What is Cryptocurrency?
Crypto is a digital form of currency with a collection of binary data designed to replace paper money. Where the ownership details and records are stored in a computer-based database referred to as a ‘ledger’. Cryptocurrencies are of over a thousand types available for purchase throughout the world so much so they serve as a tradeable digital asset. When customers buy crypto and are granted ownership after verification, they can use it later to exchange for goods and services. This popularity gaining digital currency is backed by the technology called ‘blockchain’, whose market is expected to rise to $23.3 billion by 2023.
The first use of electronic money can be traced back to 1983 when an American cryptographer conceived ‘ecash’ later implemented as Digicash in 1995. Later on, Satoshi Nakamoto, not the real identity surely, created the first decentralized cryptocurrency named ‘bitcoin’ in 2009. Which as of February 2021, had a market capitalization of $1072.21 billion. Soon after in the upcoming months Namecoin, Litecoin, and Peercoin were created. Furthermore, El Salvador became the first country in June 2021 to recognize bitcoin as a legal tender. Likewise, Cuba followed in August 2021 to do the same.
Steps to Buy Cryptocurrency
Trading crypto is not that safe as it may seem because of fraudsters paving their way into this very domain as well. It gets hard, at times, for customers to distinguish between authentic and bogus platforms. Scams include fake websites, celebrity endorsements, fake returns, and more. Steps that can add in genuine crypto buying are:
- Choosing a Platform and Creating An Account
The initial step is to decide the type of medium customer wishes to choose for purchasing cryptocurrency, it can be either a traditional middleman, (also known as a broker) or a dedicated exchange. Moving on, the customer is required to register an account by submitting details and undergoing identity verification pertaining to the risk-level possessed and purchasing amount.
- Choosing the Desired Crypto and Placing an Order
After the authentic registration, the customer is all set to browse within the vast variety. They can then select their desired crypto and its quantity. By selecting the ‘buy’ option, the order gets confirmed.
- Putting in the Wallet Address to Fund the Account
If opting for direct exchange the customer can choose from government-issued currencies, US dollar, Euro, or the Pound of British for instance, allowed by most of the platforms. Later on, the customer is required to provide the wallet address, if the exchange is non-custodial to complete the purchasing process.
Crypto Exchange; Here’s What is Needed to Know
The main advantageous feature of crypto is that it can be traded within the category. Customers can exchange Litecoin for Bitcoin and vice versa. Crypto exchange platforms are the ones that provide such roads for carrying out this process. So much so, the coin can be traded for Dollars or whatever desired fiats, the amount can then be credited into the regular bank account or kept in the wallet for future purchasing. The crypto online exchange acts as a marketplace identical to an online brokerage, where customers can buy, sell, and trade crypto.
|A centralized exchange is the authentic one that stays aligned with the governmental financial regulations. Proof of identity is required and in turn, the cash deposits are monitored and insured.||Online exchanges are unregulated with no centralized monitoring and governing authority rather nodes are user-owned. Although they provide a peer-to-peer exchange along with transparency.|
To Wrap Things Up
Cryptocurrency exists in digital form instead of the traditional paper one. It can be exchanged for goods or assistance and also within the same sort with other types of coins. The information is safely stored in the online database. The ownership is granted after the authentic verification and registration, whether the platform is centralized or decentralized. Customers opting to buy crypto have to follow simple steps on the online exchange platforms whereas, in the case of brokers the case is a bit different but with increased vulnerability. The customers can be exposed to various fraud pertaining risks including bogus websites and fake return scams.