Are you a crypto newbie?
Are you a Crypto Newbie? To help you start I have written this article. Have a read.
Here are some questions that you probably have.
1. What is cryptocurrency?
2. How to buy Crypto?
3. How do I stay secure?
What is cryptocurrency?
Cryptocurrency is a type of payment that is used on the internet to buy goods and services. There are companies that have produced their own cryptocurrency and these cryptos are used to purchase their own goods and services. As the crypto space develops further it is becoming clear that people are now using Bitcoin and Ethereum to store some of their wealth – you could say the Digital Gold and Digital Silver of crypto.
Blockchain is the technology of cryptocurrencies. Blockchain technology is a decentralised technology. Decentralisation is the idea of taking power and authority from one source and sharing it with everyone spread across many computers that manage and records the transactions. The balances and the transactions are held by everyone across the network/internet. This Decentralisation is part of the appeal giving it total security.
How to buy Cryptocurrency’s?
To buy cryptocurrency you need a wallet. There are two main kinds, software/virtual or hardware. The hardware wallet is the most secure with the added cost of buying the hardware which is usually in the form of an electronic device. This device does not connect to the Internet and uses a random number generator to generate public and private keys, storing them in the device. If you were to store a large part of your wealth in crypto keeping it in a hardware wallet is the most secure. Blockchain technology itself is very secure. However, computers and phones and the internet can be insecure.
The software wallet comes in two main types, a wallet with a private key and a login and a wallet that just provides a login, the private key used is not yours.
The wallet that provides you with a private key/back up key is the most secure of the two. Backup keys usually are a 12-word key; the twelve-word private key also allows you to move your wallet to different wallet “holders” if needed. When going through a security protocol you are usually asked for example what is the 12th word and what is the 5th word of your backup key.
Once you have your wallet you can buy and sell crypto on a trading Exchange. Some of these exchanges have their own wallets but most will be compatible with your wallet.
All crypto transactions carry a fee.
How do I stay secure?
It pays to put a little effort into how you manage your cryptocurrency. Use a hardware wallet for large holdings. Hold small amounts in software/virtual wallets.
Blockchain technology itself is very secure. However, computers and phones and the internet as you know can be hacked. Secure these points of entry. It’s essential for anyone interested in owning cryptocurrency to learn about safe storage and the concepts of both hot and cold wallets.
2. Use 32+ digit passwords, password creator programs that create a mix of letters and digits and also use a password manager such as LastPass.
3. Setup Two-Factor Authentication (2FA)
4. Install an Authenticator app on your phone.
5. Use a VPN – Virtual Private Network – I use the Windscribe VPN – click here to find out more.
What do I use?
I use the Binance app on my phone for purchasing cryptocurrencies I then send them either to my Nano S hardware wallet(read my post on it here) or the TRUST app on my phone, both of these are decentralised and I own the keys to the wallets.
Please note Binance is a centralised business meaning you don’t own the keys to your cryptos, if it collapsed it’s likely you would lose your coins.
I have installed an app called UPHOLD on my phone. The selling point of this app is that you can transact “Anything To Anything”. A scenario could be you brought BITCOIN and then swapped it for ETHEREUM then you swapped it for a fractional share of APPLE. I like this app because of the simplicity of the transaction, it’s very user-friendly. I use this app to buy small amounts of small/new/unknown crypto, to see if they increase as an investment and for buying into shares. Swapping crypto is done very simply. UPHOLD is a centralised app as well.
If you have any questions, please let me know in the comments below.
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