A little time back, a revolutionized wind of digitization blew to bring the world to an all-new level of decentralization and transparency. That was the time when cryptocurrencies were introduced. The advancement these digital currencies introduced is worthy of being appreciated, but at the same time, extremely high to understand. To make the understanding procedure easier, let’s discuss all the nitty-gritty about cryptocurrencies:
What is cryptocurrency?
Cryptocurrency showcases a whole digital way to store, as well as transfer the values/money online. The cryptocurrency tokens or coins can be bought through a specified online medium. To purchase these digital coins, you have to invest the traditional money you own. No particular bank or person takes care or authorizes or controls cryptocurrency. Countless cryptocurrencies remain available online, and the most popular of them are Bitcoin and Ethereum.
The values associated with cryptocurrencies vary according to supply and demand. Basically, cryptocurrencies introduce an internet-based way to exchange money, i.e., done using cryptographical functions. The basis of cryptocurrencies can be defined through the Blockchain technology, which helps in attaining decentralization, immutability, and transparency.
How to buy cryptocurrencies?
To buy cryptocurrencies that are to be launched or new, you can be a part of ICO, i.e., Initial Coin Offering. It is a process similar to IPO (Initial Public Offering). ICO is a medium to raise funds, and the investors can purchase the offering and receive the newly launched cryptocurrency coin issued by the proposing company itself.
Usually, it is elementary to buy cryptocurrencies, just like you buy something online by investing a particular amount of money. The only change is that in the case of cryptocurrencies, you get digital money by investing traditional money of yours. There are various sites and apps that you can visit in order to buy cryptocurrencies. Also, you can access digital wallets for yourself where your cryptocurrency will be stored. You will be accessing private keys to your wallet, through which you can transfer the digital coins wherever you want.
How to spend or use cryptocurrencies?
If you have your digital wallet, as well as digitized lock & key, then you can actually send money to people digitally, as well as, you can shop online using your cryptocurrencies. Some of the websites or apps also introduce ‘Vaults’ to store the digital money. All you require to do is to enter the amount that intends to transfer, and voila! It will be done in a fraction of seconds.
Are there any limitations and hidden fees?
While using cryptocurrencies for some outlets, you must be sure of the fact that some of them apply specific restrictions, as well as limitations on the cryptocurrencies. As these are not legalized in all the countries, and not used too openly by all, you must analyze everything before using the cryptocurrencies in your day-to-day life.
Also, there are hidden fees associated with the same. The mediums through which you’ll be using cryptocurrencies and storing them, you’ll have to pay a specific amount of fee to them while you buy and sell cryptocurrencies. The amount of fee can be defined as a specific percentage of the total deposit amount.
Are cryptocurrencies safe to use?
That completely depends on your perspective regarding the fact on which cryptocurrencies function. This medium is introduced to maintain transparency, immutability, and utmost security. The Blockchain technology behind the same maintains a decentralized ledger of all the transactions, which is created using countless nodes, which are extremely difficult to track, as well as to hack.
Still, if there’s something that remains available online, and is said open to all, then it can be owned by anyone at a particular point in time. So, you have to be immensely careful while using the same.
This way, it can be said that cryptocurrencies come up with its own pros and cons, just like any other thing. The difference is created only how you accept and use it.