An easy guide to understanding how cryptocurrencies work
One word that you can’t get enough of today has got to be cryptocurrency. Understanding how the whole concept operates can be a massive problem if you are getting in. you may need to get an easy breakdown of crypto and how it works should you be interested.
It would be a stupid idea if you got into something without figuring out the bases first. The guide will hint at what you can and can’t do regarding crypto – you know what limitations are there. Below is the easy guide that’ll make it easy to understand how crypto works.
What’s Cryptocurrency?
The first thing you need to know before you can even figure out how crypto works is what it is. A cryptocurrency is a form of payment that can be used to buy online or offline goods. Several companies have their types of crypto – they are known as tokens.
To get an easier understanding, look at it this way, the same way you would go to a Casino and get chips in exchange for money; that’s how it works. Essentially, you have to put in actual money for you to get any cryptocurrency. You can then use the crypto to pay for services.
Blockchain
For crypto to work, there was a need for a decentralized tech that would enable the currency to spread across many computers. The tech is known as a blockchain, and it is a secure piece of tech – and it has to be; record transactions are stored there.
The main appeal as to why blockchain was chosen is security. People needed a secure tech if they were ever to put millions of their own money into the whole concept. Thus far, blockchain has worked miracles in this regard.
How Many Cryptocurrencies Exist?
Today, thanks to the advancement of digital settings, there are plenty of cryptocurrencies available. If you look at it from a trading perspective, over 13,000 different cryptocurrencies are publicly traded. And they continue to increase.
The total value of all available cryptocurrencies, as of 22 October, was around $2.5 trillion. That was a slight fall from the all-time high the value reached sometime back, about $2.6 Trillion.
The most popular of all the cryptocurrencies, bitcoin has a total value of around $1.2 Trillion
Popularity
One issue that has several people asking is why cryptocurrencies are popular? Several reasons come to mind with regards to the question. First, they offer you a chance to buy and pay for services online. With almost everything moving online, they make for a convenient way to pay.
For example, even betting sites are moving online. You need an easy way to load your accounts if you are to place bets there. Many Crypto betting sites are becoming more popular today as they provide an efficient, safe, and convenient way to place your bets.
Legality of Cryptocurrencies
Over the years, and due to its growing popularity, there have been questions over the legality of cryptocurrencies. Different countries have different ideas on how this matter operates. For example, in the US and various countries, they are legal.
A country like China, on the other hand, has banned the use of cryptocurrencies. That essentially makes them illegal in that part of the world. You need to know the law that governs the country you’re in before getting any.
Also, it would help if you watched out before you bought any cryptocurrency. Several fraudulent people have used the idea of crypto to swindle others off their hard-earned money. You need to know what you are getting into and how to buy the currencies.
How to Buy Cryptocurrencies
Before you go to buy any cryptocurrency, you need to know how to buy them safely. If not, you may invest your money in con games and claim crypto is fake later on. You need to have some money [actual money] or cryptocurrency to buy.
It would help if you then had a wallet – this is an online app where you can hold all your currency. Once you have the wallet, you will need to create an account on the exchange. From there, you can load up real money to buy the various crypto you want.
One of the popular exchanges you can use is Coinbase – here, you can create a wallet and also buy & sell cryptocurrency. You can also get the currencies from various online brokers; you only need to find the right one, for example, Robinhood, eToro, Tradestation, and Sofi Active Investing.
If you want to understand crypto before getting into it, here is an easy guide. With this guide, you get the basics and start from and what you need to know.
