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Thursday, April 22, 2021

Cryptocurrency For Beginners- Everything One Should Know

What are Cryptocurrencies? 

Cryptocurrency is just like the normal currency that we use. But they are digital in nature. You can use them for buying goods and services. They make use of cryptography so that your transaction remains secure.  




Let us find out what is cryptocurrency and cryptocurrency information, you would like to be aware of. This guide to cryptocurrency should help you to understand the finer aspects of the same. 

Understanding Cryptocurrency

This new currency is here to stay. Let us find out more about it under the following sub-topics, namely,

Crypto currencyWhat is crypto currency? Also known as crypto cash, it is a form of payment that you can use online in exchange for services or goods. You will come across many such companies that provide their own currencies. These are called tokens. If you happen to buy any goods from that company, you can use these tokens in exchange for the same. 

They make use of blockchain technology. It is a decentralized technology that records transactions that take place. Many computers are involved in these transactions that manage them. 

As far as the number of cryptocurrencies available, you will find that more than 6700 various cryptocurrencies are publicly traded according to CoinMarketCap.com. This is Cryptocurrency for beginnersbasically a website that deals with market research. 

They raise funds through ICOs or Initial Coin Offerings. As of September 2020, the total value of bitcoins exceeded $370 billion. The most popular among all of them was pegged at $210 billion. This was stated again by CoinMarketCap.com. 

This can be better understood with the help of the table below-

Market Capitalization Cryptocurrency
$210 billion Bitcoin
$48.6 billion Ethereum
$13.6 billion Tether
$12.2 billion XRP
$5.1 billion Chainlink
$5 billion Polkadot
$4.9 billion Bitcoin Cash
$3.8 billion Litecoin
$3.5 billion Binance Coin
$3.4 billion Crypto.com Coin

 

How to Buy Cryptocurrency- Cryptocurrency Investing

Bitcoin and some cryptocurrencies can be bought with US dollars but most of them require that you buy them with bitcoin or any other type. 

 Guide to cryptocurrencyIf you are planning to buy cryptocurrencies, you must have a “wallet”, which is an online app that will “hold” the currency. You have to open an account on the exchange where you transfer real money. With this real money, you can purchase cryptocurrencies like bitcoin or tether, or any other type you prefer. 

One of the popular cryptocurrency trading exchange is Coinbase. Here you will be able to sell, buy, and exchange after creating a wallet. 



Getting into Cryptocurrency

What is cryptocurrencyPrior to getting into cryptocurrency deals, you must find out whether or not it is legal in that country. Remember, they are not insured by the government in the United States as you would expect the other bank deposits to be. For instance, if you have your money parked in a bank account, you know the money is safe. 

However, possessing bitcoins or cryptocurrencies means you have them in an online wallet that might be provided by a company. In the event, the company gets out of business or the company’s server and the website is hacked, you might lose the money. If you do so, your cash will not be protected by the government. 

Another important aspect that you must keep in mind is that the value of cryptocurrencies keep on changing, in fact, even by the hour.

So, if you have invested a few dollars in the cryptocurrency with the hope that you will earn some profit, you may lose out on money overnight. 

Few risks associated with them are-

  • There is no guarantee that you will earn a profit
  • No two cryptocurrency will have the same value
  • There may not be legal protection for the investments you make

Cryptocurrency Scams

Getting into cryptocurrency, How to buy cryptocurrencyThese days, you will come across news that will provide several such instances where people have been hoodwinked. Watch out for these red flags-

  • If someone promises you excellent returns
  • Assures you of big payouts
  • Assures you that the returns will be in dollars or any other popular cryptocurrency
  • Provides terms and conditions related to the confusing investment

In a nutshell, if you are interested in investing in cryptocurrency, read between the lines. Do your bit of homework before you dive-in. 



 

 




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Daniyel Carlson
Daniyel Carlson is a Young Researcher in the field of Data Science & Analytics having research experience of more than 8 years. He has a Masters in Computer Engineering and currently serves as an Editorial Assistant in IGI Global, United States of America. Daniyel also holds honorary positions in the Associate Member of Institute of Research Engineers and Doctors, International Association of Computer Science and Information Technology, International Association of Engineers, Society of Digital Information and Wireless Communications.

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