Cryptocurrencies are no longer just a hobby for a narrow circle of tech-savvy people. They have turned into a full-fledged investment and financial instrument that is suitable for paying for goods on an equal basis with using Visa and Mastercard cards. This article is devoted to the principles of cryptocurrencies and how to buy cryptocurrencies. You can learn more about modern financial solutions on Rates – exchange rates platform with a lot of valuable information about fiat money, cryptocurrency, and payment services.
What Is Cryptocurrency?
Cryptocurrency is digital or virtual money that works based on encryption and information security methods. The main feature of cryptocurrency is complete decentralization. It is not tied to any emission center or regulator.
Unlike fiat or electronic money issued by states and banks, digital currency exists exclusively in the digital space. She has no material embodiment. This is simply unique data in the blockchain system. Thanks to encryption, this data is protected from tampering and modification. Transactions on the blockchain are transparent and irreversible.
Best Ways to Buy Cryptocurrencies
One of the key technologies of cryptocurrency is blockchain. This is a distributed database that stores information about all transactions on the network in encrypted form. Each block of the chain is connected to the previous one using cryptography. This allows you to track your entire transaction history and avoid double-spending. The blockchain code cannot be changed as it is securely protected.
Unlike traditional payment systems, blockchain does not have a single control center. The cryptocurrency network is decentralized – it is supported by miner computers around the world. The issue of new coins is also distributed among the participants. Such a system is completely independent of any regulators or states. Therefore, transactions with cryptocurrencies can be carried out all over the world, whether you are in Chicago (USA) or a city on the other side of the world, in Tokyo (Japan). Boundaries don’t matter here. At the same time, the confidentiality of the data of transaction participants is guaranteed by cryptography.
At the moment, there are already more than 10,000 types of cryptocurrencies. However, only a few of them have dominant positions in the market. What are the ways to buy cryptocurrencies?
Exchanges
Cryptocurrency exchanges are dedicated trading platforms for buying, selling, and exchanging digital assets. They use a market pricing mechanism based on supply and demand. To start trading on the exchange, you need to register, undergo verification (KYC) by providing a passport and other documents, and then top up your account with fiat money or cryptocurrency.
The entire process can take up to several days. After this, various trading pairs will become available on the exchange for exchange. For example, BTC/USDT, ETH/BTC, ETC/LTC, etc. The exchange takes place at the market rate, taking into account the exchange commission. Among the most popular exchanges in 2024 are Binance, Kraken, Coinbase, and others. You can learn about other reliable exchanges at Rates, an exchange rates service that provides access to useful information about the modern financial world.
P2P platforms
P2P (peer-to-peer) platforms are special services that allow users to directly exchange cryptocurrencies with each other at their own rate. The seller places an ad offering to sell a certain amount of cryptocurrency. He himself indicates the price and method of payment, for example, transfer to a card, electronic money, or cash. The buyer finds a suitable offer and agrees with the seller on the terms of the transaction.
Once an agreement is reached, the buyer transfers money to the seller, and the seller sends cryptocurrency to the buyer’s wallet. The transaction is verified by the platform guarantor, who resolves disputes.
The advantages of P2P exchange are complete anonymity, free choice of transaction terms, and the ability to use any payment method. Among the disadvantages of P2P exchange is the risk of running into a scammer and the need to search for a long time for a suitable offer.
Among the most popular P2P exchanges are CommEX, Bybit, and Huobi.
Payment Systems
Some popular payment systems and e-wallets have added the ability to directly buy and sell cryptocurrencies in their applications. For example, Payeer. It supports instant purchase of BTC, ETH, LTC, DASH, and USDT for fiat from a bank card or Payeer account. There is a built-in crypto wallet and exchanger.
Purchasing cryptocurrencies through familiar payment systems simplifies the process for beginners. There is no need to understand the nuances of how exchanges work or create accounts on third-party exchangers. However, the choice of cryptocurrencies here is limited only to the most popular coins.
Cryptomat Machines
A crypto machine is a special terminal, similar to a regular ATM, but designed for buying and sometimes selling cryptocurrencies for cash. Outwardly, it looks like a regular ATM with a screen and a bill acceptor.
To buy Bitcoin through a cryptomat, the user needs:
- Find the terminal and click the “Buy” button.
- Scan the QR code of your crypto wallet from the screen.
- Enter money into the receiver.
- Confirm the operation.
- The purchased cryptocurrency should appear in the user’s wallet within a few minutes.
- The most promising cryptocurrencies for investment in 2024
When choosing cryptocurrencies for investment in 2024, you should pay attention to fundamental factors – capitalization, liquidity, demand, and usability:
- Bitcoin (BTC) is the first and most capitalized cryptocurrency. The coin’s scarcity and popularity make it a defensive asset. In April 2024 there was a halving, the reward for mining the block decreased to 3.125.
- Ethereum (ETH) is the main platform for creating decentralized applications and conducting ICOs. In 2022, the network transitioned to Proof-of-Stake, which made it more scalable and environmentally friendly.
- Binance Coin (BNB) is the native token of the Binance ecosystem. It gives discounts on trading fees and allows you to participate in IEOs on the Binance Launchpad platform. New use cases are constantly emerging.
In addition to this list, it is worth following market trends and keeping your finger on the pulse of news from the world of blockchain. Sometimes little-known coins experience sudden pumps due to celebrity endorsements or media coverage.
Final Thoughts
The scope of application of cryptocurrencies is constantly expanding. If previously they were used mainly for speculation, now more and more people and businesses accept digital coins as payment for goods and services. As of 2024, there are over 560 million cryptocurrency holders. You can learn more about modern financial solutions for working with fiat and cryptocurrency on the Rates.fm platform, a convenient exchange rates tool with a lot of useful information.