Are you ready to invest in some crypto? Are you curious about the hype? The concept of digital money might sound appealing.
Cryptocurrencies like Bitcoin have skyrocketed in value and popularity. A lot of people are buying in and cashing out. But some traditional venues are still hesitant to fully support cashless currencies.
Some people are using crypto as an investment strategy. Still, others are buying and trading it.
Many people aren’t sure exactly how they can use cryptocurrency once they buy it. You can buy, sell, make purchases, and cash out Bitcoin and currencies like it. Keep reading to find out how.
What is cryptocurrency?
Cryptocurrency is digital money. It’s created, or mined, using a blockchain system.
Traditional (or fiat) currency is held, traded, and tied to centralized institutions. For instance, the Federal Reserve regulates US Dollars. Banks and financial institutions work within these regulations to invest and manage US Dollars.
With Cryptocurrency, there’s no centralized entity. Some cryptocurrencies, like Bitcoin, have a predetermined limit. Once that limit has been reached, no more Bitcoin can be made.
Each cryptocurrency has its own set of rules and limits. Governments can (and do) regulate it, but anyone can make it.
How are cryptocurrencies made?
As mentioned above, most digital currencies are made (or mined), bought, and sold, using blockchain technology. Blockchain is a digital ledger that shows all currency transactions.
Once something is recorded via blockchain, it’s near impossible to change. Blockchain is decentralized, meaning not controlled by any government or organization. Anyone can access the blockchain, making it very difficult to hack.
Why is cryptocurrency popular?
So what’s the big deal about crypto? Why are digital currencies getting so much attention? Here are a few reasons.
It’s new
Like anything new, cryptocurrency is interesting. Many people like the idea of being a part of a new kind of currency. Others see it as a long-term investment.
Many cryptocurrency enthusiasts see blockchain technology as the future of currency. Who doesn’t want to be a part of something new and exciting, right?
Bitcoin took off
In 2008, Satoshi Nakatamo published a white paper outlining his vision for a “peer-to-peer version of electronic cash”. Since its 2009 roll-out, Bitcoin has been controversial and successful.
In 2019, Bakkt made it possible to sell Bitcoin futures. This makes it appealing to a wider audience.
Like any cryptocurrency, its value is tied to demand, which can rise and fall. However, Bitcoin is still the undisputed king of crypto. Bitcoin’s success has allowed other cryptocurrencies to catch the eye of curious investors as well.
Easy to move
If you’ve ever made international purchases, you know there are fees involved. Not with most cryptocurrencies. The fact that it isn’t tied to any one institution means the money is easier to move around.
Depending on the currency, it’s probably faster than traditional bank transactions as well. Bitcoin can be a little slow due to its blockchain technology.
Other cryptocurrencies have found ways to speed up their process. That means there’s no waiting until Monday morning for your transaction to go through.
It’s inflation-proof
The US Dollar was created over 200 years ago. Until the early 70’s it was backed by precious metals. Meaning every dollar’s value was accounted for by precious metal.
Fiat currencies are susceptible to inflation. Their values ebb and flow with their government or ownership entity’s economic changes.
Digital currency isn’t created by a specific country or government. Its value fluctuation isn’t dependent on political changes in any given country. Governments can regulate its use, but they can’t determine its value.
As the US Dollar loses value with inflation, cryptocurrencies’ values are mostly driven by demand. Cryptocurrencies certainly could be backed by assets. It’s just not commonplace at the moment.
It’s secure
Buying, selling, and spending cryptocurrency is very secure. There’s usually no need to give your personal information each time you spend it. Once you’ve set up your wallet, you can buy, sell, and spend using a QR code.
Unless you lose or give away your digital key, it’s very difficult for a third party to hack your account. Much more difficult than stealing paper money or debit cards.
Unfortunately, no currency is bullet-proof. In August of 2021, hackers stole $600 million from the PolyNetwork platform. With all of its benefits, digital money can still be stolen.
What are the most popular cryptocurrencies?
Bitcoin definitely got the ball rolling for cryptocurrencies. Many experts are lauding Ethereum for making crypto accessible to laypeople (read: not tech experts).To date, there are over 1,000 other types of cryptocurrencies or altcoins.
According to Investopedia, these are the top cryptocurrencies as of September 2021.
Bitcoin
No surprises here, it’s still number one. This crypto king that started it all has come a long way since its inception. In the beginning, only those who knew how to mine Bitcoin could buy it. Today, Bitcoin is available to anyone who has a digital wallet and enough funds.
Bitcoin has a cap on how much can be made. No more than 21 million Bitcoin can be mined. There are 18.5 million Bitcoins in existence.
Bitcoin’s value rises and falls with media coverage, fiat inflation, and demand. When Bitcoin does well, so do altcoins. When Bitcoin’s value drops it affects other types of crypto as well.
Ethereum
Ethereum is easily second to Bitcoin in popularity. It’s also decentralized in nature. This means it isn’t tied to a centralized bank or government.
By using smart contracts, Ethereum is available to those who may not have access to a state ID or other traditional forms of ID. This makes it available to a wider group of people.
Ethereum runs on cryptographic tokens called ether. Ethereum has its own platform and specific ways to move around within the platform. This has been appealing to developers who want access to applications within the platform.
Since its 2015 inception, Ethereum has undergone many refinements. It is currently running on a Proof of Stake network.
Cardano
Cardano is an altcoin based on extensive research. Its blockchain is the product of this research and creators have published many papers about its success.
Cardano’sblockchain is also decentralized and similar to Ethereum. However, it claims to be faster and more secure.
Cardano’s creators have their sights set high. They hope to be the world’s financial operating system.
Team Cardano also hopes to use its blockchain technology to find solutions for voter fraud and legal contact tracing. As of Sept 2021, one ADA (Cardano’s currency) trades for about $2.50.
Litecoin
Launched by a former Google engineer in 2011, Litecoin is similar to Bitcoin. Litecoin is also decentralized. It’s part of a larger global network.
Litecoin operates using script technology. This allows it to generate faster so users don’t have to wait as long for transactions.
Litecoin is sometimes called the silver to Bitcoin’s gold. As of Sept 2021, one Litecoin token is worth about $190.00.
How do I make cryptocurrency purchases?
In order to buy or sell any Bitcoin or any Altcoins, you need a trusted platform. Before making a Bitcoin purchase, verify the site you’re on is legitimate. According to Bitcoinregs.org, here are some platforms you can trust.
- Kraken
- Bitstamp
- OkCoin
- Plus500
- eToro
- CoinBase
- LocalBitcoin
- Bisq
- Paxful
Once you’ve found a trusted site, you can get started with a cryptocurrency wallet.
Bitcoin wallet
There are many types of digital wallets. For purposes of simplicity, here’s a look at what Bitcoin has.
In order to do anything with your Bitcoin, you need to download their digital wallet. You can buy, sell, or save your Bitcoin in your wallet.
You will also be given a key. This key is literally your key to your funds. If you lose it, you won’t have access to your Bitcoin anymore. So, as you can imagine, it’s important to keep your key in a secure location.
If someone else gets the key, they also get your Bitcoin.
Some people purchase wallets that can be used offline. These are similar to external hard drives. No matter how you store it, be sure your key is secure.
Using bitcoin
How you use Bitcoin is dependent on where and what you’d like to do. If you’d like to make a purchase using Bitcoin through Paypal, for example, you may do so. You can also buy more Bitcoin using Paypal.
However, you may have to wait a certain amount of time. There could also be fees involved depending on where you’re trying to spend your funds.
Cryptocurrency debit cards
These operate much like traditional debit cards. Crypto debit cards make it easier to spend your crypto at retail stores. It may also be easier to make online purchases using a debit card rather than your digital wallet.
These physical debit cards are accepted just like a Visa or Mastercard. Here’s a list of some Bitcoin debit card providers.
- Xapo
- CoinsBank
- Shift Card
- Cryptopay.me
- SpectroCoin
- Coinizy
- Wirex
- Bitstampd
- Uquid
- TenX
- SathoshiTango
Some of these allow you to buy and transfer to a debit card. Others will do both.
Where can I use cryptocurrency?
Just like fiat, digital currencies can be used for more than just retail purchases. Here are a few ways people are using their Bitcoin and Altcoins instead of paper money.
Retail
More and more retailers are jumping on the Bitcoin bandwagon. As of September 2021, here is a list of retailers who currently accept some form of cryptocurrency.
- Baskin Robbins
- Whole Foods
- GameStop
- Crate & Barrel
- Starbucks
- Overstock
- Home Depot
- Microsoft
- Bed, Bath, & Beyond
- Nordstrom
- Lowe’s
- Express
- Ulta
- Regal Cinemas
- Pizza for Coins
- Fancy.com
- Expedia
- New Egg
- eGifter
- Donate to Bitcoin to Save the Children
As mentioned above, Paypal also allows you to make a purchase with Bitcoin. Imagine how long this list will be in five years?
Shopify, Square, and Stripe also process Bitcoin payments. This may make it easier to use Bitcoin for retail.
Trading
You’ve heard of day trading. Some people make money riding the cryptocurrency markets.
The values of different digital currencies are frequently changing. By buying low and selling high, you could make a profit.
Gambling
Yes, you can find gambling sites online that deal in crypto. However, it pays to proceed with caution. There are fraudulent sites that claim to be Bitcoin-friendly.
Sites like Wild Tornado Casino follow legal regulations. You can play from the US or Europe.
Can I cash out?
Companies like Byte Federal are streamlining the Bitcoin-to-cash and cash-to-bitcoin processes. How? With a Bitcoin ATM.
Bitcoin ATMs allow users to buy Bitcoin. These ATMs also help Bitcoin holders turn their crypto to cash on the spot.
What is a bitcoin ATM?
The exact process varies from brand to brand. All cryptocurrency ATMs need personal ID verification and a digital wallet.
ATM Users are first asked to enter some kind of identifying info. This is usually a phone number. Prompts are sent to the phone to verify the person is who they claim to be.
Most will also want customer KYC, which is another way to confirm identity.
Next, you’ll be asked to choose an action. If they’d like to buy Bitcoin, you can insert cash to do so. You will be met with a QR code which is proof of the transaction.
If you decide to sell Bitcoin, take funds from your digital wallet and transfer using the QR code generated by the ATM.
Some Bitcoin ATMs also take Bitcoin debit cards. These operate much like traditional ATMs.
Where can I find bitcoin ATMs?
Bitcoin ATMs can be found wherever traditional ATMs are found. You might see them at financial institutions, casinos, movie theaters, or retail centers.
Bitcoin ATMs make it easier for currency holders to use their Bitcoin in day-to-day life. It also helps make Bitcoin more accessible to new consumers and easier to buy.
The many uses of cryptocurrencies
Bitcoin, Ethereum, and other crypto coins are growing in popularity and number. Consumers are finding advantages in their decentralized platforms and security.
With growth comes opportunity. Slowly, retailers and other businesses are finding merits in accepting Bitcoin and other cryptocurrencies.
While new and exciting, these currencies are still rather volatile. Only time will tell if cryptocurrencies are a fad or the new wave of currency.
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