So…what is ‘cryptocurrency’​?

July 1, 2019

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Should you Start Using Cryptocurrency to Buy goods and Services?

 

Have you ever heard about digital currencies and wondered how they even work? Maybe you have seen friends invest in them, use them as a mode of payment or sell them.

Well, the truth is that cryptocurrency might one be one of the most popular methods of making and receiving payments.

According to Statistica, there are more than 25 million wallets for digital assets created to store cryptocurrency.

 

What is cryptocurrency?

 

Cryptos are a means of exchange with value for anybody who would like to sell or buy products and services. They are like dollars. Instead of using dollars as a means of exchange, you use cryptocurrency. The value of a cryptocurrency is called a coin.

Cryptocurrencies are, therefore, digital currencies not regulated by any centralised financial authority or a governing body. Most businesses are embracing the use of cryptocurrencies like Bitcoin to do transactions.

 

How does cryptocurrency work?

 

Are you thinking about getting started with cryptocurrency but wondering how to start? Understand how cryptocurrency works, and you will know how to get started.

To start using cryptocurrency, you need a wallet. Wallets are virtual banks to store your digital assets like Etherium, Litecoin and Bitcoin, among others.

Different types of wallets store various tokens. For example, if you opt for Bitcoin, you need a Bitcoin wallet.

 

How can you get a wallet?

 

You can create a wallet through a web browser by downloading it on your smartphone. You can also purchase a wallet from an online store. It depends on the type of digital currency that you are going to use. For example, if you use Bitcoin, you need a Bitcoin wallet.

After setting up your wallet, never share your private keys with any person because it’s like your password. When getting a digital wallet, register an exchange that lets you buy, sell or trade cryptocurrencies.

 

Types of digital wallets

 

Online wallets are safe, and the best means of trading. Let’s examine different types of digital wallets.

·      Mobile wallets

Mobile wallets are the ones you can download then install on your mobile device as apps. However, mobile wallets work on Android phones. An excellent example of a mobile wallet is Blockchain mobile wallet.

·      Desktop wallets

Desktop wallets are the ones made by token developers. If you want a desktop Bitcoin wallet, you can get it from Bitcoin.

·      Hardware wallets

Hardware wallets are offline and are safe ways to store your tokens. You should find out tokens they can support as they don’t support all of them. The most popular wallets are Trezor Hardware Wallet and the Ledger Nano S.

·      Online wallets

Different cryptocurrency exchanges offer their online wallets to enable you to receive tokens. However, you should store your tokens offline to avoid losing them through phishing or hacking. Examples of online wallets include myetherwallet.com and coinbase, among others.

·      Paper Wallet

This is an offline method of keeping your Bitcoins. It involves printing the public and private keys of your wallet onto paper. You should construct it properly to avoid hostile users from accessing your tokens.

 

How can you send and receive tokens between different wallets?

 

When you get a wallet, you will receive a unique address. That means that if you plan to trade in different crypto-exchanges, you need different wallets for each exchange. It’s like using different URL or website address.

You can send tokens by copying the address receiving from you then enter it on the recipient’s field to send.

 

What are the most common crypto-exchanges available?

 

Have you ever heard of people taking of Bitfinex, polonex  or coinbase and wondered what they are? Those are different types of crypto-exchanges available.

Let’s examine the most popular exchanges in the market.

·      Bitfinex

Bitfinex is an extensive crypto exchange dealing with the most Bitcoin volume for trade that targets traders in North America. Bitfinex is also based in Hong Kong and offers a variety of coins.

·      Poloniex

Poloniex exchanges a couple of cryptocurrencies and is based in the USA.

·      Coinbase

This is one of the world’s largest Bitcoin exchanges based in the United States. If you choose it, it will allow you to purchase only four cryptocurrencies, which as Ethereum, Bitcoin, Litecoin and Bitcoin cash. Use your credit card to buy it with a weekly limit of $250.

If you want to increase the limit, you should complete the requirements of identity verification.

·      Binance

Binance is widely known because it has an excellent quality user interface, lower fees and is easy to use. It is based in Hong Kong and was launched in 2017. Currently, this platform has opened up to Western parts of the world.

·      Bitrex

Bitrex is popular because it trades over 1300 alternative cryptocurrencies out there. Alternative cryptocurrencies are also known as alt-coins. In this US based exchange, it’s impossible to deposit fiat currency directly. You must buy Ethereum or Bitcoin and transfer them here to trade.

 

Why should you use cryptocurrency?

 

Are you wondering why the use of cryptocurrency is gaining popularity? Here are the reasons why people are using them.

·      It saves money

Sometimes bank charges suck. Processing of credit and debit cards require some fees. But in cryptocurrency, you don’t need banks to verify transactions. This eliminates those fees from your business. You may save 2-5% per transaction.

·      Quick processing of transactions

Sometimes you may have to wait for funds to become available in your bank accounts after trading. In cryptocurrency, you need to wait for a few minutes to process transactions.

·      Privacy protected

In cryptocurrency, you don’t need to preserve any sensitive information like your social security number, investments, name, investments, account balance and other details. Banks need to keep those details.

·      Worldwide currency

If you regularly purchase stuff from other countries, you might enjoy using cryptocurrency because it is used worldwide. Having the fact that foreign transactions cost a lot; cryptocurrency is cheap.

Cryptocurrency is going to be the most popular means of exchange. There is a lot of evidence that cryptocurrency is a popular means of trade around the world.

For example, areas like Russia and Japan are using it. Japan uses Bitcoin while Russia uses Etherium as official currency. Cryptocurrency is going to be a real-world solution for trading without restrictions.

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