The talk of cryptocurrency slowly emerging to be the one form of currency, that is causing havoc in the financial arena, has been doing the rounds for a pretty long time now. Initially, most of it was majorly in theory, after which came to a point when a very select few began investing in cryptocurrency. The scenario has changed now and a growing number of people are taking interest in this digital form of currency. But how much do we actually know about how cryptocurrency exactly works?
The basic technicalities
A ledger completely digital in nature and open to public viewing and verifying, this mechanism is quite attractive as far as serious financing is concerned, because of nothing but its sheer quality of transparency. Here is where dealing in cryptocurrency is by default, safe in nature, free from petty scams and frauds. The transactions along with your personal information, won’t be observed by any bank or organization since cryptocurrency is just a peer-to-peer technology and no one else other than the sender and the receiver of the money is involved.
The prerequisites to start investing
There are a number of cryptocurrencies available in the market. You need a working cell phone and an internet connection to start off. Making an account for your profile on a particular cryptocurrency system is free of cost, but to start trading, a nominal initial fee is charged. According to various statistics collected over a period of time, those who invested even a small amount in cryptocurrency during 2012, have now got returns worth millions of dollars. The value of cryptocurrency skyrocketing in the recent few years is indeed a trend. For more information, you can visit the official website
Cryptocurrency wallets and trading platforms – Getting started
There are a number of online cryptocurrency trading platforms, where a wallet is linked to your account from where you can access your digital money. But what is a wallet and how does it work?
You can store, as well as retrieve your digital money through a cryptocurrency wallet. Once you lay your hands on a particular cryptocurrency, you can use your wallet to carry out transactions. Most wallets are compatible with more than one type of cryptocurrency. It is just like a cell phone or a computer app that you have to use in order to begin trading. The ledger is updated on a system of blockchain, where information is stored in small pockets of memory, keeping your identity anonymous, during a transaction.
Some of the established cryptocurrency trading wallets that you can try out are:
- Binance chain (BNB)
- Paxful Wallet
What to keep in mind while using online crypto-trading platforms?
Though the fact that cryptocurrency is a decentralized mode of currency, and it has a couple of advantages like transparency or the scope of getting huge returns, it still has certain areas which need extra attention from your side. Let us see why.
Most of the crypto-wallets need far more updated terms regarding their privacy and security policies. This is because even if everything remains anonymous on the ledger, you still are putting in a lot of information on the website such as, your bank account details, credit/debit card details and of course the amount of cryptocurrency that you own in that particular account.
The problem is not only with startup companies, but the same goes for big, established platforms, and there always remains a chance of your personal information going to the hands of unlawful people. It is also important to remain extra cautious since you are dealing with a good volume of financial assets.
How can these platforms combat cyber threat?
- Introducing short session time-outs during transactions
- Continuous update of privacy and security policies, in response to new threats
- Twin authentication for every transaction and log-in procedures
- End-to-end encryption mandatory for all wallets to carry out transactions
Choosing a wallet minutely for your crypto-exchanges is a must. While cryptocurrency looks like an alluring option to invest in, being sound about every aspect related to it is also mandatory.