A cryptocurrency is a form of virtual currency. For security purposes, it uses cryptography. Bitcoin was the first cryptocurrency introduced.
One unique feature of cryptocurrency is that it is very hard to counterfeit. Transactions of buying and selling are possible with ease, without the need of paying fees to banks or any other exchange institutions. Since cryptocurrency is not issued by the government or some other official authority, it is immune to any sort of manipulation.
Cryptocurrency has the following properties:
- The transactions are completely irreversible. This gives rise to a risk factor that if you send money to someone by mistake, or in case of hacking, the action cannot be changed as there is no safety net.
- The accounts or the transactions have no connection with the real world. So we can say that the whole procedure is pseudonymous.
- Transactions are processed and confirmed in a short period of time. It doesn’t matter where you want to send money, the transactions are always super fast.
- The system of exchange is secured by cryptography. The strength of this security system makes it almost impossible for anyone to break in.
- Anyone can use cryptocurrency. All you have to do is download and install software, then you can send and receive cryptocurrencies anywhere, anytime.
Current crypto market conditions
The market is highly volatile in 2020. You might gain a fortune one second, and lose it all in the very next. It does not matter what coins you are trading in, the market conditions are always unpredictable and highly dynamic.
The main reason for this extreme volatility is that people do not have the ability to spend the cryptocurrency on goods and services in the real world. This is also the reason why more people are more or less hesitant to enter the market.
Another reason for the volatility is speculation.
Hence, the cryptocurrency market has its own limitations. Despite the secure system, people have a lot to lose.
How to use cryptocurrency
In order to start trading in cryptocurrency, you need to get yourself a cryptocurrency wallet and a cryptocurrency exchange. Your wallet will be the place where you have all your encrypted passwords stored, while the exchange you choose is like the currency.
After getting this done, you need to fill up a form and wait for the transaction to process and verify themselves. Other than buying and selling the cryptocurrency, you can also try investing. In general, the new investors in the virtual market have the option to choose between the GBTC trust traded in the stock market, a cryptocurrency IRA, and exchange to purchase coins on, in addition to a wallet where you can store coins.
You should know the following things before start trading in cryptocurrency.
- The cryptocurrency exchange does not constitute the regular stock exchange.
- Trading in cryptocurrency is a 24-hour market, while the traditional stock market isn’t.
- Beginners are advised to trade cryptocurrency stocks in a market that owns Bitcoins and trades in shares of it.
- Coinbase is definitely the simplest place where you can sell, buy and store coins.
- The market is pretty much volatile.
- Transparency: Once the transaction is completed, all its details are recorded in an online ledger known as a blockchain. This information once recorded cannot be deleted. Since it is a public ledger, the information can be reviewed by anyone at any time. This ensures complete transparency.
- Portability: There is a high degree of portability in cryptocurrency. Large amounts of money in physical terms cannot be carried easily without risk. There is no such problem in the case of cryptocurrency. Inflation is unlikely: In the case of traditional currencies, inflation takes place often, because of the shift in price in the economy. Because of this, the government keeps on printing new currency.
However, cryptocurrency does not experience inflation as there are only finite numbers of coins available.
- Complexity: Presently, not many people are properly educated about cryptocurrency. They are not informed of how this technology actually works. There is also a lack of sense of security in some people who are even aware of it. Presently, even the numbers of firms accepting these as a form of payment are very few.
- Cannot be recovered if lost: Traditional institutions like banks and other exchange institutions have you covered in case any hacking or stealing takes place. There is no such security available in the case of cryptocurrency. The encryption available identifies only the currency, not the owner. Hence, the one who has the codes owns the currency. And because of this, if the coins get stolen, It cannot be recovered.
- Transactions cannot be traced: This feature enables criminal transactions and unscrupulous activities to be undertaken. As the transactions are untraceable, governments in some countries have banned the use of cryptocurrencies.
- Market fluctuations may take place: The market prices are subject to dynamic changes. If you want to invest in cryptocurrency, think of it as a long-term investment, so if market fluctuations take place, you do not have to be worried.
Is it a scam?
As such, it cannot be termed as a scam. Some scams have been reported in recent times, but because of this, we should not blame the whole system. There are definitely illegal activities taking place in terms of cryptocurrencies, but in general, cryptocurrency is a step ahead in the modern world.
Since there is always a sense of uncertainty, be prepared to lose every single penny you invest in cryptocurrency. Before investing in coins, it is advisable that you read about the history and statistics of it and then make an informed decision.
Hence, we can say that the key to safe transactions in terms of cryptocurrency is thorough and continuous research. If you don’t do this, you will become a victim of fraud. So if you decide to invest huge amounts, be sure of what you are doing.
Reviews of crypto users
Following are the reviews of some popular cryptocurrency exchanges:
According to users, this is the safest of all the exchanges. Being the largest of all, Coinbase eases the process of first-time buyers to purchase coins. The time to take to send or receive bitcoins varies from country to country, but the overall functioning of the exchange is quite satisfactory.
This one offers the most privacy to the users. Another advantage is that there are various payment methods you can choose from. One con that keeps the users hesitant from using this exchange is the fact that many scams have been reported. Also, the fee charged is pretty high.
Users have found the fees for buying a credit/debit card very high. But this drawback is compensated by the super fast and highly responsive customer support service. Also, the limit for purchasing bitcoins with cards is placed quite high.
Wall of Coins:
The biggest advantage is that there is no particular limit set on buying the coins. Also, the only information required by you to buy bitcoins is your phone number. The delivery speed of coins entirely depends on how fast the seller confirms the payment- this being a drawback of the exchange.