Did you know that the first Bitcoin transaction took place back in May of 2010 to pay for an order of pizza? Since then, the crypto market has exploded, with various types of cryptocurrencies becoming more and more popular with the public.
Of course, if you’re not familiar with the world of crypto, understanding cryptocurrency can feel like a hard task. What does “cryptocurrency” mean, anyway, and why should you buy into it?
We’ve put together a quick cryptocurrency guide to cover the basics. Read on for more!
Understanding Cryptocurrency: The Basics
Before we dive into the specifics, what is cryptocurrency?
Often called “crypto,” cryptocurrency is a decentralized digital currency. The “crypto” in its name references cryptography, a mathematical method of making sure each unit of currency is secure.
Though you may have heard of mainstream forms of crypto like Bitcoin, there are actually thousands of different types of crypto in existence today.
Because crypto is decentralized, users trade it on a peer-to-peer network instead of working with a bank or government. These transfers happen instantly, and they use a technology called blockchain. You can think of blockchain as a digital ledger that records every crypto transaction.
The Popularity of Cryptocurrency
Though this type of currency is relatively new, its popularity has skyrocketed over the past few years. Beyond the novelty, there are a few key reasons for this.
First, cryptocurrency is an attractive investment for anyone hoping to diversify their portfolio.
Next, as more and more merchants accept crypto as a form of payment, it’s becoming more useful. Crypto wallets are becoming as easy to use as mainstream apps like Apple Pay, making them relevant in day-to-day life. Major brands like Microsoft, AT&T, and Whole Foods all accept crypto as payment, and you can even view this page to find Bitcoin ATMs!
In addition, the lack of association with world governments makes crypto stable in spite of politics or civil unrest. Anyone interested in decentralized finance might want to look into crypto as a resource.
Last, many users see crypto as the future of money, a financial shift that will slowly change the world.
How to Invest in Cryptocurrency
If cryptocurrency is digital, how do you buy and sell it?
If you’re hoping to invest in crypto, you’ll need to choose a crypto exchange. This is similar to choosing a stockbroker. Mainstream crypto exchanges include platforms like Coinbase and Binance.
Once you’ve signed up with a crypto exchange, you can follow their instructions to purchase your cryptocurrency of choice. You can purchase a single cryptocurrency or more than one of them.
You’ll store your crypto in a virtual “wallet” that you use for active trading. This can be either a software program or a physical device that looks like a USB.
With money in your wallet, you can start spending your cryptocurrencies or hang onto them as smart investments!
Make the Most of This Digital Currency
Love it or hate it, one thing seems certain: cryptocurrency is here to stay. Understanding this popular type of currency with our guide to crypto above can help you make the most of the opportunity by investing.
Want to stay on top of the latest digital trends? Be sure to take a look at our other posts for additional tips, guides, and insights!