their IT infrastructure.

Investments in cryptocurrency 2017: final result

For every $1 invested equally in the 15 listed cryptocurrencies, the investor would receive $121 after one year. It should be noted that 2017 turned out to be an extremely successful year for most coins. The market recovered from the fall of the end of 2013, and money from private investors poured into crypto exchanges in a rapid flow. The positive news background also contributed to the increase in capitalization. The names of large companies investing in the development of blockchain technology began to appear in media reports, and government officials and politicians began to talk seriously about the development of the digital economy.

It is noteworthy that the growth of cryptocurrency was not smooth. Several large waves are clearly visible on the chart of Ethereum and many other altcoins, the most powerful of which occurred in the spring of 2017. Periods of rapid growth are inevitably followed by serious pullbacks - an important pattern that all novice investors should remember. Investments in cryptocurrency today can lead not only to enrichment, but also to the loss of a significant part of the funds in the short term.

Considering the above events, it is not worth projecting a 121-fold increase in cryptocurrencies for 2018. The cryptocurrency market capitalization is $634 billion, while at the beginning of the year it was measured in only hundreds of millions of dollars. In this regard, the coming months may bring a significant correction. Let's figure out how to act in such a situation.

Investments in cryptocurrency 2018: Buy&Hold strategy

If you look closely at the latest chart, it becomes obvious that the cryptocurrency is growing in fairly large and unpredictable leaps. Because of this, short-term traders tend to be at a disadvantage. Forecasting entry points and profit taking will always give a suboptimal result, so that the total profit will be significantly less than the profitability of the market as a whole. In addition, the trader loses money on exchange commissions and risks his own funds, since during active trading it is impossible to store funds in cold wallets. If the exchange closes due to financial problems, the coins could disappear forever, which has already happened with the infamous Mt.Gox.

In such a situation, the best option is long-term investment in cryptocurrency using the Buy&Hold strategy. The strategy is designed for a period from several months to several years, with the most common investment period being 1 – 2 years. The essence of Buy&Hold comes down to purchasing a portfolio of cryptocurrencies and calmly waiting for their value to grow without taking active actions. As a rule, Buy&Hold goals are determined by one of two possible criteria:

• achieving a specific price: for example, buying Ethereum at $800 and selling at $2000;
• time limit: for example, buying Ethereum in December 2017 and selling in December 2018.

Buy&Hold relieves the trader of the need to constantly monitor rates and charts: it is enough to check the data on the website coinmarketcap.com once a day, and if the desired price is reached, sell the cryptocurrency. If the purpose of the sale is determined based on a time limit, the investor may completely “forget” about his purchases before the planned date. The main thing in this case is not to forget passwords and not to lose key files for accessing coins.

In addition, the absence of the need for regular transactions allows you to store cryptocurrency in cold wallets and not be afraid of financial problems on crypto exchanges. The investor becomes the full owner of his coins.

Risk management for a cryptocurrency investor in 2018

During 2017, the total capitalization of cryptocurrencies increased several hundred times. Such growth may indicate both an initial underestimation of blockchain technology and a possible overbought of assets. Despite many optimistic estimates, the factor of a possible fall in 2018 should not be discounted.

To mitigate the risk of a possible fall and get additional profit on subsequent growth, you can divide your capital in a 50/50 ratio and invest only one of these parts in cryptocurrencies. If the growth phase continues, the investor will receive a good profit, and in the event of a deep fall, he will be able to buy additional coins at favorable prices.

Conclusion: Is it worth investing in cryptocurrency in 2018?

Despite certain periods of market declines, cryptocurrencies remain an attractive investment asset. Blockchain technology has attracted interest from large banks, corporations and governments, so in the long term the demand for cryptocurrency will continue to grow. Individual recessions will be compensated by new, more powerful waves of growth. Over the long term, the Buy&Hold strategy will be the most profitable for the investor.

However, you should not overestimate reviews of investments in cryptocurrency in 2017. Every month the market capitalization becomes more and more significant, which is why it gradually slows down its movement. For this reason, you should be smart about setting your investment goals and, if possible, leaving a small cushion of fiat money in case of a deep market correction.

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Artist: Yuri Aratovsky

Over the past months, there have been significant fluctuations in cryptocurrency rates: tens, or even hundreds of percent. This brings up the first question: “Is it necessary to invest in cryptocurrencies if there are such sharp changes in sentiment in the market?” And the second question: “If you invest, then in what cryptocurrencies?”

As for the answer to the first question, it is necessary to analyze the reasons for such sharp fluctuations, despite the fact that the market in February regained some of the losses incurred in January due to such market leaders as BTC, LTC, ETC, DASH and RIPPLE. Coincidentally, these events were simultaneously influenced by several factors.

First, about the negative events that influenced the decline in the value of cryptocurrencies.

1. A key factor of pressure on digital assets is related to the tightening of legal regulation in many countries since the beginning of 2018:

• Finance Minister of India Arun Jaitley stated that the government does not recognize cryptocurrencies as legal tender and will take all possible measures to stop the use of cryptoassets. It should be noted that India accounts for about 10% of the global bitcoin market.
• Earlier, a ban on anonymous transactions with cryptocurrency came into force in South Korea. Now the information of the account holder on the exchange must completely match the information of the bank account owner. Crypto exchanges, in turn, will provide banks with all the information about transactions, which, in theory, will allow the government to introduce appropriate taxation.
• Europol and Interpol announced the development of measures to combat money laundering through cryptocurrencies.
• Leaders of other countries, for example, Japan, spoke in the same vein.

1. Falls and rebounds of global stock markets have recently seriously affected the movement of major digital currencies. On February 2, the American stock market collapsed after record growth in 2017. Key financial indices fell for six trading sessions in a row and lost more than 8%. The panic on Wall Street was transmitted to global investors and led to a collapse in indicators on Asian and European markets. Despite the fact that digital currencies generally live their own lives, their dynamics still depend on the interest of global investors in risky assets.
2. Tighter control over the circulation of digital money has led to the fact that coin mining is becoming less profitable for miners, which also affected the behavior of the crypto market. At the time of Bitcoin’s record rise, the funds received by miners significantly exceeded the costs of electricity and computing power of the farms. Today, the situation has changed: mining new coins requires more and more power to solve increasingly complex problems and increase the number of miners. According to Blockchain.info, on February 5, daily income from cryptocurrency mining in the world fell to $16 million (versus $53 million in December). As noted by a representative of FBG Capital in Singapore Zhou Shuoji, purchasing mining equipment has already become unprofitable.
3. After explosive growth in December 2017, analysts do not rule out the collapse of most cryptocurrencies, similar to the crisis in the market of Internet companies in the early 2000s. The collapse of the bubble may leave only the most innovative and resilient assets alive.

Now about the events that had a positive impact on the recovery of the crypto market.

1. A moderate recovery in rates occurs against the backdrop of statements by US financial authorities, which the cryptocurrency market traditionally focuses on. On Tuesday, February 6, regulation of cryptocurrencies and ICOs was discussed at a hearing in the Senate. During the meeting, a complete ban on transactions with cryptocurrencies on the market was not discussed. Instead, it was proposed to create a regulatory framework to control and support the Bitcoin market and online platforms for the sale of digital coins, which would have a beneficial effect on the value of digital assets. The head of the US Commodity Futures Trading Commission (CFTC) supported the adoption of the relevant bill. J. Christopher Giancarlo and head of the Securities and Exchange Commission (SEC) Jay Clayton.
2. Another factor influencing the growth of the cryptocurrency market was the reduction in the average transaction fee on the Bitcoin network to the lowest level over the past year and a half. According to Bitinfocharts, it is now $0.204, while in December 2017 it reached $34,095. Thus, since December last year the level has decreased by 170 times. High transaction costs when dealing with “digital gold” led to a crisis on the network: many companies refused to accept cryptocurrency, in particular, the gaming service Steam and the payment provider Stripe. One of the reasons for the reduction in commissions was the sharp decline in the number of transactions. Transfers became so expensive for users that they stopped using Bitcoin as a currency. In addition, the reduction in commission was influenced by the introduction of support for SegWit technology and the launch of Lightning transactions. But at the same time, in practice, ordinary Bitcoin users still cannot count on such a low commission, since exchange fees remain significant. For example, Binance’s withdrawal service costs about $10.
3. And finally, the market expects continued growth in the value of digital currencies after its correction in January-February 2018. But these expectations are not yet very confident.

It’s hard to say which trend – decline or growth – will win in the near future. But there are a number of reasons that are more likely to cause growth than decline in the long term:

1. Due to the increasing influx of investment in blockchain technology and the increase in the user base, cryptocurrencies are likely to increase in value.
2. As the cost of transaction fees and volatility decrease, cryptocurrencies will acquire all the properties of a fairly reliable means of payment.
3. Cryptocurrencies based on the Ethereum platform bring the economy to a more advanced level, where the risks of manipulation and deception are sharply reduced, and in return, guaranteed fulfillment of agreed obligations is ensured for all participants.

Which of today's cryptocurrencies will become the next Amazon or Google, and which will eventually turn into meaningless records? Only in the presence of negative factors, even very significant ones - such as an inflated “bubble” - one cannot say that current prices will not be able to rise for a number of currently existing cryptocurrencies. At the same time, it is possible that another part, if not all, will never again soar to current peaks.

If we consider specific cryptocurrencies that will be promising for investment, they must have the following important properties:

1. A promising currency must be based on a very significant asset. For example, the widely known and significant Telegram messenger in 2018, its own blockchain platform Telegram Open Network (TON) and the Gram cryptocurrency. Or, for example, the Israel Diamond Exchange (IDE) announced the creation of its own cryptocurrency backed by diamonds. The diamond digital coin was developed by IDE in collaboration with the high-tech company CARATS.IO. The cryptocurrency is backed by the purchase of diamonds on the Israeli market. At the same time, its indicator, along with other economic indicators, will be displayed on the trading floor of the exchange and on various Internet sites. The new exchange asset will be of two types: Cut - a currency for professional market participants, Carat - for a wider range of investors.
2. It is also very important that the cryptocurrency has all the necessary properties of a means of payment:

• Reliability of transactions and their reasonable cost– payments are made quickly, reliably, safely, and the cost of transactions does not exceed the same cost in the banking system.
• High liquidity– the ability to buy/sell or exchange cryptocurrency for fiat money at any convenient time and anywhere.
• Low volatility– the buyer/seller must be sure that the cryptocurrency will not depreciate or skyrocket within a short period of time.

If we consider the possibility of purchasing a specific cryptocurrency from this angle, then among the most well-known cryptocurrencies you should pay attention to the following.

1. Ethereum(ETH). The ETH cryptocurrency was created as a way to crowdfund the Ethereum project of a Canadian programmer of Russian origin. Vitalik Buterin. Having appeared only in 2016, it has already managed to grow 1,500 times. The creators of the Ethereum project modified blockchain technology with the help of smart contracts, which allowed us to look at the possibilities of crypto not only as a speculative instrument, but also as a useful technological innovation. The main advantage of the Ethereum project is that using smart contract technology it is possible to carry out secure transactions with certain conditions. This technological innovation will maintain ETH capitalization at the proper level for a long time. Financial companies, including VTB and Sberbank banks, Lufthansa and S7 airlines, as well as Microsoft, IBM and Acronis, are showing noticeable interest in the platform.
2. Ripple(XRP). A serious project that began in 2012 and set itself the goal of creating a full-fledged digital monetary system with maximum transaction security. The Ripple protocol provides instant and direct transfer of funds between two parties in any form, and the commission for it is set at a minimum level. Ripple’s clients include more than 100 banks, including such giants as BBVA, Standard Chartered and Bank of America, as well as classical financial market players such as UniCredit, UBS, Western Union and others.

However, it should be noted that Ripple was created by bankers for banks - it is a centralized network. All control levers are in the hands of its creators, which makes XRP buyers dependent on them. Of the 60% of coins issued, only 40% is traded on the market, and the majority is kept by the founders.

1. Dash. This cryptocurrency was a response to the community’s request to create a more reliable system for protecting the personal data of the coin owner than was implemented in Bitcoin. The currency has several specific features that distinguish it from a wide variety of other financial instruments:

• its production is undemanding in terms of energy resources;
• not one, but a group of algorithms is used;
• all users have equal rights and opportunities in the development of this coin.

Dash is used for instant and private payments online and in the real world using secure, open-source software powered by a payment platform supported by thousands of users around the world. Dash is highly anonymous. Transactions on the network are almost impossible to track.

1. IOTA. Unlike previous cryptocurrencies, the creators of IOTA see the key to the development of the crypto-economy in the Internet of things and are mastering the corresponding technologies. The Internet of Things is exactly the industry that will dominate in the near future. The IOTA crypto platform ensures the security of the entire network, as well as high transaction speeds. The IOTA crypto platform offers a unique and promising solution that leaves the classic blockchain behind.

And finally, a group of cryptocurrencies, led by Bitcoin (BTC) and its forks: Bitcoin Cash, Bitcoin Gold, Bitcoin Segwit 2X (B2X), mainly differing in block capacity and the speed of formation of blocks and transactions.

Cryptocurrency Bitcoin(BTC) is known to everyone; There is an influx of new users who are familiar only with this asset, which means that upon entering the cryptocurrency market they will only buy it. Accordingly, the wave of hype pushes the price of Bitcoin up. This is the world's first digital currency, which served as a catalyst for the gold rush that has erupted in recent years around the cryptocurrency market. Bitcoin is archaic because it has a small block size (up to 2 MB), which is not enough for the fast and stable functioning of the network. Bitcoin has a low transaction confirmation speed (can reach several hours, or even days). Bitcoin is not suitable for creating normal smart contracts. Therefore, Bitcoin has a very dim prospects in the long term, but it can be a very profitable investment in the short and - probably - in the medium term.

Bitcoin forks Bitcoin Cash, Bitcoin Gold, Bitcoin Segwit 2 X(B2X) partially offset these disadvantages of classic Bitcoin, but do not overcome them completely.

What to do? To invest or not?

Invest, but subject to the following rules:

• do not invest your last funds;
• invest funds that you don’t mind losing;
• divide the available funds into 8-10 parts, possibly in equal shares if there are no preferences;
• Use these funds to buy 8-10 of the most promising cryptocurrencies, thus forming a portfolio of cryptocurrencies;
• review your portfolio once a quarter unless any significant events occur;
• sooner or later one of the portfolio currencies will definitely “shoot”;
• sell cryptocurrencies when they skyrocket.

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Which cryptocurrency is better to invest in? What are the features of investing in cloud mining? What are the most promising areas for investing in cryptocurrency?

The future that science fiction writers of the last century wrote about has already arrived! Digital currency, which does not belong to any state and is not controlled by anyone, is widely used for non-cash payments and acts as a tool for enrichment for thousands of enterprising and far-sighted Internet users.

Want to join the ranks of successful crypto investors? Then this article is for you!

Denis Kuderin is with you, an expert on financial issues at HeatherBober magazine. I'll tell you why investing in cryptocurrency– this is profitable, promising and correct, which digital currencies are now on the rise, and why cryptocurrency exchanges differ from exchangers.

And you will also find out how to invest in bitcoins, ethers, litecoins and other crypto-money wisely, and why cloud mining is preferable to traditional mining for beginners.

1. Investing in cryptocurrency – make money right

A few years ago, a revolution took place in the digital universe, which the bulk of users simply did not notice. It was a bloodless and quiet revolution - someone named Satoshi Nakamoto (perhaps it was a group of people) created a completely decentralized electronic payment system based blockchain.

A blockchain is a chain of blocks that store information protected by cryptographic encryption. Copies of these chains are simultaneously everywhere and nowhere - on all computers connected to the network. There is no single blockchain storage server, which ensures its security and protects it from outside control.

The currency, which has become a new method of payment on the Internet, was called “bitcoin”. This is the world's first digital money that is not tied to any payment system or bank.

The value of bitcoins has increased thousands of times over the last few years of its existence. Many of those who bought a few hundred dollars worth of Bitcoin on occasion in 2009 are now millionaires.

Bitcoins remain the most popular and expensive cryptocurrency in the world, but they are no longer the only digital money in the world. In recent years, dozens of varieties of new cryptocurrencies have emerged. If you wish, you can create your own digital money - if you find the funds for it (cryptographic encryption is expensive).

But to make money on crypto money, you don’t have to create a new currency. Invest in existing currencies and make money on the growth of their value.

Almost all types of cryptocurrency are growing in price more or less steadily. At least a currency from the TOP 10 - for sure. You just need to buy it at the lowest price and sell it at the highest.

I will list the advantages of cryptocurrency:

• it is transmitted from person to person according to the principlePeer 2Peer– services of banking institutions and payment systems are not needed;
• it is an international means of payment– use it in any country where there is an Internet connection;
• your crypto wallets cannot be controlled– no one has the right to freeze your account or limit the transfer amount;
• low transaction fees– in comparison with commissions of banks and payment systems;
• the value of cryptocurrencies is growing steadily– in 1717 alone, Bitcoin rose in price by 4.5 times, and ether in 4 months the price increased by 295%.

There are several ways to invest in cryptocurrency − direct purchases, exchange trading, investments in mining(cryptocurrency mining). All options are good in their own way, some require large investments, others are available to users with minimal initial capital.

It is necessary to talk about the disadvantages of cryptocurrency, since they exist. This money is not recognized by government agencies, including the Russian government. The lack of centralized control is an absolute plus, but this also means that you perform all transactions with bitcoins and other “coins” at your own peril and risk.

Another disadvantage that often turns into an advantage for a speculator is high volatility of cryptocurrency. The course changes every day. Inexperienced investors often panic and begin to drain capital when there is even a slight downward trend.

Cryptocurrency is characterized by frequent ups and downs in exchange rate

Economists and financial commentators are urging caution in dealing with crypto money. Some people talk about a bubble that is inflated and inflated, but at one fine moment it can burst with a deafening effect.

Fortunately, this has not yet happened, which allows thousands of people to earn fortunes on Bitcoin, Litecoin and Ether. If they can do it, it will definitely work for us! Go ahead!

2. 4 popular ways to invest in cryptocurrency

The simplest investment option is suitable for those who have initial capital. You just need buy cryptocurrency with this money and forget about it for a while. The method is promising, but too long. If you have little money, your earnings will be modest.

There are more profitable options - let's study them.

Method 1. Buying or exchanging cryptocurrency through exchange offices

There are many exchange offices operating on the network that operate on the principle of street exchangers, only they have wider functionality and more currency pairs for exchange.

Here they exchange not only rubles for dollars and euros, but also the currencies of various payment systems such as YandexMoney, Qiwi, WebMoney. They also exchange cryptocurrency here. Not all of them, but only the most popular and popular varieties.

How to earn money? Look for the best rate, buy cheaper, and then sell at a higher price.

Method 4. Investment in cloud mining

Equipment for full-fledged (classic) mining costs a lot of money. It’s not enough to find funds to buy expensive video cards, power supplies and other hardware; you also need to be able to connect and configure it all. Experts say that such a farm will pay for itself in 1-1.5 years at best.

But there is an alternative - cloud mining. Let me explain what this is with an example.

Imagine that you are mining diamonds alone. You need a drill to drill into a diamond vein, you need equipment to get down into the mine safely, and tools to extract the diamonds. This will be classic mining - the extraction of cryptocurrency using an artisanal method.

Cloud mining is industrial mining. You do not work alone, but become one of the investors in an entire mining company. This enterprise has professional equipment, and the efficiency is hundreds and thousands of times higher.

Yours income in this area is proportional to the invested funds, and the extraction itself is carried out automatically or semi-automatically.

3. The most promising areas for investment - 7 cryptocurrencies that earn money

I present an overview of the 7 most promising cryptocurrencies at the time of writing.

This digital money is steadily growing in price and is not going to fall.

1) Bitcoin

The first cryptocurrency on the planet. More and more online stores and companies accept BTC as payment for goods and services. This money is used to buy air tickets, cars, and book hotel rooms.

Bitcoins, like many other cryptographic currencies, have a limited supply. It's like gold - it is becoming more and more difficult to extract it, and reserves are becoming less and less. This is partly why we have seen a steady increase in the BTK rate over the past few years.

2) Ethereum

Cryptocurrency Ethereum or broadcast takes 2nd place in popularity. The currency appeared in 2015 and almost immediately after its launch began to steadily grow in value. Experts consider Ethereum to be the only worthy replacement for Bitcoin at the moment.

The authors of this cryptocurrency do not limit its role exclusively to payments. The creators propose using ethers as a means of exchanging resources or to protect transactions in the format of so-called “smart contracts”.

3) Litecoin

Litecoin is the name of not only the cryptocurrency itself, but also the peer-to-peer network that underlies it. 1 LTC costs much less than Bitcoin, but for an investor this is more of a plus than a minus - you can enter the market with a small initial amount.

4) Monero

It is considered the safest cryptocurrency. The developers made user privacy their top priority, and they succeeded. In terms of capitalization level, Monero is confidently in the TOP 10.

5) Dash

In the slang of stock traders - “dashka”. Currency created in 2014. Unlike BTK, Dash encryption operations use not one, but two different algorithms, but mining also requires much less energy.

6) Ripple

Ripple was originally a project resembling a decentralized global exchange for trading cryptocurrencies and other goods. Then it was necessary to introduce an internal means of payment - it was also called Ripple. As of 2017, this digital money occupy 3rd place in terms of capitalization.

7) Siacoin

It is both a cheap, fast and reliable peer-to-peer network and a currency with excellent capitalization prospects.

4. How to invest in cryptocurrency - a step-by-step guide for beginners

The process of investing in money that no bank in the world supports deserves a thoughtful and professional approach.

Expert instructions will help you avoid the main mistakes of beginners.

Stage 1. Choosing an investment method

Choose a method depending on your budget and the time you want to spend on making a profit. I’ll say right away that exchange and mining are long-term and risky options s that require preparation.

For those whose initial capital amount is close to zero, I recommend trying their luck at. You don’t need to invest anything there at all - you will only waste your time.

Stage 2. Creating and replenishing an electronic wallet

In addition to a Bitcoin wallet, intermediate places for storing reserve funds may be useful - YandexMoney, Qiwi, etc.

Stage 3. Buying bitcoins or other cryptocurrency

We buy BTC or other digital money on a stock exchange, exchanger or forum. Or we extract them using mining and store them in the account.

Bitcoin wallet example

It happens that a profitable deal comes your way already on the first day of trading on the exchange - someone sells or buys crypto money at a rate that is favorable to you. If you are willing to take risks, there is a chance to get rich by several thousand rubles at once.

Stage 4. Analysis of the market situation

Oddly enough, one of the most profitable stock exchange strategies is not buying/selling and speculation, but calm waiting.

If you are willing to wait several months, six months, a year, you have every chance of increasing your capital by doubling, quadrupling, or even 10-fold. This already happened in 17 - some cryptocurrencies increased in price by 100-400%.

Stage 5. Selling cryptocurrency and withdrawing funds

Converting digital money into real money is also a critical stage of the process. I again recommend using exchanger monitoring for this. If you operate with large sums, then finding an exchange office with the best rate will save you tens of thousands of rubles.

5. Where can you get cryptocurrency - review of the TOP 3 exchanges

Each exchange your own trading conditions, your own rate, your own commission for input and output. Some resources have a Russian-language interface, others require basic knowledge of English.

It is important to understand that the exchange itself does not sell or buy anything - it is only a platform for secure transactions between users.

1) EXMO

A popular platform on the RuNet that provides everyone with access to cryptocurrency transactions 24/7. Intuitive interface, convenient functionality, always available support service. More than a quarter of a million users, all popular cryptocurrencies available.

I myself used the services of this exchange, deposited and withdrew bitcoins from it, and chatted with operators.

An old-timer among cryptocurrency exchange platforms, one of the first exchanges working with bitcoins. Year founded: 2011, location: San Francisco, California.

At the time of writing, 57 currency pairs are traded here. Commissions depend on transaction volumes and the time the user spent on the exchange.

A promising exchange that is gaining popularity around the world. Founded in 2014, supports 100 currency pairs for exchange. Almost all known cryptocurrencies on the planet are represented here, including even those that are less than a year old. The interface is English, but the basic principles of operation are intuitive.

Exchange comparison table:

6. 3 golden rules for the novice investor

And finally, a few simple but useful rules that beginners should never forget about.