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If you are considering getting into trading crypto, you will be inundated with all sorts of different information. You are going to be looking at a lot of market-specific words that you may not understand, you will be hearing a lot of misconceptions, and you will be learning about market trends that can change very suddenly. It is always a nerve-wracking moment when you jump into a new area, and it can sometimes feel like your questions are a bit, well, obvious. But there are no dumb questions when it comes to crypto, and you need to have a strong understanding of the basics. Here are some of the most commonly asked questions about cryptocurrency answered.
How Does Cryptocurrency Work?
Let’s start with the basics. Cryptocurrency is digital currency, meaning there is no physical equivalent for the coins you buy and sell. It is also decentralized, meaning no banks or national interests are involved when you buy a coin. Instead, a record is kept on the blockchain, where each transaction is recorded.
Is Bitcoin The Only Cryptocurrency?
Far from it. While Bitcoin is still the biggest cryptocurrency out there, and by far the most widely known, many different currencies are available. The next biggest is Ethereum, which has had a lot of interest from a lot of big tech companies ahead of its latest update, the Merge. But beyond these big two there are literally thousands out there. There are some you may have heard of and plenty more you won’t.
Where Do I Buy Cryptocurrency?
If you want to buy crypto coins, then you need to head to a cryptocurrency exchange. Now, there are a lot of different trading platforms out there; some are geared towards expert users while others are more accessible for beginners. It is also worth remembering that some platforms are not available in some countries, so it is always important to double-check. If you are wondering where to buy Bitcoin easily, head over to Paxful. They offer a range of different payment options and compare the prices to get you the best deal.
Is Cryptocurrency Volatile?
In a word, yes. One of the major appeals of trading crypto is that the value often fluctuates wildly, and with the right approach and enough research, you can see some massive gains very quickly. Of course, it is important to remember that the opposite is true and there have been reports of losses in recent months. However, it can and does rebound just as quickly. If you want to deal crypto, you will need to keep your eye on the ball.
Is Cryptocurrency Safe?There has been a lot of concern about online safety in general in the last couple of years. Still, dealing crypto is no more or less inherently unsafe than any other financial transaction that you would do online. But crypto is valuable and desirable, so you will need to take steps to protect yourself. It is worth investing in a hot wallet, which secures your digital currency on your device, and a cold wallet, a removable USB device you can download your coins onto.