Whether you are new to cryptocurrency or you have heard bits and pieces about it, but want to learn more, we’ve got all you need to know in our new guide “What is Cryptocurrency?”.
Cryptocurrencies
A cryptocurrency is not what you might think of as a currency at all because it is purely digital. It is traded on an exchange and uses blockchain technology to keep it secure. Unlike most currencies, it is not controlled by any central authority like the Bank of England. The whole point of the currency is to create a decentralised form of currency that is outside governmental interference and control.
Transfers
Unlike other currencies, transferring any form of cryptocurrency requires keys, public and private keys. This means that there are minimal to no processing fees and you can transfer your cryptocurrency to other people or between your own wallets.
Keys
Keys are the key to cryptocurrency. There are two types of keys – public and private. As the name suggests, one set is the public key for your wallet to allow transfers to be made to the account. The private keys are the ones that should be kept secret from everyone else. The private keys give you control over the cryptocurrency wallet and mean that you can move the funds out of the account. If you lose your private key or someone else gets hold of your private keys, you will lose access to the wallet, or you could find that the wallet has been emptied into someone else’s wallet. When this happens, you can’t recover the cryptocurrency that you have lost.
Wallets
Wallets are where your cryptocurrency is stored. There are a number of different types of wallet, and you will want to do different things with them. A wallet on an exchange should be used only from trading cryptocurrency. You should only have cryptocurrency in this kind of wallet when you are actively trading. When you have finished, you should always make sure that you transfer your funds to a wallet that is not on the exchange. The best kind of wallet for storage is one on an external hard drive that can be removed from your computer when not in use and therefore disconnected from the internet or an old phone which you turn off when it is not in use.
These types of external storage should be kept safe and have back-ups made for them so that if you lose the storage unit, you can recover the funds. The best thing to do is to keep the external storage in a safety deposit box or in a personal safe. The same is true of the back-up of your wallets. You should also make sure you know how much is in your wallets too.
What to learn more about cryptocurrency? Interested in investing in cryptocurrencies or crypto assets? Contact our professional team of experts today for answers to all your questions and help you get started with cryptocurrencies now.