There are a lot of discussions about cryptocurrency these days and how it's fast becoming one of the most controversial ways of earning money. You may have already heard about cryptocurrencies such as Bitcoin or Ethereum, but what are they, and how do you make money from them?
Cryptocurrencies are alternatives to online payments, which convert traditional currency into an online currency. They function very similarly to traditional currency, but they also serve as a virtual accounting system. You will need to have your cryptocurrency wallet or account before you can start buying and selling them.
If you're interested in learning more about the concept of cryptocurrency, check out the beginner's guide to crypto down below.
What is Cryptocurrency?
Cryptocurrency is a virtual or digital currency that uses cryptography.
Unlike many traditional currencies used by people these days, cryptocurrencies work by using decentralized networks based on blockchain technology which makes it very secure since it is not monitored or controlled by a central authority or organization.
This makes cryptocurrency immune to any interference from the government. Cryptocurrencies are created through mining and solving mathematical problems using a powerful computer.
It then creates coins that are recorded on a public ledger called a blockchain. Users can purchase these coins and store them in secured digital wallets and accounts for use.
What are the Pros and Cons of Cryptocurrency
There are a lot of pros and cons to using cryptocurrency. One of which is its decentralization, which means no authority figure controls the currency. It is a free market where everyone can monitor it, thus reducing the risk of manipulation.
Since it is done online, they are much cheaper and faster to transact, unlike many other traditional currencies.
On the other hand, cryptocurrencies are also quite volatile, which can lead to massive gains or losses. There is also the lack of regulation which often leads to legal complications depending on your region.
Uses of Cryptocurrency in the Modern World
Cryptocurrencies offer convenience and modernization in how we deal with money in today's world. With that in mind, there are various purposes of cryptocurrencies that you can do today.
Many online establishments now accept cryptocurrencies to buy goods and services from different merchants. You can also trade cryptocurrencies and start investing in one for profit.
Another good use of crypto is sending money across different areas. Since they have lower fees than traditional currency transactions, many people often use cryptocurrencies to save more money.
How to Buy Cryptocurrency
Now that you've learned the uses of cryptocurrency, it is time to discover how you can buy cryptocurrency for your account.
The entire process is very simple and is very similar to adding funds to your bank account or digital wallet.
Check out the process for buying cryptocurrency below.
1. Choose a Cryptocurrency Exchange
The main difference between using traditional currency and cryptocurrency is the addition of a cryptocurrency exchange platform.
These platforms allow you to buy, sell, and store your cryptocurrency. A few good examples of trusted cryptocurrency exchange platforms are Binance, Kraken, and Coinbase.
Each of them has security features and is very popular amongst cryptocurrency users.
2. Create an Account
Once you have selected the cryptocurrency exchange platform, create an account. Make sure that you have all of the updated details before you open your account.
Sign up and complete the verification process when you receive the confirmation email.
After that, you can deposit using bank transfers, credit cards, digital wallets, and many other payment methods to transfer money into your exchange account.
3. Purchase Cryptocurrency
You can then use the amount that you have transferred to purchase cryptocurrency. It is up to you which cryptocurrency is worth at this moment.
After selecting and purchasing the cryptocurrency, you can transfer it to a secure digital wallet for safekeeping or start investing in it.
How to Avoid Getting Scammed with Cryptocurrency
Cryptocurrency is known to have some of the worst scams, and many people often fall victim to them.
The thing is, many people get scammed with cryptocurrency simply because they have very little knowledge of how it works and what it does.
By equipping yourself with proper information, you start to understand the concept of cryptocurrency and be able to identify when things aren't right.
There are a few ways for you to avoid getting scammed with cryptocurrency.
1. Research is Key
Researching and proper education on the concept of cryptocurrency is the best thing that you can do to prevent yourself from getting scammed.
Invest in informing yourself of any cryptocurrency project or investment before you commit to investing in them. There are hundreds of articles that you can find to learn more about cryptocurrency.
You can also attend seminars and conventions to further explore the concept of cryptocurrency and add them to your knowledge.
2. Always Verify
Always make sure that you are using reputable wallet and account services when it comes to cryptocurrency. You can check their website and read customer reviews.
You often get a glimpse of how they process funds, and the common issues users encounter. If the website has no negative reviews, you might want to check out sources to find out.
It is also a red flag that the website has no negative reviews unless they are trying to cover it up. Always be skeptical of what they offer, especially when it is too good to be true.
3. Take Advantage of Security Measures
These cryptocurrency wallets and accounts offer a lot of security features. Take advantage of these measures to prevent getting hacked.
Use features like two-factor authentication and a very strong and unique password to protect your account. Enable any monitoring feature that the wallet has so you can immediately receive notifications if there are changes to your account.
Conclusion
With the innovation of technology, there is a great chance that we will be seeing more and more traditional merchants and establishments use cryptocurrency in the future.
For now, it is best to educate yourself on cryptocurrency so you will know how to use, benefit, and invest in it when the time comes. Always stay informed when it comes to these digital currencies.
