# Getting Started With Cryptocurrency Basics

In this document, I talk about the basics of cryptocurrency and how it is changing how we spend money and invest.

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### Table of Contents

In this document, I talk about the basics of cryptocurrency and how it is changing the way we spend money and invest.

## Cryptocurrency

So, what is cryptocurrency? It is digital money that is decentralized and intended to be used over the internet. Think of digital money just like any other currency, except there are no bills or coins. There can be debit cards, though, which are tied to your bank account that hold cryptocurrency.

Decentralization is another really important concept. It means there are no banks involved. When you make a debit or credit card transaction, there are often minor charges taken out by the bank that gave you the card. With cryptocurrency, you do not have to pay for this anymore. It lets two people, from anywhere in the world, exchange money with no banks in the middle.

### The Beginnings Cryptocurrency

Bitcoin is the most famous and the first cryptocurrency. It is the largest and most popular digital money. Satoshi Nakamoto supposedly created it. This person is completely anonymous and could even be a group. They created bitcoin with freedom of the internet in mind.

Eventually, other digital coins were created. These include Ether, Litecoin, and XRP. These are not in any order, but just examples of some of the popular ones. They each expanded what they do and added features. Originally, none were as valuable as they are now.

### Security of Cryptocurrency

Security is often a concern when dealing with money. So, they secure most digital money with a blockchain. A blockchain is a digital ledger that keeps track of every transaction in its history. Every computer connected to that constantly checks the blockchain. This makes it pretty safe. You can also think of a blockchain as one huge distributed network. No one person, company, or nation is in charge of it. That is why it is called decentralized.

### Advantages of Cryptocurrency

There are several advantages, which is why it has been so popular. The first major advantage is that it makes it easy to transfer money to anywhere in the world. If you perform a service for someone in China, they can send digital money to you without having to convert it to your nation’s hard currency or pay any bank fees. It is also much, much faster to send than a wire transfer.

Cryptocurrency is private. You do not need to provide a name, address, or your phone number in order to complete a transaction. You keep your financial information hidden from banks, advertisers, and credit agencies. This makes it virtually impossible for your identity to be stolen. How many times has someone stolen your debit card when going through a drive thru somewhere? You don’t have to worry about that when you use cryptocurrency.

Digital money is portable. You don’t have to carry a mound of cash or worry about your credit card being stolen. You just need internet access and then you have access to your money from anywhere in the world. All current phones have internet access, do they not?

Cryptocurrency and the blockchain it is on, is transparent and open for all to see. This means transactions can’t be manipulated or money amounts changed.

Digital transactions like this can’t be reversed. This means it is less likely for merchants to be defrauded.

### Alternative To Banks

Cryptocurrency is the first alternative to banks. This makes it very important because banks have historically controlled all aspects of money and their associated transactions. They make everyone equal and give people the same access, no matter where they are in the world.

What many people do is invest in one or more digital coins and use another for making actual purchases. This is a very effective strategy. As the investments gain in value, you can convert that to the coin that you use for making purchases. The USD coin is a good choice to make purchases with. It mirrored our dollar as close as possible. This makes it a valuable digital currency.

### Investing In Cryptocurrency

There are many opportunities here. Just remember, like with stocks or anything else, only invest in what you are prepared to lose. Many coins are volatile. They go up and down. So, be aware of that. Many people invest in Bitcoin, Ethereum, and many others. Just don’t put everything in crypto so that your portfolio is diverse. That way, if one market goes down, you will have a better chance at being protected. Every market experiences trials.

To invest in cryptocurrency, you normally use an exchange. This is something like FTX, Binance, or Coinbase. At these sites, you just sign up and deposit money into your account to use. This can be digital or regular currency. You then buy a coin that you can hold and sell when you are ready. At first, I would recommend sticking with the popular coins. This is because they will have the largest market cap and thus be safer. Once you buy something, the exchange holds it in your account, but many also let you download it to a personal wallet.

### Conclusion

Cardano, being a third generation blockchain, will likely become more developed and useful. It is already making headway in that direction. Its token, the ADA, has many people looking at it. Since this is a proof of stake platform, it has generated much interest because this helps the environment.

### Conclusion

Cryptocurrency is changing our world. From banking, investing, and spending money, we have options now. These options empower us and the rest of the world. Cryptocurrency gives us freedom without having to rely on governments.

This article was updated on February 23, 2023