Cryptocurrency has been around since 2009. Cryptocurrency—or digital currency—is a way to make transactions over the internet with no interference from banks or governments. In this beginner’s guide to cryptocurrency, we’ll teach you how it works and what makes it different from traditional payment methods like cash, debit cards, and credit cards. Whether you use Bitcoin or another type of cryptocurrency, here are five things you should know about using cryptocurrency in your everyday life.
1) Cryptocurrency 101
What is it? Cryptocurrencies, also known as digital currency, are a type of unregulated, digital money. Like traditional currencies such as dollars and euros, cryptocurrencies can be used to buy physical and digital goods and services. However, cryptocurrencies aren’t printed like paper money; they’re produced by computers all around the world using complex mathematical formulas.
2) Introduction to Blockchain Technology
A blockchain is a secure record of transactions, stored across a vast network of computers, which can be accessed by anyone with an internet connection.
3) Understanding Blockchain Technology
How does Blockchain operate? Blockchain is essentially a distributed, digital ledger that records transactions in blocks—these are bundles of data stored on several computers at once, each with identical copies. When a transaction occurs—like sending money from one person to another—it gets added to an existing block. This new block is then digitally signed by members of its network, ensuring it’s not fraudulent.
4)Can we turn Crypto to cash?
The reality is that most cryptocurrency exchanges don’t support fiat currencies, so you can’t go directly from crypto to cash. There are two ways around that though. You can either use an exchange that does support fiat currencies(Fiat money is a government-issued currency that is not backed by a commodity such as gold, like the U.S. dollar), or you can sell your crypto for cash on a peer-to-peer exchange like LocalBitcoins. The first option is better for getting out of your positions, while the second one is great if you want to make a quick buck buying and selling Bitcoin on arbitrage opportunities.
5) What are the Advantages and Disadvantages of Cryptocurrency?
There are many advantages and disadvantages of cryptocurrency. Let’s discuss some of them, shall we? If you’re considering getting into cryptocurrency, it is important to be well informed and educated in this matter.
One of cryptocurrency’s biggest advantages is that it takes out banks as middlemen, which usually charge fees for transactions. Instead, people pay lower fees with cryptocurrencies like Bitcoin and Ethereum. With cryptocurrency, you also own what you have; there’s no chance of identity theft or fraud because everything is encrypted.
This can be a huge advantage over credit cards that let third parties hold your information and charge you without you knowing. Cryptocurrencies aren’t controlled by a single entity either; it isn’t run by a bank or a government—that means no one can see your transaction history or lockdown an account if something goes wrong.
The main disadvantage of cryptocurrency is that if you lose your password or cryptographic key, there’s no one who can return it to you. Additionally, cryptocurrencies aren’t guaranteed by any centralized government or bank. In other words, only use as much as you’re willing to lose. You want more info on this matter go to Consumer.ftc.gov/artcles/what-know-about-cryptocurrency-and-scams and feel free to let us know your comments or opinions on this matter.