Cryptocurrency has been all over the news — and on your social media feeds — but many people don’t really understand what it is or how to use it. In short, it’s a digital money that isn’t tied to any country or company and can be used to make purchases. But it’s also an investment, and its volatile prices can boost or damage your portfolio.
The Value of Crypto
As a medium of exchange, cryptocurrency has the potential to transform global commerce. It allows people to transfer funds quickly and inexpensively across borders, circumventing the need for intermediaries like banks or notaries. In addition, it offers unique opportunities to expand economic freedom in places where government controls are tight.
These features are why the value of cryptocurrencies is increasing. But it’s important to remember that crypto isn’t legal tender in any place, and its value depends on a combination of supply and demand. Supply refers to how many coins exist, while demand is a measure of how much people want to own them. So, it’s important to research and evaluate any cryptocurrency before investing.
Spending Crypto
The most popular form of crypto is Bitcoin, but there are thousands more that explore new ways to process transactions. Some, like Litecoin and Bitcoin Cash, offer a similar experience to Bitcoin but at lower costs, while others, such as Ethereum, can be used to build and run apps. The technology that powers them all is called blockchain, which makes it easy for anyone to verify that a transaction has taken place.
Some people enjoy spending crypto because it gives them a sense of pride in supporting an innovative new system. Others like to give it as a gift, or even tip content creators on social media. However, future regulations may limit which ways you can use crypto, so it’s wise to check out laws in your area before making any investments.
Many online stores now accept crypto, including major names like Overstock and Newegg. You can also buy things like gadgets and handmade items, or book travel on sites like Expedia and CheapAir. Using crypto for payments is also becoming easier around the world, thanks to services like Bitrefill that let you pay at restaurants and coffee shops with Bitcoin.
Investing in crypto is risky and can lose value, so do your research and consider all risks before you decide to buy. You’ll need to create a wallet to store your crypto, and this needs to be safe, secure and private. We recommend that you write down the seed words for your wallet on a piece of paper and store it somewhere safe, as well as choosing an unusual password that you can remember. Then, you’ll need to connect your wallet to an exchange, where you can buy and sell crypto. Make sure you read up on a particular exchange before investing to understand what fees and rules they have in place.