Crypto 101: Its Advantages and How to Buy and Use It
Consider investing in cryptocurrencies as an alternative method for payment. Here are its advantages and how to buy and use this type of money.
Crypto 101: Its Advantages and How to Buy and Use It
It's been more than a decade since cryptocurrencies reached mainstream media. The ‘revolution’ was led by Bitcoin and so many new ones followed. Today, there are over 5760 different cryptos. Each one is unique but they all share a few common traits.
Bitcoin is considered as the first and currently the most successful crypto in the market. Most of the advantages and methods of buying and using that will be covered in this article are true for BTC. However, almost all of the ones created after the year 2009 are either inspired by or designed to be better than Bitcoin. Therefore, these traits are also true for most, if not all.
Advantages of Crypto
Cryptocurrencies have many advantages over normal banking because they are specifically designed to be better. However, not all of them are true for every crypto. The three examples below are the ones that are the most common advantages of crypto over normal money.
- The fees for sending money to another person is cheap no matter the distance. One of the biggest issues of the normal way of sending money is that it can be expensive. This is a problem if the person you want to send money to is far away so you need the help of a company or bank to bring the money to them safely.
- Aside from being inexpensive, many crypto transactions are also faster. Bitcoin is among the slowest but it only takes a maximum of one hour before your money reaches the other person. Other cryptos made after Bitcoin are faster. Some can take half a second up to two seconds only to complete while banks will take days or weeks because of the paperwork.
- Nobody can tell you what you can or cannot do. It can be limiting when banks put a limit to withdrawals and spending. This is a great way to protect people from draining their savings but it can make things more difficult than they need to be. Bitcoin and other crypto operate on automatic platforms so users can safely move their money without too much worry.
- You can remain anonymous when using Bitcoin. Banks and money transfer companies will always ask you for personal information to make an account for security. Crypto, however, only asks for your wallet address.
Step-by-Step Process of Buying Crypto
There was a time when getting a hold of Bitcoin was so difficult - only computer programmers and math geniuses could get them. Today, it can be as easy as online shopping because of various companies making them easier to get. Here is what you need to do to buy crypto:
Get a Wallet and Find Your Address
A wallet is a program that lets you keep track of and use assets. They don’t really store your Bitcoins. The assets you own remain on the blockchain and the wallets simply give you data of how much you own exactly. It also gives you records of the things you’ve done with your money such as when you receive and send your asset.
Wallets are designed to be safe and easy to use. However, there are still cases of robberies. The best way to avoid getting your assets stolen is to keep your private keys away from the internet. ‘Private keys’ are codes that serve as your signature so you can use your crypto.
Hardware wallets are your best option for high-level security because they keep your private keys away from the internet at all times except when finally using them. However, many people don’t think that it is worth buying since they don’t plan on saving up large amounts.
People who only aim to buy and sell cryptos don’t have to hold onto the assets for a long time. They usually opt for a software wallet which can be installed on the phone or desktop. This is free and always comes with user-friendly features.
Whichever wallet you choose, you will have a ‘wallet address’ which is a long line of random numbers and letters. This will serve as the code any sender needs to input to send you their assets. Be sure to avoid mistyping even a single character because crypto sent to the wrong address is impossible to recover.
Choose a Platform to Buy or Sell Cryptos
There are different platforms to buy and sell cryptos. Brokers help connect two people who are looking to trade. The process is quick, easy, and direct so it’s great for beginners. However, this service has a high fee to pay for so it is not popular among economic geniuses. Those who are veteran traders opt for exchanges where they are free to choose their own trading partners.
Buy Cryptos
To buy Bitcoins or other crypto, you must have the correct asset that the other person is asking for. The most popular are fiats such as the US dollar and European euros. Trading crypto for another crypto is also common. Choose a payment method that lets you offer your savings then choose any of the offers on the platforms you’ve chosen.
The assets you bought from a broker are usually saved on that website. This is fine but it doesn’t give you full control over them. You have to withdraw them from your broker/exchange account and deposit them into your wallet using your wallet address.
How to Use Crypto
Cryptos can be sent to another person’s wallet address through your wallet’s interface. Another method includes generating a QR code for somebody to scan. Doing so allows them to ‘take’ the amount of crypto you are offering. When withdrawing your crypto from other websites, you just need to send it to your own wallet address from the site that holds it.
- Cryptocurrencies that are commodities or store-of-value can be sent as a donation or as a direct payment. There are also people who accept payment with tokens so it also depends on your agreement with the other party.
- You may deposit your cryptos into a website such as brokers, exchanges, casinos, and other services that accept them as payments.
- Some blockchains like Ethereum have other features such as voting. Simply holding onto your large savings of ETH gives you priority in that platform. Other networks like the NEM give you the same importance not by saving but by being an active member of the blockchain.
Bottom Line
Many people are intimidated by cryptocurrencies because there are so many things to remember. Others are sceptical because they do not know how to use them. The truth is that it is easy to understand but made complicated by the new words one has to remember. As for its uses, more and more businesses are starting to accept them as payment. It may not replace fiat as Bitcoin’s creators first envisioned but it does appear to be a large part of the global economy now.
Words: Clarence Clarke
