How does cryptocurrency work?
By
What is it?
Cryptocurrency is a digital payment system that doesn’t need banks to
verify transactions. They can be thought of like an online casino chip, like
the kind you use to play NetBet slots or similar, without the physical
element. It can be tailored to a specific company and can be swapped for goods
or services online but unlike casino chips, it uses strong cryptography for
secure online transactions. The appeal over regular transactions is its extreme
security.
What are the biggest
cryptocurrencies worth? By far the most famous and widely used currency, Bitcoin has a market capitalization
of $765 billion. Behind it is Ethereum, which is worth $32 billion and then
Tether at $62 billion. The ten largest trading cryptocurrencies also include
Binance Coin, Cardano, XRP, USD Coin, Dogecoin, Polkadot and Uniswap.
What are the merits of
cryptocurrency? Supporters see cryptocurrencies as the way of the future, due to the
fact that it removes central banks from managing the money supply and avoids
the banks reducing the value of money with inflation. Crypto is also secured
with a technology called blockchain, which is a decentralized technology that
manages transactions over many computers.
How do I buy cryptocurrency? Some cryptocurrencies like Bitcoin, allow their purchase with U.S.
dollars, but others require another cryptocurrency to buy them. Critically,
you’ll need a “wallet” app to hold your currency, like Coinbase or Trust, where
you can transfer real money to buy cryptocurrencies.
Once you have these, do your research. Learn about cryptocurrency
exchanges and choose the one that feels best to you.
Before you buy, look at who owns the company, are there any other major
investors, will you own a stake in the company or just currency and is the
currency developed or looking to develop? The more developed a currency the
less risky your investment will be.
Make lots of smaller investments instead of putting all your money into
Bitcoin just because it’s the one you’ve heard of and prepare for very high
highs and very low lows.
Who offers cryptocurrency? You can buy cryptocurrencies from online brokerages like Binance.US,
Coinbase, eToro and Gemini.
What scams should I look for? A lot of fake websites have been created to look like original start-up
companies. Always make sure to check for the lock in the address bar to make
sure it’s secure and avoid any without “https” in the address. You might also
be directed to a different platform for payment, so keep an eye on that lock on
every page.
Fake apps are also popping up in Google Play and the Apple App Store.
Stakeholders are quick to shut them down usually, but it is often not quick
enough for the thousands downloading them.
Be careful who you trust on social media. Even a pseudo-celebrity can be a scam artist and you
can’t be sure you aren’t following imposter accounts or hacked accounts and if
you have doubts about an email from a company, ask someone in the company, and
keep your company choices to those who staff real people.
Buying cryptocurrency is a risk, so be sure to really think through
your choices with your hard-earned money.
