You’ve heard of cryptocurrency but are unsure what the “fad” is all about. Is it real? Will crypto be around in 20 years? Here we break down the cryptocurrency basics so you can better understand digital currencies and determine if investing in them is right for you.

What Is Cryptocurrency?

Cryptocurrency is a digital form of payment that is used to purchase goods and services. It can also be used as an investment tool, and can be exchanged for other traditional currencies, like cash. For example, one of the most popular cryptocurrencies – Bitcoin – can be sold and then redeemed for cash in the form of USD. What makes cryptocurrency different from the standard currency of a given country is the way in which it is decentralized, meaning how the ledger of transactions is recorded openly over a computerized system for the public to see. Everyone has the ability to see the transactions taking place, however, there is anonymity to each transaction in the form of digital wallet keys, which are long numerical and letter combinations that are not outwardly associated with anyone or anything.

Understanding Digital Wallets

While there are many methods for storing cryptocurrencies, one of the most secure ways to possess a currency is by using an authenticated digital wallet. If you want to purchase a cryptocurrency, you’ll need to have a wallet downloaded for the specific currency you’re interested in, or, you can leave your crypto in the exchange account where you made your purchase. It’s important to understand that leaving your cryptocurrency in your exchange account is less secure than keeping the currency in a digital wallet. Exchange accounts are subject to greater and easier hacking threats than offline digital wallets because digital wallets typically have a higher degree of layered-step verification.

Digital Currency Exchanges

Exchanges are marketplaces where different types of cryptocurrencies are bought and sold. Think of an exchange – such as Gemini Exchange – as a stock market for crypto. Just as you can purchase stocks that are listed on NASDAQ, you can buy cryptocurrencies on different exchanges. Depending on the exchange, you might be able to purchase certain types of cryptocurrencies on one but not another. So if you decide you like a particular cryptocurrency and want to purchase it for investing purposes, you’ll need to find an exchange that hosts the crypto before you can buy the crypto.

Buying And Selling Crypto

While Bitcoin might get the most press, there is a vast ocean of cryptocurrency opportunities at the moment, with seemingly new crypto being minted each day. The key to buying and selling cryptocurrency is research. Most cryptocurrencies that serve an actual purpose are considered more valuable because of their tangible functionality. Cryptocurrencies that are simply a coin or token offering from a company without any practical use other than a way to raise funds for the business are generally not viewed as valuable as those that are powering a new technology or those that are being used to help provide a service to the world.

Starting Your Portfolio With EthereumMax

EthereumMax is a decentralized cryptocurrency that gives holders control of their digital assets without the need for an intermediary. Its self-sufficient and autonomous DeFi community powers a yield based token that provides a 6% distribution of every transaction to existing eMax wallet holders just for owning it. Check out https://ethereummax.org for more information on why EthereumMax is quickly becoming one of the most robust tokens within the crypto ecosystem and set up your eMax wallet to start your cryptocurrency journey today.