Cryptocurrencies are becoming more mainstream; and with big players like Bitcoin and Ethereum getting the bulk of the media attention, people are forced to take notice of the growth of the cryptocurrency market. Now, more and more people are beginning to understand the benefits of cryptocurrencies including what they are and how to use them, so we are going to discuss the 5 things you need to know about the cryptocurrency market.
#1 – What’s a cryptocurrency?
Cryptocurrencies aren’t physical currency like cold hard cash that we carry round in our wallets, they are merely digital. Unlike regular currencies that are regulated and backed by a government or institution, cryptocurrencies have no central authority that controls the supply or economic policies. Also with cryptocurrencies, when someone pays for something or sends another user some bitcoin for example, there is no need for a third party to step in and validate and authenticate the transaction. This due to its decentralized nature and how they are integrated with blockchain technology. Cryptocurrencies can be used to pay for goods or services, and they can also be traded with.
#2 – What is blockchain technology?
When dealing with the cryptocurrency market, you will quite often here phrases such as “blockchain”, “decentralized” and these are what allow cryptocurrencies to operate an function as an entity outside of the traditional economic sense. Information that is held on a blockchain exists as a shared and continually updated database, there are obvious benefits to a database being stored this way as it isn’t stored in any single location, meaning that all the records it keeps are truly public and can easily be verified. Blockchain is used to facilitate cryptocurrency transactions with the help of miners who add new blocks onto the blockchain with information pertaining to different transactions.
#3 – How do I obtain cryptocurrencies?
Fortunately there are a number of ways this can be done, and this most common method is to use cryptocurrency exchange platforms where you can swap your fiat cash for a plethora of different digital coins. The cryptocurrency market is flooded with countless exchange platforms all competing with each other, and offering different packages in order to entice you. The process can be pretty simple depending on the platform, however there may be some charges involved during the exchange process.
#4 – Are cryptocurrencies anonymous?
At the very start and in the early days cryptocurrencies could be used anonymously, however with the emergence of exchange platforms they are now required by law to obtain details about you such as you name, address, and your face. So the cryptocurrency market is flooded with cryptocurrencies that are touted as being “private” or “anonymous” but you can still be identified. However, that being said, there are a number of privacy based cryptocurrencies that offer a high level of anonymity. There is always the option to mine cryptocurrencies, this way you aren’t buying them from an exchange platform.
#5 – What can I buy with my cryptocurrencies?
People still aren’t sure whether these virtual coins are real money or not, or whether they can be used to purchase items or pay for services, well in turns out you can. Even large companies like Microsoft, Expedia, Shopify, PayPal and Subway all accept a number of different cryptocurrencies as an official method of payment.