Cryptocurrency has become a household term, and many people consider investing in it. The key is to understand a few basic concepts so that you are ready before you buy bitcoin or buy Ethereum. Cryptocurrency is a virtual currency, in other words, they are digital assets that run on the blockchain and are stored in a digital wallet. The different types of crypto have different uses, but they can all be purchased and held as an investment. Take a look at the top six things to know about cryptocurrency.
1. Where to Buy Cryptocurrency
When you want to get started in cryptocurrency, you need to know where to buy it. There are cryptocurrency exchanges online, and they allow you to deposit and withdraw local currency. Usually, you begin by depositing your Canadian dollars at the exchange, and then you can use those funds to purchase cryptocurrency. When you are choosing an exchange, do some research to make sure that it is reputable and easily allows you to convert your Canadian dollars to crypto and vice versa.
2. The Key to Success Is Diversification
Some people start out and buy Ethereum or bitcoin, which are two well-known cryptocurrencies. You can do this, but you will have all of your money tied up in one crypto, and your investment will follow that crypto directly. As you learn about crypto, you can learn about different cryptocurrencies. There are more than 1,000 out there, and some are more established, while others are riskier. Consider splitting your investment and monitor it closely for the best success.
3. Cryptocurrency Is Secure
When you buy cryptocurrency, it is stored in your digital wallet. You have a private key, and nobody can access your wallet without it. It is very important to keep the private key saved where you won’t lose it because you can lose your crypto if you lose your key to your wallet. Transactions are secure because they are stored on a public blockchain, and there is a network of computers that verify transactions. Your cryptocurrency is secure as long as you keep it stored in your own digital wallet.
4. Cryptocurrency Is Private
When you buy cryptocurrency, you do not need to register for an account at a financial institution the way you do with standard money. If you want to send crypto to someone or make a purchase, you simply need the wallet address of the recipient. Your transaction is pseudonymous, which means that it is identified by your wallet address without disclosing any information about who you are. This allows you to maintain privacy when you use cryptocurrency.
5. There Is No Middleman
Another thing to know about cryptocurrency is that there is no middleman. You can take your cryptocurrency and send it to anyone, and it will be transferred very quickly. Although there may be gas fees for the transaction, they are far lower than what banks charge to send out wire transfers. You don’t have to wait for your transaction to go through multiple channels the way you do when you send traditional money.
6. Anyone Can Use Cryptocurrency
Cryptocurrency is accessible to anyone with a smartphone or a computer and an Internet connection. It is easy for anyone to set up a cryptocurrency wallet, and you don’t need to have a credit check. People who don’t have bank accounts can use crypto for financial services without using a centralized banking authority, and it allows them to buy crypto, send money to loved ones, or make online transactions. Crypto is easy to use whether you want to invest, send money, or learn about this new technology.
