Answering the Top 5 Questions on Cryptocurrencies

Cryptocurrency is a medium of exchange that exists virtually, i.e. in the digital world. What makes cryptocurrency different from real money formally called fiat currency is that it is not controlled or regulated by a centralized system or authority. Instead, cryptocurrencies run on a distributed public ledger called Blockchain. Blockchain maintains a record of the distribution of cryptocurrency.

1. Which are the world’s most popular cryptocurrencies?

Top five global cryptos:

Bitcoin
Binance Coin
Cardano
Ethereum
Tether

2. What is mining of cryptocurrency?

In cryptocurrency, the term mining is used to refer to the release of new crypto units in the world. It also includes validating its transaction on a blockchain so that it is a part of a distributed public ledger. This entire task is not as easy as it may sound.

Mining cryptocurrencies involves solving complex cryptographic mathematical equations. This requires computers with certain specifications and a stable internet connection. Mining of cryptocurrencies has only become more complex over time because of increased difficulty levels.

3. Is it possible to use cryptocurrency for making purchases?

Yes, cryptocurrency can be used to make purchases online. Cryptos have not found mass acceptance yet. Having mentioned this, bitcoins have found acceptance with top online stores.

Top five companies that accept bitcoin payments:

Microsoft
Expedia
eGifter
Shopify
Overstock

4. How can one invest in cryptocurrency?

Investing in cryptocurrency has become simpler with time. Use the steps given below to invest in cryptos if you are a novice:

1: Evaluate your options

The cryptocurrency one chooses to invest in depends on their requirement and gestation period. While conducting research on various cryptos one may come across many other cryptocurrencies apart from the most popular bitcoin. All these other cryptos are often categorized as altcoins.

While deciding which cryptocurrency to invest in, it is also important to keep in mind the specific mining and management process of that crypto.

Step 2: Choose a broker

A new investor must first choose a brokerage firm that deals with the trading of cryptocurrencies. While selecting a brokerage firm to start investment in cryptocurrencies, one must find out about the kinds of cryptos available with that firm for purchase and exchange as well as the fees levied by them per transaction.

Typically, most brokerage firms charge anywhere between 0.1% to 1% of the total trade value as fees for the transaction made via them.

Step 3: Purchasing and storing cryptocurrency

Most popular cryptocurrencies allow investors to make purchases in U.S. dollars. Tether exchanges can be understood by making sense of DOT USDT trading trends. Some cryptos also require purchases to be made in lieu of payments being made in other cryptos such as bitcoins.

Unlike fiat currency, there are no physical notes or coins one can store in the case of cryptocurrencies. Purchased cryptocurrencies can be maintained in digital wallets. Most brokerage firms allowing trade in cryptos provide wallet services as well.

5. Is it wise to invest in cryptocurrency?

Financial experts do not unanimously support or discredit cryptos. But while planning to invest in cryptos one must remember that the crypto market is a highly volatile and speculative one. One’s investment in cryptos should be decided by the amount one can readily let go of in their portfolio as this market is yet not well-recognized.