These days, it can be pretty hard to find a corner of the internet that isn’t raving over cryptocurrency. It can be pretty confusing to keep up with this discourse when you don’t know what crypto actually is and how it’s affecting the global economy.
I have previously spoken of cryptocurrency and its various benefits and disadvantages. Now, let’s take a look at what you need to know if you’re a newcomer to the crypto scene. Keep reading to learn more!
What is Cryptocurrency Exactly?
Cryptocurrency is decentralized digital money that exists on a blockchain. They are typically not issued by central authorities such as a government or a bank, so in a sense, they are exempt from any kind of external interference or manipulation. It’s their decentralized nature that sets cryptocurrencies apart from traditional currencies and makes them appealing to up-and-coming investors.
How Many Cryptocurrencies Are There? Which Should I Invest In?
There are many cryptocurrencies on the market today, so you have no lack of choice if you’re considering investing in them. Bitcoin was the first cryptocurrency to rise to prominence in 2009, and ever since, cryptocurrencies have only grown more popular.
Before investing in crypto, do your research on the different types of cryptocurrencies available on the market. Bitcoin, Dogecoin, Ethereum, Litecoin, Cardano, and Tether are some of the most popular ones.
If you’re a beginner, you could start by investing in Bitcoin. As the oldest cryptocurrency, Bitcoin has carved out a space for itself in the crypto world, with the largest cryptocurrency system in the world. Every currency exchange supports Bitcoin, and it’s easier for you to find reliable research on Bitcoin to help you make an informed investment. Once you’re comfortable with crypto, you can try investing in other cryptocurrencies such as Ethereum or Cardano.
How Do I Buy Cryptocurrency?
The first step to investing in cryptocurrency is to find and register with an exchange or a broker, such as Coinbase, SoFi, or Binance. Ensure that the exchange you register with supports the cryptocurrency you want to buy.
Once you actively start purchasing cryptocurrencies, you can store them in your digital wallet, which will contain the unique codes for all your cryptocurrencies. If you’re purchasing cryptocurrency for the first time, you may have to use fiat money to buy them. However, you can also exchange one type of cryptocurrency for another, provided your exchange allows you to. So you can trade your Bitcoin for Dogecoin or Tether.
Is Cryptocurrency Legal?
Yes, trading in cryptocurrencies is legal in Canada. However, they are not legal tender. Only the notes issued by the Bank of Canada and coins issued by the Royal Canadian Mint are considered legal tender. No centralized financial institution in Canada monitors and regulates cryptocurrency.
This means that while you can buy goods and services using cryptocurrency, provided a business accepts such payments; you cannot pay your taxes using cryptocurrency.
I’ve barely scratched the surface of crypto in this article. If you’re serious about investing in cryptocurrencies, I recommend doing extensive research before venturing into this daunting yet exciting scene.
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