It’s been several years now since Bitcoin spread like wildfire across the United States. Since then, there have been numerous stories of people who’ve built a fortune by trading cryptocurrency, and by all appearances, there are many more fortunes to be made. However, if you missed out on the first two crypto cash-ins, you might want to start thinking about getting in the game.
There’s no doubt that cryptocurrency can be difficult to understand for beginners, but the good news is there’s a wealth of knowledge and resources for those who want to learn to trade. One of the main things that have attracted over a hundred million traders from around the world is that anyone can learn how to use and trade digital currency. Whether you’re a beginner or you have been trading for a while, this complete guide will help prepare you for 2021 in the cryptocurrency world.
What is cryptocurrency?
Bitcoin, the first cryptocurrency, was created over a decade ago to make it easier for people to buy and sell goods internationally. You can purchase bitcoins or altcoins using fiat currency and then use the currency to buy products and services from anyone who accepts cryptocurrency as payment.
Cryptocurrency uses blockchain technology to process transactions and ensure their security. Each transaction is put on a ledger that has nodes throughout. These nodes are computers run by users.
Once a transaction is initiated the nodes verify the identity of the parties involved and then verify that the buyer has the funds available to make the purchase. Once a majority of the nodes agree that the transaction is legit, it’s processed, and the transaction is final.
Each node is encrypted using blockchain technology, and every transaction is final. Now, you’re probably wondering how you can purchase crypto, well continue reading.
How do you purchase digital currency?
The simplest way to purchase crypto is on a crypto exchange. An exchange platform is an online market where traders can buy crypto, trade it for fiat money, or swap different currencies. For instance, if you had Bitcoin and wanted to trade it for an altcoin like Ethereum or Litecoin, you could visit an exchange where millions of people from around the world are constantly trading.
Before you make your first Bitcoin transaction, you need a wallet to store your money. There are several types of crypto wallets with differing features, advantages, and weaknesses. Most crypto exchanges, like Binance and Coinbase, offer custodial wallets to traders, but it’s best to have your own private wallet.
Hardware wallets are the most secure of them all. Hardware wallets are physical storage drives that are like mini vaults for digital currency. Whenever you want to buy, sell, or trade currency, you simply plug your hardware wallet into your computer and complete your transaction.
Many people also use software wallets like desktop wallets and mobile wallets. These wallets act like a software program or mobile app depending on the type of device. Desktop wallets are, of course, for PCs and mobile wallets, which are a newer development, are for mobile devices.
Paper wallets are also very safe because your wallet is stored on a piece of paper or a card in the form of a QR code. However, if you lose your paper wallet, anyone who finds it will have instant access to the coins in your paper wallet.
There are plenty of types and brands of wallets, and finding the best fit for your budget and goals can be difficult. You can get some insider info on the best new wallets on the market by checking out CryptoVantage’s Bitcoin wallet reviews.
There are some new crypto credit cards on the way.
Crypto debit cards allow people to spend cryptocurrency as if it were fiat money. It works like a prepaid card by charging fees for transactions and maintenance, but you can use these cards anywhere Visa and Mastercard are accepted and for ATM withdrawals.
Even though crypto credit cards aren’t new, there’s a new wave of crypto credit cards set to hit the market in 2021. These new cards will work the same way a traditional credit card does with the exception being that your cashback rewards come in the form of the cryptocurrency of your choice.
If you’re tired of wishing you would’ve invested in Bitcoin years ago, don’t let 2021 pass you by without trying the crypto market for yourself. There seems to be a pattern with cryptocurrency. It seems like every four years there are two types of people: those who are glad they invested years earlier and those who wish they had. Which one will you be in 2025?