Things to Know About Cryptocurrencies

We all do transactions on daily basis but using paper currency. But what about these cryptocurrencies. What questions do you have in mind? There are lots of people who are looking for an investment opportunity. They want to know what makes it different from cash. Cryptocurrency is a proliferating industry and there are scams out there too. How you can detect them?

We are going to answer all the questions about crypto like Ethereum and Bitcoin.

What is cryptocurrency?

Cryptocurrency is a digital currency that exists electronically. You cannot touch it as it is not in the shape of coins or paper currency. However, some services allow you to cash in crypto. You can only make an online transaction using your computer or phone. You do not need any intermediary to complete the transaction. There are lots of crypt coins on the market but two of them are very famous: Bitcoin, Ethereum.

The best thing about it is that you can make a transaction in few seconds. Furthermore, it does not cost large fees as there is no bank involved in the process. Many people buy crypto to earn some profit when the value goes up.

Where You Can Buy Cryptocurrency?

You can buy any digital coin from an online exchange. There are many fake websites so it is better to find the best Bitcoin exchanges to buy your coins. Another way to earn this currency is through mining but it requires computer equipment to solve complicated math puzzles.

Digital Wallet

Do some people ask that if we cannot physically store the currency, then where can we put it? The answer is, “you need a digital wallet”. It can be online or on your computer, or hard drive. Keep in mind that you have to keep the password in a safe place. If you lost it then no one can help you to recover your funds. There is no intermediary so there is no way to trace the transaction.

What Makes it Different From U.S Dollars

There are the following main differences between digital and digital currency

• In the case of paper currency, it is backed by the government. On the other hand, crypto is not insured by any government. If your currency is hacked, then there will be no one to step in and help you get it back.

• The exchange rate of digital currency is not constant. It changes rapidly, even by the hour. Many factors affect the rate such as demand and supply. There is a chance that currency that worth nothing today, worth thousands of dollars tomorrow.

Payments Via Bitcoin

Payments with digital currency are different from traditional methods.

• The payment does not have legal protections like credit or debit cards. If anything goes wrong, you can contact your credit card company to open a dispute and help you get your money back.

• The transactions with digital currency are not reversible. It means, if you make a payment then another person is the one going to pay you back. Hence, it is essential to make sure that you are dealing with a reputable seller.

• Most people think that transactions via digital currencies are anonymous. But it is not true as some currencies do record these transactions on a public ledger called “blockchain”. It includes the information of the sender and buyer. Some of the cryptocurrencies also include the wallet address of the sender and recipient. As we told you that you keep your currency in a secure digital wallet. It has an address and when you buy something, you have to give your information which can be used later on to identify you.

Stay Away from Scammers

There are people out there who find new ways to scam people. They want to steal your money using crypto. Most of these scammers only accept crypto as the payment method. It is a clear sign that these people are not trustworthy. The reason is that there is no way to get your money back from these scammers. It is really important to do your research and find reputable sellers to buy crypto if you want to invest. You can use the internet and online reviews to find such sellers.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes