If you’re reading this article, you’ve probably already heard of cryptocurrency. This revolutionary currency has taken the world by storm in the past few years and has made some early adopters very rich.
Cryptocurrencies, or ‘crypto for short, are digital currencies that can be used to purchase services and goods. They use an online ledger with strong cryptographic security to secure transactions online.
Many people start trading cryptocurrencies for profit. But what is a cryptocurrency, and how do you invest in it?
Here is the beginner’s guide to trading cryptocurrency.
What Is Cryptocurrency?
Crypto is a type of payment. Many companies have brought out their own cryptocurrencies; these are often referred to as tokens. These can be used specifically for services or goods that the company offers. You could imagine they are casino chips or arcade tokens.
Cryptocurrencies use a technology known as the blockchain. The blockchain is decentralized. It spreads across thousands of computers that will record and manage transactions. This makes the transactions carried out very secure.
Types of Cryptocurrency
There are currently over 4,000 different types of cryptocurrency. The most famous and commonly used cryptocurrency is Bitcoin. One example is DogeCoin; click here to find out more about buying DogeCoin.
The combined value of cryptocurrencies amounts to trillions of dollars.
Buying Cryptocurrency
If you’re planning on investing in cryptocurrency, you will first of all need to head to an exchange. Examples of exchanges include Coinbase, Binance, Kraken, and Bitfinex.
Most exchanges will allow you to use your debit or credit card to buy your currency. It is important that you don’t use the exchange to store your crypto, as these can get hacked.
Some smaller altcoins will require you to purchase them using a cryptocurrency such as Bitcoin or Ethereum.
Storing Cryptocurrency
With any fiat currency such as the US dollar or the pound sterling, you can store your money in the bank. Things are a little different for cryptocurrencies.
You’ll need to store your money in a “wallet.” A wallet is an address on the blockchain. Your wallet will have both a public address and a private address. The public address is where people can send funds, and the private address is where you send funds from.
Selling Cryptocurrency
If you want to make money out of cryptocurrency, you’ll need to sell too. As with any form of trading, you’ll need to sell for a much higher price than you paid for it. There are, of course, risks involved in this kind of investment as there are with every form of trading.
When it comes to selling your crypto, you can also do this at the exchange you bought it from.
Start Trading Cryptocurrency Today
Trading cryptocurrency may sound scary; however, it is pretty straightforward. Before you invest, read up on the market first and take expert advice.
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