If you’d like to be the owner of some type of cryptocurrency or you’ve already decided to buy Bitcoin, there are some basic things to know before you get too far. While learning about cryptocurrency isn’t complex, there are still some basics you need to know before you rush out and buy anything.
The bottom line is that cryptocurrency hasn’t been around for that long; therefore, there’s a lot about it that the average person doesn’t know. Nevertheless, it is easy to learn these things, and it all starts with the following bits of information that will help you invest in this unique type of currency.
1. There Are Many Different Types of Cryptocurrency Available
Many people automatically think of Bitcoin when considering which cryptocurrency to buy, but the truth is that there are other types of cryptocurrency besides this one. These include Ethereum, Litecoin, Tezos, Bitcoin Cash, ZCash, and EOS.
Some are similar to Bitcoin while others are quite different, and some of the differences have to do with the technology they use and even features that affect how the value of the coins is transferred. It’s smart to do your due diligence and explore the differences between each type of cryptocurrency so that you end up with the one that’s right for you.
2. Cryptocurrency Is a Lot More Private Than Regular Currency
When you buy Bitcoin or another type of cryptocurrency, you never have to share or provide any unnecessary personal information to the seller of the coins. Not only does this make you feel a lot better about the entire transaction, but it keeps your personal financial information from being shared with third parties, which includes advertisers, banks and other financial institutions, credit rating agencies, and payment services.
It also provides you with another huge advantage: it means that the chances of your financial information being compromised or your identity being stolen is next to nothing.
3. Cryptocurrency Has an Excellent Future
By all reliable accounts, cryptocurrency is here to stay. Many people call cryptocurrency Money 2.0 because it is considered a great alternative to a traditional banking system. There are indeed a lot of advantages over other types of payment methods and more traditional classes of assets.
When you look deeply at the future of crypto in the next 5 years, you will figure out that cryptocurrency has the potential to be the easiest, cheapest, fastest, safest, and the most universal way to exchange value of various products and services. The first cryptocurrency, Bitcoin, has been around since 2008, and it hasn’t seemed to wane in popularity since it came on the scene.
4. It Is Very Simple to Transfer and to Use
Cryptocurrency is not only growing in popularity but is also able to be used in more and more transactions. In the beginning, Bitcoin wasn’t able to be used in too many transactions, but that is starting to change.
Not only is cryptocurrency convenient to use for many types of transactions, but you can also use it to buy things at your local grocery store or pay for something from a company that’s on the other side of the planet. Cryptocurrency is very versatile and can be used to buy all sorts of products and services from anywhere across the globe.
5. There Are Tons of Things That You Can Do with Cryptocurrency
When you decide to buy Bitcoin or another type of cryptocurrency, there is a lot you can do with it. This includes shopping with thousands of global merchants, gifting it to friends and family members, using it as a tip, donating to various causes, or spending it as you travel to various locations.
And the best part is that with each passing day, there are more and more things that people can do with their cryptocurrency. Since cryptocurrency is here to stay and is being used for more and more products and services, this is never a bad investment to make.
6. There Is Less Likelihood of Experiencing Fraud
If you’re a merchant, your chances of being defrauded by a cryptocurrency payment are greatly reduced because unlike credit card payments, these payments cannot be reversed. And since fraud is one of the reasons why credit card companies claim to charge high processing fees, even customers can benefit when using cryptocurrency because it tends to have much lower costs to use it. Simply put, it is cheaper to use cryptocurrency than it is to use credit cards in most instances.
Carolyn Coley is a blockchain reporter. She joined Smartereum after graduating from UC Berkeley in 2018.