Cryptocurrencies are digital currencies designed to work as a medium of exchange through a computer network that is not reliant on any central authority such as a government or central bank. Cryptocurrencies don’t come in physical form, so there are no banknotes or coins like those issued by a country’s central bank. Instead, the records of these digital currencies are stored on a public ledger using blockchain technology.
Online retailers such as Expedia Inc, Microsoft Corp (MSFT), Cryptodeal.ie, Crypto Emporium and Overstock.com Inc except cryptocurrencies. There are more than 100,000 merchants that accept cryptocurrencies, and they include the likes of Amazon and Tesla Motors.
The easiest way to spend your cryptocurrency is through e-commerce and online marketplaces. Many online vendors now accept certain cryptocurrencies and will generally let you know what cryptocurrencies they accept with icons like “Bitcoins accepted here” or logos of particular cryptocurrencies.
Storing your crypto is not so different in principle to storing your cash. If you want to keep your crypto safe and at hand, you can use a wallet, but you can also use a safe!
There are several different types of cryptocurrency wallets, and each has different pros and cons. For example, when you buy your first coins, you will most likely use a crypto exchange like Binance or coinbase. These platforms have their own wallets, and you will initially fund those wallets when buying your cryptocurrency. These wallets are generally safe enough and allow you to access them from anywhere in the world, and because they are on the exchange, they also allow you to sell or swap your cryptocurrencies for cash or other cryptos. The main drawback with these wallets is that they are on the exchange and therefore online and vulnerable to being hacked with the possible loss of all your crypto.
Software wallets are generally more secure than keeping your crypto on an exchange. They are instantly accessible at any time and are controlled entirely by the user. The price you pay for that extra security and control is the need to be fastidious in keeping your private keys safe. The easiest way to lose your crypto is to lose your personal keys and, therefore access to your wallet. Software wallets are also connected to the internet and therefore are vulnerable to hacks.
If it’s safe you’re after then a hardware wallet is the best place to hold your cryptocurrency. Wallets like the Ledger will store your crypto safely offline and away from hackers and malware. These wallets are safe and effective but require the user to hold their currency in the physical space, so while they are the safest way to store your cryptocurrency, they too are vulnerable to dangers in the physical world, loss or damage of your hardware wallet is just as much a danger to your portfolio as a hacker stealing your coins!
Cryptocurrencies have been blasted into the mainstream in the last two years, which is incredible when you consider just how recent these currencies have been around. It’s great to see more and more retail and vendors accepting these currencies as the space grows and grows. Crypto is here to stay, but not all coins are made equally; the cream rises to the top! There are thousands of coins out there, and it’s not likely that they all have a bright future, so choose your coins wisely!