Crypto, or cryptocurrency, as it’s referred to by many, has become extremely popular over the last few years.
It all started with Bitcoin in 2009, and now there are hundreds of other forms of crypto out there, with more being developed all the time.
You can even trade cryptos like stocks or any other form of currency through trading apps like Robinhood.
However, it isn’t always easy to figure out what cryptocurrency is or how to get with crypto and make some money off of it.
What is Cryptocurrency
Cryptocurrency uses cryptography to secure its transactions, verify them, and keep them from being forged. Bitcoin was invented in 2009; since then, it has become established as one of the most significant cryptocurrencies (see figure below).
There are more than 1500 alternative currencies. According to CoinMarketCap, there are over 700 cryptocurrency projects currently being developed.
This can create confusion for those who aren’t fully aware of what these currencies represent or why they exist in the first place – after all, it’s not like cash that can be printed by governments or entities such as central banks.
The first cryptocurrency was Bitcoin which was invented by Satoshi Nakamoto in 2009. The idea behind Bitcoin was basically that you could use it as a way to exchange goods or services over the Internet without having to rely on any third party or middleman such as PayPal.
There are many other cryptocurrencies similar to Bitcoin that was created after its inception such as Ethereum and Litecoin.
Litecoin can be said to be almost identical to Bitcoin except that it has a shorter blockchain.
Types of Cryptocurrencies
There are different types of cryptocurrencies. Each one has a different value and level of security. The most popular cryptocurrencies include Bitcoin, Litecoin, Ethereum, Dogecoin, and Monero.
Other cryptocurrencies include Gridcoin and PIVX but their value tends to be a lot lower than these other coins so I wouldn’t recommend them for investment or trading purposes.
Each cryptocurrency works slightly differently from one another in terms of security level and features so it’s important to find which coin is best for your needs.
In comparison to regular digital payments that are authorized by credit card companies or PayPal, cryptocurrency isn’t controlled by any central authority.
Transactions made using digital currency relies on cryptography rather than a trusted third-party financial institution for verification.
Cryptocurrency transactions are also anonymous, which means it’s harder for criminals to steal your identity and commit fraud against you.
These features make cryptocurrency an appealing option for people who don’t trust their banks or governments.
How Cryptocurrency Works
To begin, there are three core characteristics that cryptocurrencies all share. First, they’re all digital. Second, they’re decentralized; meaning that there isn’t any one central point where transactions happen.
Third—and perhaps most important—they’re anonymous. Although you can track a transaction on a public ledger called blockchain if it uses cryptocurrency (most do), many people like its anonymity because transactions are difficult to trace back to individuals or companies.
A cryptocurrency is a digital or virtual currency that works as a medium of exchange. It uses cryptography (security technology) for security.
Cryptocurrencies are considered decentralized because they are not regulated by any country or central bank; instead, it’s an open-source network run by their users.
The concept was introduced in 2008 when Satoshi Nakamoto (whose identity has never been revealed) introduced Bitcoin.
Benefits Of Cryptocurrency
The key benefit of using cryptocurrency over conventional payment methods like credit cards or cash transfers is that payments are final.
In a world where cyber-attacks are becoming an increasingly common problem, a more secure way to pay online seems like a good idea.
This security has become more important over time due to high-profile hacks. For example, in December 2016 we saw what was then believed to be one of the largest Bitcoin exchanges in existence—Mt Gox—shut down after 850 000 bitcoins worth $450 million were stolen by hackers. This theft led Mt Gox to declare bankruptcy.
One important feature cryptocurrency has over normal currencies is that transactions aren’t reversible.
Once a transaction has been made, it’s as good as permanent. There can never be a situation where you give somebody some cash, they spend it somewhere else and then complain to their bank that they didn’t authorize that transaction.
Who Can Use Cryptocurrency?
For now, cryptocurrency may be more suited for those who don’t have access to bank accounts or credit cards.
But that may change over time. For example, some people in high-income areas—like New York City—might want in on trading digital coins.
Even if you don’t consider yourself a finance expert now, it might not be a bad idea to learn more about how cryptocurrency works today so that if digital coins become popular tomorrow (or later), you can decide whether or not you want to be a part of it then.
Is cryptocurrency an investment opportunity or a good way to send money overseas? It depends on who you ask.
Some people think it’s a scam that will eventually crash and burn. Others believe it could transform the global economy.
There are even those who believe cryptocurrency will one day replace fiat currency entirely. What does history tell us about whether cryptocurrency has staying power?
Where did it come from in the first place, and why has its value skyrocketed so dramatically in recent years?
How To Buy Bitcoin or Other Crypto Currency Coins?
Buy Bitcoin or other Cryptocurrency coins from Coinbase. Coinbase is one of several reputable exchanges where you can purchase Bitcoin.
To start trading on Coinbase, click here to sign up. Once your account has been confirmed (typically within a few minutes), visit your dashboard and select Buy/Sell at the top right.
Enter how much you want to spend/how many coins you want to buy and click Buy Bitcoin Instantly…and that’s it!
Your order will be processed by Coinbase promptly and funds transferred into your online wallet which can then be accessed using any internet-enabled device via a web browser or mobile app.
Don’t forget though, that cryptocurrency market fluctuations can be extremely volatile; don’t put all your eggs in one basket!
For example; If you want to buy one bitcoin then you would enter $100 into your USD wallet on Coinbase (to pay for it) and once that transaction has gone through successfully (within minutes), a confirmation email will be sent directly to you.
The funds will now be available in your Bitcoin wallet (the online software program that enables you to spend your cryptocurrency coins) which you can access through their site or an app on any device.