A Cryptocurrency is decentralized digital money, based on blockchain technology. You may be familiar with the most popular versions, Bitcoin and Ethereum, but there are more than 5,000 different cryptocurrencies in circulation, according to CoinLore.
You can use crypto to buy regular goods and services, although many people invest in this digital money s as they would in other assets, like stocks or precious metals. While cryptocurrency is a novel and exciting asset class, purchasing it can be risky as you must take on a fair amount of research to fully understand how each system works.
How Does It Work?
As Forbes states A cryptocurrency is a medium of exchange that is digital, encrypted and decentralized. Unlike the U.S. Dollar or the Euro, there is no central authority that manages and maintains the value of a crypto. Cryptocurrency’s users distribute the tasks via the internet..
That cryptographic proof comes in the form of transactions that are verified and recorded in a form of program called a blockchain.
How Can You Use It?
You can use crypto to make purchases, but it’s not a form of payment with mainstream acceptance quite yet. However payments giant PayPal recently announced the launch of a new service. This will allow customers to buy, hold and sell cryptocurrency from their PayPal accounts.
World wide accepts crypto, you can work around current limitations by exchanging cryptocurrency for gift cards. At eGifter, for instance, you can use Bitcoin to buy gift cards for Dunkin Donuts, Target, Apple and select other retailers and restaurants. You may also be able to load crypto to a debit card to make purchases. In the U.S., you can sign up for the BitPay Card. A debit card that converts crypto assets into dollars for the purchase. However there are fees to order the card and use it for ATM withdrawals, for example.
You may also use crypto as an alternative investment option outside of stocks and bonds. “The best-known crypto, Bitcoin, is a secure, decentralized currency that has become a store of value like gold,” says David Zeiler. A cryptocurrency expert and associate editor for financial news site Money Morning. “Some people even refer to it as ‘digital gold.’”