What is crypto currency and how does it work?

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We can say that crypto currency is a type of digital payment that does not include banks for transactions. We cannot carry it like physical money because the payment in crypto currency payments exists digitally. When you transfer the crypto currency funds, all the transactions are recorded in the public ledger. Advanced coding is used in storing and transmitting the data from wallets to public figures. The main aim of encryption is to provide safety and security.

The value is stored in the digital wallet which is created when you make an account. Owning a crypto currency means that you do not own anything tangible. Basically what you own is a key that allows you to move a record from one person to another without a trusted third party.

How does crypto currency works?

As discussed earlier that crypto currency runs on a distributed ledger which is called the block chain, a record of all transactions updated and held by the currency holders. Its units are created through mining in which computer power is used t solve complicated mathematical problems that create coins. A user can also buy currencies from different brokers and then spend them by using cryptographic wallets.

Different important cryptocurrencies 

Here is a list of the most important cryptocurrencies that are trending.

Bitcoin 

Bitcoin is the oldest and the most commonly traded type of crypto currency and it was founded in 2009. It was the first decentralized crypto currency that offers transactions using its block chain technology. Bitcoin has proved that it is a valuable value storage asset. That is the reason that some people compare it with gold. To purchase a bitcoin you must add a bank account, debit card, or credit card. If you want the fastest way to buy bitcoin instantly Canada you can easily do it through a trusted online exchange.

Ethereum 

The most popular currency after bitcoin is ethereum which was developed in 2015. Ethereum is a blockchain platform with its cryptocurrency. Many people think that ethereum is more important than bitcoin but that’s not true. Bitcoin’s market cap now exceeds $1 trillion and ethereum only has a market value of $450 billion. The total market value of all cryptocurrencies is $2.5 trillion so bitcoin is the most important cryptocurrency.

Litecoin 

Litecoin was made to use for cheaper transactions so they can be efficient for everyday use. In comparison, bitcoin can be used for long-term purposes. The reason to invest in litecoin is that it is cheaper than other top-performing currencies. Litecoin can experience the same increase in value as bitcoin in the right marketing conditions.

How you can buy cryptocurrency? 

The question that may arise in your mind is that how we can buy cryptocurrency? There are three steps for buying a cryptocurrency.

First step: choosing a platform 

The first step is to choose the platform from where you can buy it. Generally, you can choose between a traditional broker and cryptocurrency exchanges. Traditional brokers are online brokers who offer different ways to buy and sell cryptocurrency. A platform like this tends to offer low trading costs but fewer crypto features.

There are many cryptocurrency exchanges that you can choose from because each offers different currencies, wallet storage, and interest-bearing account options. Some exchanges charge asset-based fees. When you are comparing different platforms check about what fees they charge, security features, storage, and withdrawal options.

Second step: funding the account 

 Once you have chosen your platform the next step is the funding of your account so you can begin your trade. Most of the exchanges allow us to purchase crypto using government-issued currencies such as US Dollars or British pounds. If you are purchasing crypto through credit cards then it can be risky. Some exchanges also don’t support it because some companies don’t allow crypto transactions.

Step 3: Placing the order

You can easily place an order by using your broker or exchange’s web. If you are planning to buy you can do so by selecting buy and choosing the order type, entering the amount of currency which you want to purchase, and then confirming the order. The same thing applies to the sell option. There are also some other ways to invest in crypto. Payment services like PayPal, Cash App, and Venmo allow you to purchase and sell cryptocurrency.

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