How does one invest in cryptocurrencies? Would it be like investing in other stocks (say Google, Microsoft), or would the investor actually have to install the program on their computer and purchase the cryptocurrency.
The folks who got rich in the California gold rush were the ones who sold supplies to the prospectors. If you really believe cryptocurrencies have a significant future, the investment play would be in companies which supply the users.
How does one invest in cryptocurrencies?
It is not a settled principle that dealing in crypto currencies is investment.
Would it be like investing in other stocks (say Google, Microsoft),
No. This is not like regular stock trades.
would the investor actually have to install the program on their computer and purchase the cryptocurrency
Depending on crypto currency, you would need to have some kind of small software / vault installed to store the keys. There are different exchanges that allow you to buy or sell crypto currencies. These are all virtual market places, some reputed others not much ... there is very poor regulatory framework for these exchanges. In past such market places have gone down without much recourse.
Crypto currencies are more a speculative gamble then an investment. A traditional equities investment like Microsoft is marked by a longer history. It may be that in the future crypto currencies gain enough acceptance to be on par with other currencies like the British pound. The 'Forex' market is built around exchanging one currency for another.
There are a bunch of places where you can buy bitcoins. You can checkout Coinbase. Do not 'invest' any more than you can afford to lose! There have been multiple scandals where bitcoin holders lost the full amount.
I'm holding 1.5 bitcoins myself just to see what it does. It is more for fun than an investment.
While cryptocurrency is new and unusual, there is a similar instrument which is much older more familiar: Gold. Obviously it's not exactly the same, but we can make useful analogies.
How does one invest in gold?
I trust all of these will be self-explanatory by virtue of the fact that gold has captured humanity's imagination since time immemorial. But how does the analogy apply to cryptocurrency?