SHARE

It will certainly not have escaped your notice that cryptocurrencies such as Bitcoin are always making headlines. Whilst it would appear that the number of people who are beginning to use any of the thousands of different cryptocurrencies is on the increase, there are still lots of people who have no idea of what they are or what they offer.

As such today I am going to be taking a look at just what cryptocurrencies are, what they have been designed to offer and how you can actively get involved in using them.

First and foremost you need to realise that all cryptocurrencies are decentralised, meaning that there is no government, fiat currency or precious metal or any type of commodity that backs them, and as such their values are purely based on supply and demand.

Cryptocurrencies also use something known as a blockchain, which is layman’s terms is simply a ledger that keeps track of who owns them and also keeps track of all them too, however that is done anonymously as the blockchain does not name who owns any cryptocurrency just the digital wallet that they have been sent to or belong to.

As such with no one in control of cryptocurrencies they offer anyone the ability of sending them to anyone else anonymously and people can use them to pay for goods or services from any retail outlet for example that accepts them.

However, to start using a cryptocurrency you first need to get something known as a digital wallet, once you have one of them you are then going to be able to buy any units of any cryptocurrency which can then be stored in your digital wallet.

The cryptocurrency you buy and store on the blockchain are not physically kept in that digital wallet, as they are stored on the blockchain, so the wallet simply allows you to be identified as the owner of any cryptocurrencies and move them about as you see fit.

To buy cryptocurrencies you need to use the services of a digital currency exchange, and when using one of them once you pay for your chosen cryptocurrency they will then be allocated to you on the blockchain which as mentioned above you can access via your digital wallet.

If you wish to send your cryptocurrencies to anyone else or any company you simply need to know the digital wallet address of that person or company and then use your digital wallet to send them.

To be able to sell cryptocurrencies you once again need to use the services of a digital currency exchange, that will then match up your sell order with someone looking to buy that cryptocurrency and the exchange will then send you the proceeds of that sale to your bank account.

However, when you are using for example Bitcoin you could opt to use a Bitcoin ATM as the way that you turn your Bitcoin into local fiat currency. There are fees and charges that you will be required to pay on top of the spot price of any cryptocurrency you buy, and fees apply also when selling them too.

SHARE