Although cryptocurrency is unregulated in India, that does not make it unlawful. On the taxes front, the Income Tax Department has clarity as the government plans how to regulate it. But, surprisingly, this lack of transparency hasn't kept individuals, especially millennials, from hopping on the cryptocurrency bandwagon. Despite cryptocurrency's meteoric rise in popularity over the past several years, some buyers and investors may be mystified by the hype. Moreover, when using one's home country's currency is perfectly adequate for most transactions, one would wonder why they would ever consider buying bitcoin.
Which cryptocurrency should you choose to invest in?
It's essential to do your homework before diving into a cryptocurrency investment. Use the following steps to investigate a new cryptocurrency that may catch your eye:
Read the white paper first to get an overview of the project's technologies and goals. Learn more about the initiative by reading published studies. Investigate the cryptocurrency's backers to ensure they are experienced business people who can be relied upon.
Examine the "tokeomics" of virtual money.
Verify the cryptocurrency forum for more information. Examine market elements by researching stock prices, trading activity, and market cap. Investors can evaluate whether or not a cryptocurrency belongs in their portfolio if they have a firm grasp of its technology.
Before the crypto swap, here are some things to think about
1. Cryptocurrency wallets
Before transmitting a new coin, check that your wallet can handle it. Some ERC20 tokens may have a difficult time transitioning to their native protocols.
2. Consider both liquidity and slippage when evaluating your options.
When a trade is closed at a price that differs from the one at which it was opened, slippage has occurred. Slippage in some works is unavoidable due to the irrationality of the bitcoin market. Slippage limitations are in effect on some platforms, and transactions will not be allowed to go through if slippage surpasses a certain threshold.
3. Use Two-Factor Authentication
Using two-factor authentication is another layer of defence for your cryptocurrency portfolio. Two-factor authentication (sometimes called "two-step verification") is an added security measure that calls for more than one means of proving your identity before granting you access to a resource. Online banking is a good example; after entering your password, most services will send a verification number to your mobile device. Since they'd need both pieces of information to break into your account, it is considerably more secure.
Similarly, several cryptocurrency wallets offer two-factor authentication further to bolster the safety of their users' holdings. It implies that if someone were to steal your private keys, they still wouldn't be able to access your account without having the second piece of information (usually a code sent to your phone).
Final Words
Binocs works with many of the most popular cryptocurrency wallets so that you can see all your crypto transactions in one place. For the best choice, only Binocs ready, availing the best tax software in India. So put your money into cryptocurrency today, and you might reap the rewards later.
