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Cryptocurrency for beginnersPublished On
Cryptocurrency is a type of digital currency that generally only exits electronically. There is no physical coin or bill unless you use a service that allows you to cash in cryptocurrency for a physical token. Many cryptocurrencies are decentralized networks based on blockchain technology. Blockchain is a decentralized technology spread across many computers that manage and record transactions. The legal status of cryptocurrencies varies substantially from country to country and is still undefined or changing in many of them. Bitcoin is the most popular cryptocurrency.
Can I invest in cryptocurrencies?
Unlike the stock market, there are some risks involved while investing in crypto. Its values may or may not go up but many investors see them as a valuable financial investments. However digital currencies are also some of the hottest commodities. Many people consider crypto as the future currency. Before investing, learn about cryptocurrency exchanges. These platforms provide the means to buy and sell digital currencies, but there are 500 exchanges to choose from. Also cryptocurrencies are not insured by the government unlike any other currencies. So no guarantee on the investment or returns.
How to buy Crypto ?
Anyone can buy cryptocurrency through an online exchange platform. Some people earn cryptocurrency through a process called “mining,” which requires advanced computer equipment. Now developers have designed an app, where any people can download the mobile app and start mining on their own without any charges. Some cryptocurrencies, including Bitcoin, are available for purchase with U.S. dollars, while others require to pay with bitcoins or another cryptocurrency. To buy cryptocurrencies, you’ll need a “wallet,” an online app that can hold your currency. Generally, you create an account on an exchange, and then you can transfer real money to buy cryptocurrencies such as Bitcoin or Ethereum. Coinbase is one of the most popular trading exchange, where you can buy or sell any type of cryptocurrencies.
In order to buy or trade cryptocurrency, you need to have a wallet address, so that the digital currency will be transferred under your control. This wallet keeps a secret information, called a private key or a seed, which is used to validate transactions so that your cryptocurrency can be used to make purchases or exchanged for another asset. This key prevents someone else from using your's or the transaction being altered by a third-party. Wallet can hold multiple cryptocurrencies. The most popular wallet is Metamask, Coinbase, etc...
How to store the crypto ?
Crypto's can be stored in two kinds of digital wallets :
- Hot wallet - transactions generally are faster, crypto is stored by a trusted exchange or provider in the cloud and accessed through an app or computer browser on the internet. Any trading exchange you join will offer a free crypto hot wallet where your purchases will automatically be stored. But many users prefer to transfer and store their crypto with a third-party hot wallet provider, also typically free to download and use. Like - Coinbase, Electrum, Blockchain, Mycelium.
- Cold wallet - often incorporates extra security steps that help to keep your assets safe but also take longer. A cold wallet is a small, encrypted portable device that allows you to download and carry your crypto. Cold wallets can cost as much as $100 but are considered much more secure than hot wallets. Like -Trezor Ledger, Nano.
How to use cryptocurrency ?
People use cryptocurrency for quick payments, to avoid transaction fees that regular banks charge, or because it offers some anonymity. Others hold cryptocurrency as an investment, hoping the value goes up. Unlike credit/debit card, crypto payment is not legally protected.