How To Start With Cryptocurrency When You Know Nothing About It
Table of Content
- Cryptocurrency
- Types of Cryptocurrency
- How does Cryptocurrency work?
Mining (Processing)
Exchange/Transaction
Wallets
- How to start with Cryptocurrency when you know nothing about it?
How to Store
- Paper wallet
- Physical Bitcoin
- Mobile wallet
- Web wallet
- Desktop wallet 8
- Hardware wallet
How to buy
- ATM…
- Gift Cards
- P2P
- An Investment Trust
- Difficulties of buying Bitcoin
Credit card or PayPal
Warning about Bitcoin
Bitcoin price is volatile
Secure wallet
Bitcoin Price is irreversible
Bitcoin is not anonymous
Government taxes and regulations
Conclusion
Cryptocurrency
Cryptocurrency is a different type of medium of exchange that works digitally or virtually, and it is a type of unregulated digital currency that is only available on electronic media. This can only transact through particularly designed software or selected mobile applications or mobile applications through a secured medium of use. More simply, Cryptocurrency is a new form of digital money that can only be bought and transacted through particular software by using the internet. It uses cryptography to secure all the transactions, which is the science of protecting the data by converting them into a secure format.
A simple example or basic of cryptography is the encryption of messages in which other characters replace letters. These codings handle the entire process in a systematic manner and function. In this, there is no third party like a bank, both parties, the buyer and seller, are directly in contact with each other. It is the most important feature of Cryptocurrency that any of the central banks does not have control over it. Furthermore, it uses decentralized networks that means having no central computers, servers, or banks.
The concept is called Cryptography
This currency is distributed among thousands of computers without any central authority. Cryptocurrency flows peer to peer that refers to the flow of coins from person to person. They don’t use ant third parties like a bank, Facebook, PayPal, or others. These are all trusted parties, but in this case, only a person is directly contacted with the other person. This seems trustless, like users are controlling all of their information and money by own. Every user has their designed codes that stop sharing information with others. This concept is cryptography that we discussed at the beginning of our topic.
If you break the Cryptocurrency word, you can understand it more clearly. Where Crypto means hidden, and the currency is the medium of exchange. When the data is hidden with cryptography is called encrypted. And yes, when it uses the medium of a network to flow, it must be globally with no trouble. This concept elaborates that Cryptocurrency has no borders.
Types of Cryptocurrency
Following are the famous types of Cryptocurrency all around the world:
- Bitcoin
- Bitcoin Cash
- Litecoin
- Dogecoin
- Ethereum
- BAT
- NEO
- Ripple XRP
- Stellar (XLM)
- Cardano (ADA)
Mostly, Bitcoin is very familiar among beginners, and this is the original and used most widely.
How Does Cryptocurrency Work?
- Mining (Processing)
Miners attempt o solve the numerical riddles first to put the following block on the blockchain and claim the prize.
- Exchange/Transaction
Here the exchange of currency takes place that means parties play the basic part of the business.
- Wallets
A cryptocurrency wallet is the designed software that keeps private and public keys to enable users to send and receive digital currency plus monitor the data.
How to get started with Crypto when you know nothing about it
As a beginner, you can start with the help of the most famous Bitcoin without understanding all the digital techniques. You don’t require anything to buy Bitcoin as a beginner, all you need is to install the Bitcoin wallet and then it will generate the new address yours and the amazing thing is you can create more and more addresses whenever you need them. Here, the address can open to friends and family, so they can also pay or vice versa when anybody wants to dive into the market of Cryptocurrency and search on different platforms to understand more about it. This will make you know about every type of Cryptocurrency and make your decision easy about which type of currency you should work with and how to invest and buy.
How to Store
Cryptocurrency is a digital currency that is different from traditional currency, and the approach is also changing from the conventional way when it comes to storing. You can encrypt your money, so it can be beneficial and make you financially strong if you go technically with perfect strategies. Several types of cryptocurrency wallets can feed different needs, as discussed above. There are different types of a wallet like
Paper wallet
It is the document containing the public address where you receive Bitcoin and private keys, which makes you capable of storing and transferring Bitcoin to that address.
Physical Bitcoin
This is the easiest way of storing funds more safely and has extreme use while trading.
Mobile wallet
This is for those who are daily users of Bitcoin or Cryptocurrency and are very helpful to monitor them.
Web wallet
These private store keys on a particular server and it can be controlled by a third party too. Different features are also there and can be useful when you are in the market.
Desktop wallet
You can easily install or download on your PC and can store all private keys on your hard drive.
Hardware wallet
This enables the user to store all keys in particular hardware that keeps data more safe.
How to Buy Cryptocurrency
Now, there are many different opinions about buying Bitcoin, and for this, a person also needs a wallet. And all the wallets, discussed above are the same when it comes to storing. But when you talk about purchasing Bitcoin, that is not easy. Following are the ways:
ATM
Bitcoin ATM is present worldwide in different countries that can easily be accessed and are growing very fast. The ATM charge around 3 percent to 8 percent on the normal exchange, and all you need is to insert cash into ATM then it can be scanned through wallets.
Gift Cards
These are cheaper than using cash, and you can purchase these easily. Some buyers also accept gift cards for cash.
P2P
It keeps the transaction anonymous and reduces the bank complication that face-to-face trade with local sellers would be the easiest way to buy Bitcoin.
An Investment Trust
A venture trust is a type of aggregate interest where the investors’ cash is combined on or after a certain number of offers that trust issues when it dispatches.
Difficulties of buying Bitcoin Cryptocurrency
Credit card or PayPal
It doesn’t matter what trading method you are using when it comes to buying the Bitcoin because it’s not easy to buy with a credit card or with PayPal, and it also relies on your location. It requires a bank payment method as it doesn’t support this type of exchange.
Warning about Bitcoin
Many problems occur when it comes to Bitcoin or Cryptocurrency and some of them are:
- Secure wallet
Every user has to secure their wallet as they save their real-life physical wallet. It is very easy to transfer money and also allows full control if you use it perfectly.
- Bitcoin price is volatile
No one can predict Bitcoin price as it increases and frequently decreases due to its short economy.
- Bitcoin Price is irreversible
The Bitcoin price can only be refunded by the person receiving funds that transactions can’t be reversed easily.
- Bitcoin is not anonymous
Every person has to secure their transactions and protect privacy. Bitcoin transactions are stored publicly and on the network, that everyone can see your balance and account. An individual should be strong with security.
- Government taxes and regulations
Every user should be attentive to the laws and regulations of the country as Bitcoin is not legally proven, and it’s your responsibility to follow all regulations.
Conclusion (Cryptocurrency)
The market for Cryptocurrency is very wild and frequent. And day by day new modification appears, so every user has to keep their eyes open with the investing, buying, and storing. It can make you financially stable if you put strategies and go with this with a sharp mind.
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