Below are the most common questions that I've been asked, now is my opportunity to share with you what the answers that hopefully will help you on your way to being successful crypto trader.
What Is Cryptocurrency?
Cryptocurrency is a form of virtual currency that can be traded or exchanged for other goods. There’s a wide variety of cryptocurrencies out there; in fact, over 3,000 types of crypto exist. Some are more serious like Bitcoin (by far the most popular) while others are jokes that ended up being successful cryptocurrencies, like the Dogecoin or the Coinye.
Cryptocurrency was built around very complex mathematics and computer engineering which is why it can often be complicated to understand. While the code to create cryptocurrency was actually developed back in the ’80s, it didn’t actually get put to use until much later.
How Do You Purchase Crypto?
Cryptocurrency uses a blockchain that records and stores all crypto transactions. The blockchain is run by crypto miners, people who create cryptocurrency through more complex equations and computer systems. Usually, a cryptocurrency transaction only takes a few minutes to be completed. These transactions are kept extremely secure through codes created by the user that are very difficult to hack.
Purchasing cryptocurrency is as easy as buying something off of Amazon. All you need to do is choose a crypto platform, we recommend eToro as they are one of the biggest around and also offer stocks and shares trading. After that you can use your debit card to purchase and exchange cryptocurrency. If you really what to get to the bones of crypto trading with a full blown cryptocurrency trading account you can try Binance.
What Is Crypto Worth?
Think of cryptocurrency being like the stock market: its value goes up and down, depending on the day. Checking on the value of certain cryptocurrencies is an important step to take before committing to purchasing it. You want to ensure the specific crypto you’re investing in is stable.
But how can you know if a certain cryptocurrency is stable or not? Let’s take a quick dive into a very simple economics principle to explain that. When demand for something is higher, the price will be higher, but if the demand is lower, the price will be lower. So the more crypto that has been issued, the higher the price. And unlike normal currency (also known as fiat currency) which has an unlimited supply, cryptocurrency caps out at a certain point.
One other reason crypto worth can change is based on how useful it is. If one cryptocurrency is more accepted than others, then it’s value will increase significantly.
Also see: What is Bitcoin?
What Do You Do with Crypto?
When you go online shopping, you often see an option to pay with a credit card or PayPal. Now, some online retailers offer the option to pay with cryptocurrency. So if you’ve bought crypto and you’re wanting to do some shopping, that’s a great way to spend it. Most sites will have an icon of a cryptocurrency when you enter the shopping cart feature, which will indicate if they accept it or not. See our article How can you spend Cryptocurrency? for more information.
One of the most popular things people use cryptocurrency for is to build up an investment portfolio for themselves. Like we said before, the value of crypto can increase and decrease. By investing crypto, you have the potential to grow that investment even more and receive great gains from doing so.
Is It Worth Investing?
Cryptocurrency is becoming more widely used from country to country. It may not be a bad idea to start investing in it. Others have done it before and seen a positive outcome. The more you invest, the more likely the value of the currency will increase.
Do keep in mind that cryptocurrency is liable to be taxed in certain circumstances. For example, if you received any gains on your crypto, you’ll be taxed on that.
Overall, cryptocurrency is an interesting world to get into and it’s definitely worth a try!