Everything you need to know about Cryptocurrencies

Initially hailed a rebellious technology that would upend the world’s financial institutions and free people from the onerous fees and controls of the banking establishment, cryptocurrency has since been tarnished by criminal activity and wild market speculation. And while everyone has heard of crypto names like Bitcoin, very few people understand the fundamentals of how cryptocurrencies actually work — especially in the context of personal finance. Here’s what you need to know to prevent you from getting ripped off, and also help you determine if cryptocurrencies are for you:

What is cryptocurrency?

Cryptocurrency is basically a digital way to hold and transfer value online. You can purchase cryptocurrency tokens or coins online (with a credit card or “traditional” money), and there is typically no one person or bank that controls a particular cryptocurrency. There are dozens of different cryptocurrencies available online, the biggest and most well-known ones being Bitcoin or Ethereum.

The value of any cryptocurrency at any given time depends on supply and demand. There’s usually a fixed amount of any currency available at any given moment, so the more people want to use it, the higher the price. In late 2017, for example, the price of a single Bitcoin soared to roughly $20,000 and then took a drive to around $4,000.

How can I get cryptocurrencies?

It’s relatively easy to purchase most cryptocurrencies — and considerably more difficult to unload them.

Sites like CoinBase are exchanges where you can purchase a variety of digital coins. There are also apps called digital wallets that enable you to keep cryptocurrencies yourself and send funds to others with relative ease. With such a wallet, the private keys (that represent ownership) are stored directly on your device.

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Source: Everything You Need to Know About Cryptocurrencies | Digital Trends