The usage of paper cash is declining year to year. Most prefer using credit and debit cards, as they are more convenient, and you don’t have to worry about the cashier counting exact change. But at the beginning of the 2010s, another form of payment was developed: Bitcoin.
Bitcoin is a cryptocurrency. Cryptocurrencies have exploded in popularity since the mid-2010s, and many Internet users today are raving about the latest developments of other cryptocurrencies like Ethereum and Dogecoin. Even public figures are getting in on the action, the biggest supporter of cryptocurrency being Elon Musk.
But what, exactly, is cryptocurrency? And how would you even use it? Today, let’s answer those questions and dig deep into the world of crypto.
What Cryptocurrency is
The best way to describe cryptocurrency is by calling it a digital currency. Think of it like cash, but instead of handling paper and coins, you’re using an online ledger to make transactions.
And just like how every country has its own unique currency, there are dozens of types of cryptocurrency available on the market. Bitcoin, Ethereum, Dogecoin, Litecoin, etc.: they are all available for you to purchase, sell, and use in your transactions.
One unique trait of crypto is that each type of crypto (or coin) is volatile. After all, there’s no regulation affecting crypto. This means that your Bitcoin that was worth $16,000 a day ago could suddenly drop into the low thousands by tomorrow. Crypto is an investment more than it is a flat currency.
How Cryptocurrency is Used
So how does someone gain crypto without buying some off someone else? And how would someone go about using crypto? Let’s start by discussing “mining,” the process someone would go through in order to gain cryptocurrency.
Mining involves someone using their computer (typically packed with a specialized graphics card and tons of RAM) to solve complex math problems that only machines can solve. Solving said math problems help verify the legitimacy of transactions (crypto trades) that take place. In other words, solving the math problem gets the user crypto and helps secure transactions.
Once a user gets their hands on some crypto, they are free to spend it however they wish. Some cryptocurrencies, like Bitcoin, can be linked to a debit card from certain issuers. Others can only be used on sites that directly offer crypto-payment services.
They could also go through a trading platform like Coinbase and sell their earned cryptocurrencies for cash.
How to Stay Secure When Using Cryptocurrency
All that said, the world of cryptocurrency isn’t perfect, and security is often an issue. From nonsecure trading platforms to basic user error, it’s easy to have your crypto stolen or have your information leaked.
So, there are a couple of things to keep in mind when trading crypto. One, use a VPN for security so that your information isn’t visible to anyone. After all, mining isn’t an entirely secure process.
Two, when storing your cryptocurrency, typically in a digital wallet, make sure you’re using a wallet that uses two-factor authentication. And always keep your wallet code on you, but never give it to anyone else!
It’s apparent from all the fanfare cryptocurrency has received the last few years that crypto is here to stay. So, it’s good to keep up with cryptocurrency’s latest developments and learn how to start trading!