Cryptocurrency got its name from the fact that it uses encryption to verify transactions while ensuring complete security and safety.
Cryptocurrency has pulled attention of millions across the world over the last few years. But, still people know very little about it.
It is basically the digital or virtual version of a currency. But, like other currencies cryptocurrencies are not regulated by a central issuing or regulating authority. Instead, there is a decentralized system in place to record transactions and issue new units.
The following article covers some of the important aspects of cryptocurrency. You can also contact Mark Tencaten, one of the popular cryto experts, to know about it in detail.
What is Cryptocurrency?
Cryptocurrency is a digital mode of payment system that doesn't require banks’ verification on transactions. In fact, it’s a one-on-one payment system that allows anyone to send and receive payments anywhere around the world.
“Unlike physical money that can be carried around and exchanged anywhere in the real world, cryptocurrency payments are recorded entirely on an online database as digital entries and are stored in digital wallets,” explains crypto expert Mark Tencaten.
The first and the best known cryptocurrency today was created as ‘Bitcoin’ in 2009 by a person or persons called as Satoshi Nakamoto. The identity of the creator/s is still a mystery as there is a decentralized authority that operates Bitcoin.
How does cryptocurrency operate?
Basically, cryptocurrencies run on software networks, managed by a wide range of computers through separate copies of the same program. While all the computers are interconnected, no single computer controls the network, thereby structuring a “decentralized” network.
This decentralized network of computers performs two basic functions:
1. To process transactions, and
2. To maintain the database through recording and storing the transactions executed.
This set of transactions is segregated into sections called “blocks,” that are joined with each other in chronological order to form a long, unbroken “chain.” And the software formed by this network becomes “blockchain.”
A process called mining is used to create the units of cryptocurrency. It is important to note here that by owning cryptocurrency, you don’t own anything tangible like in case of physical currency. All you’ll own is a key which can be used to move a record or a unit of value from one person to another without the need of a bank or some other agency or gateway.
Though there are thousands of cryptocurrencies operating in the market, some of the most common ones are of course Bitcoin, Ethereum, Litecoin, and Ripple among others.
Steps to Buy a Cryptocurrency
Buying a cryptocurrency safely typically involves three steps:
Step 1: Choosing a platform
You can choose either from the dedicated cryptocurrency exchange or a traditional broker.
Traditional brokers are the online brokers who allow people to buy and sell cryptocurrency. These platforms generally have lower trading costs but offer very basic crypto features.
Cryptocurrency exchanges on the other hand offer multiple cryptocurrencies, interest-bearing account options, wallet storage, and more. These exchanges offer feature-based charge and come up with a host of user-friendly features.
(I) Funding the account
After choosing your platform, your next step is to fund your account to start trading. You can purchase crypto using currencies issued by the government via your debit or credit cards; however, crypto purchases with credit cards is not considered a preferred mode of payment. Some platforms also allow crypto exchange through ACH transfers and wire transfers.
(II) Placing an order
You can either seek assistance of your broker's or can use exchange's web or mobile platform to place your order.
You can also invest in crypto via payment services like Cash App, PayPal, and Venomo. To know more about it you can contact crypto expert Mark Tencaten.
How to Store Cryptocurrency
After purchasing cryptocurrency, you now need to store it safely in order to avoid hacking or theft. Physical devices or different online devices such as crypto wallets protect it from hacks or theft. Usually, cryptocurrency is stored in crypto wallets, which are physical devices or online software used to store the private keys to your cryptocurrencies securely.
This is the basic information about the sale or purchase of crypto. However, it is a more complex system than it may appear and may involve some risks as well. Therefore, it is advised to consult cryptocurrency experts such as Mark Tencaten to invest safely in cryptocurrency.
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