Introduction to the Digital Money World: From Bitcoin to Ethereum - What You Need to Know

What Is Cryptocurrency and Why Is It Important?

Have you ever dreamed of a global payment system that isn’t limited by national borders or different currencies? Digital currency — also known as (Cryptocurrencies) — is the answer to those desires. It is a type of digital asset secured by cryptography, stored in a digital wallet, and transferable between individuals without intermediaries like banks.

The main benefits of digital currency are security and independence. When you store money in a digital wallet, it doesn’t just exist on a single device but is distributed across a global network of computers. This means that even if you lose your phone, you can still recover your assets. You don’t have to worry about theft or loss like traditional cash.

Currently, the world of cryptocurrencies has over 5,000 different types of coins. Among them, Bitcoin is the most famous and valuable, while others are collectively called Altcoins (alternative coins).

Bitcoin and Altcoin: The Fundamental Difference

Bitcoin appeared in 2009 as a revolution in the financial world. It is the first and most widely used cryptocurrency globally. With a current market capitalization of about $1.77 trillion USD, Bitcoin remains the market leader.

Following Bitcoin’s success, other developers created new cryptocurrencies based on similar technology but with their own improvements. These are called Altcoins. Typical examples include Ethereum (ETH) with a market cap of $358.69 billion USD, Ripple (XRP) with $113.70 billion USD, or Litecoin (LTC) with $5.92 billion USD.

Although Altcoins are considered upgraded versions, so far none have surpassed Bitcoin in value and reliability. Bitcoin remains the top choice for long-term value storage, similar to gold in traditional finance.

Why Invest in Cryptocurrency?

If you see the cryptocurrency world as a miniature financial market, then Bitcoin acts like gold, while Altcoins function like stocks. That’s why many investors are interested in Altcoins.

High profit potential: Altcoins often have large short-term price swings. For example, some coins increased 10-20 times during the boom in 2017-2018. With volatility of 20-40% within 1-2 weeks, you have the chance to generate quick profits, which is hard to find in traditional stock markets.

Technology is the future: If you believe in the power of Blockchain technology, investing in cryptocurrencies is a way to participate in the future. The increasing acceptance by governments and businesses is also a positive signal.

Continuous development: According to statistics from Q2/2020, the trading volume of cryptocurrency derivatives on exchanges increased by over 165% compared to the same period last year, demonstrating a more vibrant market and growing investor confidence in digital assets.

Two Cryptocurrency Investment Strategies: Hold Vs Trade

Hold Coin - Long-Term Strategy

Hold coin means buying cryptocurrencies and holding them for the long term, hoping their value will increase over time. This is similar to investing in gold or real estate — you believe in the long-term potential of the asset.

Advantages:

• Lower risk because you don’t need to constantly monitor fluctuations
• Fewer transaction fees
• Suitable for calm, patient investors

Disadvantages:

• Usually requires a larger initial capital
• Need to thoroughly understand the technology behind the project
• Long wait to see profits

Trade Coin - Short-Term Strategy

Trade coin involves derivative trading of cryptocurrencies, where you predict short-term price increases/decreases without actually owning the coins. You use (leverage) to amplify profits or risks.

Advantages:

• Low initial capital thanks to leverage
• Ability to quickly profit from price volatility
• High liquidity, easy to buy and sell
• Just a 1% increase in Bitcoin can yield 5-10% profit with leverage

Disadvantages:

• Risk of losing all capital in a single trade
• Requires frequent market monitoring
• Susceptible to market manipulation due to smaller market caps of Altcoins

Recommended Altcoins for Beginners

If you’re a new investor looking to limit risks, here are three reputable and promising coins:

Bitcoin Cash (BCH) - Current price: $604.89, up 3.07% in 24h. A Bitcoin variant with improvements in payment capabilities.

Ethereum (ETH) - Current price: $2.97K, up 1.61% in 24h. The leading smart contract platform with a market cap of $358.69 billion USD.

Litecoin (LTC) - Current price: $77.27, up 0.94% in 24h. Often called the “gold of cryptocurrencies” with a market cap of $5.92 billion USD.

Additionally, XRP (Ripple), priced at $1.88 with a market cap of $113.70 billion USD, is also a good option for diversifying your portfolio.

Should You Start Investing Now?

The answer is: It depends on your financial situation.

You should start investing in cryptocurrencies if:

• You are debt-free
• You have an emergency fund covering 3-6 months of living expenses
• You have invested 15% of your income in traditional tools like stocks
• You still have extra money to experiment

If you love technology and trust in Blockchain’s future, don’t hesitate — start with small amounts to learn the process.

Steps to Start Trading Cryptocurrency

To begin your cryptocurrency investment journey, follow these three basic steps:

Step 1: Choose a Reputable Exchange Selecting a secure trading platform is the most important. A reputable exchange will protect you from risks like contract failures or scams. Gate.io is a trusted choice supporting major cryptocurrencies.

Step 2: Deposit Margin Funds After creating an account, deposit initial capital according to your capacity and trading strategy. For derivatives trading, you can start with small funds thanks to leverage.

Step 3: Make Your First Trade Once your account has funds, place buy or sell orders. Based on your market prediction, choose Long (predict rise) or Short (predict fall). Execute orders via mobile app or web version.

Conclusion

The cryptocurrency world is opening new opportunities for investors. Whether you choose long-term hold or short-term trading, understanding risks and having a clear plan are crucial. Bitcoin, Ethereum, Litecoin, and other Altcoins each have their own potential — the key is selecting a strategy that matches your personality and financial goals.