Cryptocurrency became the rage a few years ago when it was invented. Digital currency is used and traded exclusively on the Internet.
This means that the coin is not physical like paper money. People can transfer crypto cash among themselves without a mediator like a bank.
Two of the most popular cryptocurrency is Bitcoin and Ether. However, new cryptocurrencies are created daily since this is something any tech-savvy programmer can make, unlike paper money which the government regulates.
People usually use cryptocurrency to make quick payments and avoid paying transaction fees since it is not regulated by the government, as I stated earlier.
Some people keep cryptocurrency as a form of investment since the price goes up and down, thereby earning them more money.
People buy the cryptocurrency through credit cards, or they can get it through a process known as ‘mining.’Â
Digital Wallet
The cryptocurrency is usually stored in what we call a digital wallet. This is also online and not physically seen.
However, digital wallet apps allow you to keep your cryptocurrency on your phone and not online.
Before you think about purchasing cryptocurrency, you should know that it does not come with the same protections as paper money since the government does not regulate it.
Some scammers also like to take payments in cryptocurrency since they know that such charges cannot be reversed.Â
Cryptocurrency VS. Paper Money
There are many differences between cryptocurrencies and paper money, apart from cryptocurrency being a digital form of money.
The government does not insure cryptos in the same way that money deposited in the bank is.
Due to this, cryptocurrencies do not enjoy any protection from the government as paper money does.
So if you keep your cryptocurrency in a digital wallet made by a particular tech firm and your wallet gets hacked, and you lose the cryptocurrency, they are gone.
There is nothing that the government will be able to do about it for you. Unlike banks where the government can help get your money back if something were to happen, the same cannot be said about cryptocurrencies. Once you lose them, they are gone.
Value
The values of cryptocurrency are prone to constant changes. The value can go up in an hour and then go down the next hour.
If you invest in a cryptocurrency and it is worth thousands of dollars today, the value can quickly go down to hundreds of dollars by the next day.Â
Investing In Cryptocurrencies
Like any other investment out there, before you invest in cryptocurrencies, you should do your research well enough to know about the risks involved and any other things that you will have to know before you invest.
Never jump to invest in a cryptocurrency just because a friend told you that the value has is going up.
And don’t even think about investing in cryptocurrencies if you want to get rich quickly. The lottery will be a better option for you if you are looking to make money in a hurry.
Cryptocurrency investment is something that takes knowledge and time. You can even lose your investment to scammers and hackers if it is not well-guarded.
There are also different types of cryptocurrencies, and each comes with its behavior.
Paying With Cryptocurrencies
If you want to be making payments with cryptocurrency, you should know that they do not have the same protection as paper money or credit and debit cards. However, you can only get your cryptocurrency back if the seller opts to send it back; if not, payments with cryptocurrency are not reversible.
Conclusion
You now have some general information about cryptocurrencies. They are a form of investment, just like forex and stock trading, although they are a little different as they can function as money.
If you are thinking of investing in it, you should make sure that you do thorough research on the particular cryptocurrency you are investing in before you go ahead.
Do not listen to anyone that promises you quick returns. If you aim to get rich quickly, please spend your time and money playing the lottery.Â
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