Firstly, What is Cryptocurrency?
Here’s the definition of Cryptocurrency:
Cryptocurrency, is sometimes called crypto-currency or crypto is the form of digital and virtual currency that uses cryptography to secure transactions. Cryptocurrency is not controlled by any government and financial department.
What is cryptocurrency?
Cryptocurrency is a form of digital payment that does not depends upon any bank to apply transactions. It is very easy way and system that enables anyone anywhere to send and receive payments. When you receive and transfer funds in form of cryptocurrency the transaction’s history is recorded in a public ledger. Cryptocurrency is stored in digital wallets. Cryptocurrency received this name because it uses encryption to verify. The encryption is used to provide security and safety to funds and transactions.
First cryptocurrency:
“Bitcoin” was the first cryptocurrency that was founded in 2009 and is known best today.
What is working procedure of cryptocurrency?
Cryptocurrency works on a public ledger called “Blockchain”. All records of transactions, is stored by currency holders. The process through which units of cryptocurrency are created called “mining”. That uses computer power to solve complex and complicated mathematical problems that helps in generating coins. If users, want they can buy currencies also from brokers, and can also store them and can spend them by using cryptographic wallets. If you have, cryptocurrency you don’t need anything else. The thing that you have is a key that helps to transfer a record and unit of measure from person to another person and one place to another place without a third party involved.
Examples of Cryptocurrency:
Bitcoin:
Bitcoin is founded in 2009, Bitcoin was first cryptocurrency and it is being used still most commonly. This currency was first developed by Satoshi Nakamoto- widely believed to be a pen-name for individuals or many groups of people whose alias identity remains unknown.
Ethereum:
This type of cryptocurrency was developed in 2015, this is a blockchain platform with own cryptocurrency, that is called Ether (ETH) or Ethereum. This type of cryptocurrency is also very popular after Bitcoin.
Litecoin:
This type of cryptocurrency is very similar to bitcoin but it is moved very quickly to develop to new innovations, It, includes very fast payments and faster processes to allow large number of transactions.
Ripple:
Ripple is also a type of cryptocurrency. It is a distributed ledger system and it was founded in 2012. Ripple is used to track different kind of transactions, not only cryptocurrency. At the behind it has worked with many banks and financial organizations.
The cryptocurrencies that are, non-Bitcoin are collectively known as “Altcoin” to make them different from the original.
How to buy Cryptocurrency?
You may be doubting how to buy cryptocurrencies safely. There are basically three steps that are involved in buying cryptocurrencies safely. These are following:
Step1: Choosing a platform:
This first step is in which you decide which platform is best for buying cryptocurrencies. Traditionally, you can choose between a traditional broker and dedicated cryptocurrency exchange:
Traditional Brokers: These are the online brokers that offers different ways to buy and exchange and sell cryptocurrency, as well as other financial assets like stocks. Bonds and ETFs. These platforms are popular to offer lower trading costs but fewer crypto features.
Cryptocurrency exchange: There are cryptocurrency exchanges to choose from, with in each offering different types of cryptocurrencies, wallet storage and many more.
When choosing platforms to exchange compare different platforms, what fees they charge, their security features, storage and withdrawal features and other resources.
Step 2: Funding your account:
When you have chosen your platform for buying cryptocurrency, after this the second step is to fund your account so you can start trading. Crypto exchanges that are done with the help of debit card or credit card are thoughtful risky, and many of exchanges do not support them. Some credit card companies also don’t allow crypto transactions. The reason for this is cryptocurrencies are very unstable. Another important point to thought about it is fees.
Step 3: Placing an order:
The third step is placing an order. You can order with the help of broker’s, exchange’s web and by mobile platform. If you want to buy cryptocurrencies you can do this by selecting buy, choosing order type, entering the amount, of currencies that you to want to purchase. In addition, there are many more investing vehicles:
Bitcoin trusts: If you want you can purchase shares of Bitcoin trusts with a brokerage account.
Bitcoin mutual funds: There are also Bitcoin ETFs and Bitcoin mutual funds from where you can choose.
Tips to invest in cryptocurrencies safely:
According to customer reports, all investments are very risky, but according to some experts thought that cryptocurrencies to be one of the riskiest, investments choices out there.
Research exchanges:
Before investing you have to learn about cryptocurrency exchanges. It is estimated that there are over 500 exchanges to choose from them. Do your complete research, read all reviews and discuss with more experienced investors before moving forward to invest.
Know how to store your digital currency:
If you have purchased cryptocurrency, you have to know about how to store it. You can store it on a digital wallet. While there are more types of wallets, with their own benefits, technical requirements and security.
Diversify your investments: Diversification is a key to a good strategy; this helps when you are investing.
BLOCKCHAIN
What is Blockchain?
Cryptocurrencies like Bitcoin and Ethereum are created by technology that is called Blockchain. A blockchain is a list that helps us to view the history of transactions and verify them. It contains the record of bitcoins that you have sent and received.
What are advantages of Blockchain?
Here are some advantages of Blockchain:
They are global: It means that you can send cryptocurrencies across the world.
They are open: Because every record of transactions on crypto network is published publicly in the form of Blockchain anyone can scrutinize them.
What are disadvantages of Blockchain?
There are some disadvantages of Blockchain technology:
Energy Consumption: Many of the Blockchain companies especially those who are using proof-of-work like Bitcoin, charge a large amount of energy, which raises the environmental concerns.
Regulatory Uncertainty: The legal and regulatory environment for Blockchain and cryptocurrencies is still developing, which can create doubt and risk for users and buisnesses.