Crypto or cryptocurrency is an encryption-based digital or virtual currency. It can be named as an intangible asset that one has in his/her name. The nature of crypto is highly volatile; it is inbuilt with higher risks and also is hard to convert into traditional currencies. Currently, more than 1,600 cryptocurrencies are in circulation as per the Coin Market Cap data.
What is Crypto Currency: Crypto, the name, has been taken from its encrypted nature. Also, the fact of the matter is: it works as decentralized money and comes under Blockchain technology.
Apart from this, the emergence of crypto is considered in 2009 and the very first cryptocurrency was named Bitcoin, which is still in the mainstream.
Let’s understand more about crypto ahead.
Types of cryptocurrency
Cryptocurrency can be categorized in different sections not just based on its name; however, it is classified on the basis of its types. To understand the concept better, consider reading the below section.
- Transactional coins: As the term indicates, it is transactional in nature. You can easily make transactions with such cryptocurrencies wherever it is acceptable. Bitcoin remains top in this category.
- Governance: Such kinds of tokens are used for voting purposes in a Blockchain system. For example:
- Security tokens: These tokens are for the ownership of an asset. It’s an essential one and MS Token is a great example of that.
Legitimacy of cryptocurrency: Is it legal?
Having such doubt is valid in the case of cryptocurrency because there’s no organization backing it up for functioning what it does.
Unlike fiat currencies, which are backed up by the government or private institutions, it’s a free or independent currency system that works anonymously, making it difficult to figure out what’s the truth behind it.
However, it cannot be said that crypto is illegal as the European council 2022 released the crypto-Assets regulation in the marketplace. This depicts that crypto is accepted and will create its aura in the coming times.
Meanwhile, the services or products can be bought with the help of conversion of currencies such as cryptocurrency to fiat currency. However, in some places, the use of cryptocurrency is directly possible.
Read Also:- Is Cryptocurrency A Good Investment
Is Cryptocurrency safe?
Although cryptocurrency does not have any government or private institutions to support it, it doesn’t mean it has security issues. Well, crypto is secured with its cryptography security which is safe while transacting funds with others.
However, along with these risks, a lot of other risks are involved to take care of:
Market Manipulation: It is there to feel that market manipulation has been a major concern for the users. This mostly happens due to the influence of either a personality or organizational effect.
Regulatory in danger: Regulatory breakdown can be a major issue as there’s no regulatory body for the crypto exchange. Also, it can cause a price drop or collapse in the crypto market.
Risks of counterparty: As we know that cryptocurrencies are stored in digital or physical wallets, the possible fraud or theft can be fatal to the protection of your cryptocurrency.
Non-reversible transaction: Crypto transactions have got no stoppage once it has been sent. There’s no option one can use to revert the sent transaction. Hence, a focused initiative is likely recommended.
Cryptocurrency for beginners: How to buy crypto?
Users have got a list of options to be helped with buying a Bitcoin without much effort to put in. For this purpose, there are several brokers, Coin base, or payment apps like cash app. Additionally, users can opt for ETFs, Bitcoin trusts, and other such instruments.
Consider two ways to buy cryptocurrency:
- Cryptocurrency exchanges – with cryptocurrency exchange you can buy crypto with the additional benefits of a wallet, interest-bearing account, options in cryptocurrencies, etc.
- Traditional brokers – it is online brokers who offer the facility to buy and sell cryptocurrencies. They offer assets like ETFs, bonds, stocks, and other beneficial choices to choose from.
Few Popular cryptocurrencies:-
You all must have heard about Bitcoin. It is the face of cryptocurrencies and also is the leading currency people know about. In spite of it, Ethereum, Solana, Cardano, Binance Coin are the other popular cryptocurrencies.
How to keep cryptocurrency safe?
In order to keep your crypto assets safe, you need to work on three major things:
- Know How to use it: Where to invest and at which time is the primary focus people should know.
- Know How to protect it: using a cold wallet or hot wallet is necessary. Choose whichever you think is protective enough to keep secure your crypto keys.
- Know How to exchange it with other currency: changing your currency with another such as fiat currency is another crucial step to help protect the currency.
Three major points need to be completed and then you can attain the security for your crypto.
Those who are novices to the crypto world can take out so much valuable information from this guide: What is Crypto Currency? Remember, Bitcoin is a decentralized currency having no support from any financial institution. But, it’s now popular in most parts of the world due to its higher capability to make someone rich overnight. However, it doesn’t always help as many are a victim of this anonymous game.