In The News

You Should Learn These Things About Cryptocurrency.

Cryptocurrency has pulled the attention of millions across the world over the last few years. But, still, people know very little about it. It is basically the digital tokens 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.

What is Cryptocurrency?

Cryptocurrency is a digital mode of payment system that doesn’t require banks’ verification of 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.

The first and the best-known cryptocurrency today was created as ‘Bitcoin’ in 2009 by a person or persons called 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 the case of physical currency. All you’ll own is a key that can be used to move a record or a unit of value from one person to another without the need for 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.

Get a Free Estimation or Talk to Our Business Manager!

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 charges 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 are 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 the assistance of your broker or can use the exchange’s web or mobile platform to place your order.