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Cryptocurrency is a currency in a digitalised form that operates on blockchain technology and uses cryptography for security. It is not controlled by any central bank (decentralised) and its value is based on the market demand and supply. Some of the popular cryptocurrencies are Bitcoin , Ethereum , and Litecoin .
Cryptocurrency can be used to buy goods and services, transfer funds, and trade in the market. Bitcoin uses mining which is proof of work to validate and record transactions on a blockchain. Ethereum, the second largest cryptocurrency uses an energy-efficient system called Proof of Stake that relies on network participants to confirm any transactions.
There are several ways to buy Cryptocurrencies including: 1. Brokerage Services: It is a simple crypto trading platform that facilitates selling, buying, and trading. Some of the trusted brokers are Coinbase, Crypto.
com , Cash App, Bisq, etc. 2. Cryptocurrency Exchanges- There are many reliable platforms like Binance, wazirX, Crypto.
com, Kraken, Gemini, and many more for trading with fiat or crypto. 3. Peer-to-Peer (P2P) Marketplaces- Direct trading without third parties such as Crypto.
com DeFi Wallets, Binance P2P, Paxful, BitValve, Bisq, etc. 1. Choose a Platform: Use a trusted crypto brokerage, crypto exchange, or P2P marketplace for the transaction to take place.
2. Create an Account- Sign up by using the personal information and ID verification, aka “Know Your Customer” (KYC) procedures. 3.
Add Funds- Deposit money via bank transfer, card payment, or cryptocurrency transfer to buy crypto. 4. Buy Crypto- Find the Buy section in the mode of platform choose the preferred cryptocurrency, and the amount, and then confirm the purchase.
The crypto will be deposited into the account. It can then be transferred to other crypto wallets or converted back to fiat currency and then paid out to a bank account. 5.
Secure the Crypto- The crypto must be stored in a safe wallet like DeFi Wallet. Trading cryptocurrency is a risky job and it is important to trade what the user can afford to lose. 1.
Pick and Exchange- Use a trusted platform that supports safe trading. 2. Create an Account- Sign up by completing the KYC verification.
3. Deposit Funds- Add money by bank transfers, cards, or crypto. 4.
Select a Trading Pair- Choose the currency pair to trade. 5. Place an Order- Decide to buy or sell by setting the amount and choosing the order type such as market, limit, stop, and crypto options.
6. Execution and Monitoring- Submit the trade order and wait for it to be executed. Then monitor and track its performance in the market and adjust strategies if needed.
1. Select an Exchange- Use a safe and centralised exchange to easily sell and convert the crypto to cash. Popular exchanges include Coinbase, Binance, Kraken, etc.
2. Use a broker- Use a broker platform to easily execute trades and access cash in the bank account. With the introduction of Spot Bitcoin ETFs in 2024, trading through brokers has been simpler through lower fees than crypto exchanges.
3. P2P Platforms- Cryptos can be sold directly to another person via the P2P platforms discussed above. This will allow the sellers to set their rates and choose the payment method.
Many platforms like Binance P2P or Paxful use secured transactions by escrow services until the payment is confirmed. If the exchange does not allow direct conversion to the user’s preferred currency for example dollars, they can trade their crypto for a popular currency like Tether (USDT) only applicable for conversion into dollars. This method sometimes helps cash out the crypto when direct selling is not available.
Cryptocurrency has a decentralised and secure way to transact and store value by using blockchain technology. Whether someone is buying, trading, or selling, it is very important to choose renowned platforms and ensure that the crypto is stored safely. With the market evolving, the user must always be cautious and stay within their risk tolerance.
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