What You Need to Know About Cryptocurrency
What is cryptocurrency?
A type of digital currency, cryptocurrency, is one that exists only electronically. You can’t cash in cryptocurrency to buy physical bills or coins. You can exchange cryptocurrency online with anyone using your phone or computer without the need for intermediaries like banks. Bitcoin and Ether are two well-known cryptocurrency brands. However, there are many other cryptocurrency brands and new ones are constantly being created.
How do people use cryptocurrency?
Many people use cryptocurrency to make quick payments, avoid transaction fees charged by banks, or simply because they feel anonymous. Some people hold cryptocurrency in hopes that it will rise in value.
How can you get cryptocurrency?
An online exchange platform allows you to buy cryptocurrency. You can earn cryptocurrency by “mining,” which is a complicated process that requires sophisticated computer equipment to solve complex math problems.
How and where can you store cryptocurrency?
Your digital wallet can be on the internet, on your computer or on an external hard disk. Cryptocurrency is kept in a digital wallet. If something happens unexpectedly, such as your online exchange platform going out of business, sending cryptocurrency to the wrong person, losing your password to your digital account, or your digital wallet being stolen or compromised, you will likely find that no one is able to assist you in recovering your funds. You can transfer cryptocurrency directly, without the need for an intermediary such as a bank. This means that there are often no resources available to help you if you have a problem.
What is the difference between cryptocurrency and U.S. dollars? Dollars?
There are many important differences between cryptocurrency, traditional currency, and bitcoin.
A government cannot guarantee the security of cryptocurrency accounts.
A government cannot insure cryptocurrency accounts, just as U.S. dollars that are deposited into bank accounts. If cryptocurrency is stored with a third party company and that company goes out business or is hacked the government will not help you get your money back.
The value of cryptocurrencies changes constantly.
The value of cryptocurrency can fluctuate rapidly and even change by the hour. It is dependent on many factors including supply and demand. A large investment today that is worth thousands of dollars tomorrow might only be worth hundreds. It’s possible for the value to decline, but it is not certain that it will rise again.