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What is Crypto Currency?

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31-August-2022 UI/UX

What is Crypto Currency?

We have covered the features and uses of Cryptocurrency. One should thoroughly study cryptocurrency for investment, and the familiarity with Cryptocurrency will increase in the future.

What is Crypto Currency?

What is Crypto Currency?

Cryptocurrency, known as crypto, (presented digitally or virtually), is used for transactions, and is secured using cryptography. It uses a decentralized system to record transactions and issue new units. The users can send and receive payments in a peer-to-peer connection system. Added that, the user need not rely on the bank. These actual world transactions are carried out by physical money, whereas cryptocurrency transactions are done in digital entries, which are recorded in a public ledger and stored in digital wallets. An encryption system is used in Cryptocurrency to ensure safety and security during transactions. Hence it is called Cryptocurrency.

Working Process of Crypto Currency

Cryptocurrency is called Bitcoin, launched in the year 2009. It involves an advanced coding process for storing and transmitting data. The transactions record is stored in a public ledger called a blockchain. Mining is a process used to create cryptocurrency units, which generate mathematical calculations and coins. The users can get the currencies, and a cryptocurrency wallet is used to store them.

Examples of Cryptocurrency

Some of the examples of Cryptocurrency are,

Bitcoin

It was launched in 2009, and the currency was developed by Satoshi Nakamoto and is commonly used for trading purposes. The people's identity remains unknown, used by individuals or groups of people.

Ripple

It was launched in 2012 and is a distributed ledger system. It is used to track different kinds of transactions. Various fields like banks and financial industries use Ripple.

Litecoin

Litecoin is similar to bitcoin, where it develops innovations quickly, including a quicker payment system and processing more transactions.

Ethereum

It was launched in 2015 and is a blockchain platform called Ether (ETH) or Ethereum. It is a familiar one after Bitcoin.

Buying Process of Cryptocurrency

The steps involved in buying Cryptocurrency are,

  1. Users can choose their convenient platform to buy Bitcoin.
  2. Traditional brokers are called online brokers, where they provide a way to buy and sell Cryptocurrency, including stocks, ETFs and bonds. It offers low trading costs with fewer crypto features.
  3. Cryptocurrency exchanges- Cryptocurrency exchanges include wallet storage, interest-bearing account options etc. Several businesses charge asset-based fees.
  4. Several features like fee charge, storage, security, and withdrawal options may vary based on the platform.
  5. After choosing the desired platform, the user has to fund their account to start trading purposes. Most crypto exchanges allow purchasing crypto using fiats such as US Dollar, British Pound or Euro using debit or credit cards. Buying Cryptocurrency using a credit card is sometimes impossible because some credit card companies don't accept that process. Because cryptocurrencies are highly volatile. The alternate method includes ACH and wire transfers. Based on the chosen platform, the payment methods, time for deposit and withdrawal, potential deposit and withdrawal transaction fees, trading fees, and time to clear deposits may vary.
  6. The next step involves order placement. Order placing is done in broker or using mobile or web platform. To buy cryptocurrencies, options include the type of order, the number of cryptocurrencies and confirming the order. The same procedure applies to the selling process. To invest in crypto, PayPal, Cash App, and Venmo provide the facility to the user to sell, hold cryptocurrencies, and buy.

Several investment methods include Bitcoin trusts, Blockchain stocks or ETFs, and Bitcoin mutual funds.

Cryptocurrency Storage methods

After receiving Cryptocurrency, it must be stored to protect it from hacking or theft. A Crypto wallet is used to store Cryptocurrency. Some exchanges or brokers provide the wallet automatically, while some do not. It is a physical device or software used to securely store the user's Cryptocurrency's private keys. Wallets are categorized into,

  1. Hot wallet storage- It is an online software to save the private keys of the user's assets, and hot wallet storage is called crypto storage.
  2. Cold wallet storage- It is used to store the users' private keys on offline electronic devices. Fees changes in a cold wallet, while in a hot wallet, it does not occur.

Usage of Cryptocurrency

Using cryptocurrency, one can buy everything from small to big things. Some of the concepts include,

  • E-commerce and technology sites
  • Car and Insurance
  • Luxury goods
  • Insurance

Summary

In the above article, we have covered the features and uses of Cryptocurrency. One should thoroughly study cryptocurrency for investment, and the familiarity with Cryptocurrency will increase in the future.

 

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