Cryptocurrency can be intimidating to some people because they simply don’t understand it. But to put it plainly, cryptocurrency is digital money that can be used to make quick and easy payments without having to worry about any outrageous transaction fees.
There are many different forms of cryptocurrency, but most people tend to buy Bitcoin. Bitcoin is by far the most popular form of cryptocurrency and one of the original ones on the market. If you’re curious to know more about cryptocurrency, you are in the right place.
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1. Cryptocurrency Is Not Insured by the Government
Unlike most forms of currency, cryptocurrency is not backed up by any form of government. This means that the value is not determined by the government, but by the people who trade it. However, if your online wallet gets hacked, there isn’t any form of insurance that could help you get your money back.
Lack of governmental influence on cryptocurrency is beneficial because the government doesn’t get to control what this type of currency is worth and who it goes to. There is also no way for the government to collect taxes on cryptocurrency. Decentralized currency can save users against aggressive financial policies and excessive transaction fees, which may also be imposed during times of economic crisis.
Another benefit of this is the fact that you don’t need a bank to have Bitcoin. Instead, your cryptocurrency stays on your computer where it’s safe. All you need is an online wallet that you can protect from hackers with passwords and other operating systems.
2. You Can Use Cryptocurrency to Pay Instantly
Another benefit of cryptocurrency is that you can use it to pay for things right away. Most of the time when you pay for stuff online, you have to wait a few days for the transaction to go through. Your bank has to approve the payment and things have to be running just as smoothly over on the other end.
With cryptocurrency, however, the payment goes through right away so you don’t have to deal with a bunch of pending transactions on your bank statements and risk over-drafting by accident.
Even better, it’s only a matter of time before mainstream businesses start accepting cryptocurrency. In fact, some already have.
3. You Can Make Money From it
The value of cryptocurrency is constantly changing, which means that although you may have purchased it at one price, it could be more valuable the week after. Cryptocurrency works similarly to stocks in that people are constantly buying and selling in the hopes of making the most money possible.
If you do decide to buy Bitcoin or some other form of cryptocurrency, make sure to check and see how the value of it has been fluctuating in the last few months. If you get lucky, you could end up making a decent profit off of it.
4. Cryptocurrency Is Earned Through a Process Called Mining
Despite the name, mining cryptocurrency has nothing to do with digging inside of a cave. Mining cryptocurrency is what happens when miners receive a form of cryptocurrency, typically Bitcoin, as a reward for completing “blocks” of verified transactions, which are then added to the blockchain.
This is not a simple task and only the most technologically inclined people can do this successfully. It involves solving what is essentially a very complex puzzle that requires a GPU (graphics processing unit) or an application-specific integrated circuit (ASIC).
The purpose of mining, aside from the fact that you can earn Bitcoin from it, is to legitimize as well as monitor Bitcoin transactions, which in turn ensures their validity.
5. Transactions Are Anonymous
Cryptocurrency transactions are anonymous, so no one will ever know your identity when using cryptocurrency to buy things. The only information that people will be able to see is the numbers and letters that are associated with your e-wallet.
Sometimes the transaction amount can also be made public. However, your name and other personal information are never revealed.
As you can see, cryptocurrency is incredibly fascinating and has dozens of benefits. It’s more than likely that one day the world will rely only on cryptocurrency as opposed to traditional money.
If you are new to the world of cryptocurrency, be wary of potential scammers when purchasing your cryptocurrency. Do not trust anyone who guarantees that you will make money or that offers you any sort of free money, whether in the form of cryptocurrency or fiat money.
You will also want to be wary of something called “cryptojacking,” which involves a hacker getting into your e-wallet without your permission and stealing your cryptocurrency. The good news is that there are many precautions that you can take to keep this from happening to you.
Be sure to set up an antivirus software which can keep the scammers at bay while also protecting you and your cryptocurrency.