There are many great reasons to get started in cryptocurrency. However, people often skip crypto as it can be overwhelming for beginners. Earnity is the world’s first community-based crypto platform and marketplace where members can have conversations, share, earn, and collect crypto together. In this article, Earnity shares a brief guide to cryptocurrency.
A digital payment system in its essence, cryptocurrency is a peer-to-peer system that allows global users to send and receive systems wherever they are in the world. Crypto acts as digital assets that exist in an online database for particular transactions. It runs on blockchain technology, a public digital ledger of transactions, distributing information across certain networks of computer systems. Instead of a single system controlling the public ledger, a decentralized network of computers runs the technology, verifying transactions. According to Earnity, the blockchain technology on which cryptocurrency operates enhances security, privacy, and transparency.
Those looking to get started in cryptocurrency must know that owning digital assets won’t provide them with tangible assets. Rather, owning crypto means keeping a key that enables a global user to transfer a unit of measure from one user to another, minus a middleman. While there are thousands of cryptocurrencies in existence, among the popular are Bitcoin, Ethereum, Ripple, and Litecoin. When purchasing cryptocurrency, a person can choose between two platforms: traditional brokers or cryptocurrency exchanges. Traditional brokers provide the means to buy and sell crypto, including other financial assets. As a result of its lower costs, this platform offers fewer crypto options. Cryptocurrency exchanges provide various cryptocurrencies, account options, and wallet storage.
The terms “cold wallet” and “hot wallet” are used to describe the two different types of crypto storage. A hot wallet is a storage that runs through an online software to secure the private keys to a user’s digital assets. Cold wallets are hardware wallets that depend on offline electronic devices to keep one’s keys safely.