Still Not Hyped On Cryptocurrencies?
Distributor ledger had investors going crazy after it peaked bitcoin over $60,000 in 2021. Some saw the following fall of the token industry at a correlation with bitcoin’s floor above $16,440 in 2022. Bigshot FTX was just collapsing. The new industry eventually brought crypto into Wall Street’s clutches. Even now, there’s one country accepting digital currency as legal tender.
If you’re not yet invested in the hype of cryptocurrencies, then defining it might encourage you. Being that you consider buying and selling crypto, you’ll need a solid understanding of blockchain first.
What Is Crypto?
Are They Currencies?
Currencies that are programmed, which is to say governed, by blockchain are called crypto. You might know bitcoin and its famous creator with a Japanese name no one could put a face to.
The legendary BTC gave way to a block of chains for programmers to code on. Bitcoin not only united developers unto a single chain, but its model holds a design for future dApps.
As a digital asset, bitcoin made it difficult to define crypto without saying blockchain in the same sentence. Distributed ledger (DLT) is now the world’s promise of autonomous money. Later, it was new infrastructure, old money and fundraising that pegged crypto to the dollar.
Other financial assets back DLT so you can buy and sell crypto alongside gold prices.
In blockchain’s aftermath, 2023-crypto transactions powered a growing industry built on smart contracts. Right now, contracts get blockchain deeper into everyday use, calling for a common use of crypto. Industry leaders, foreseeing a risk of slow adoption, programmed their growing industry on proprietary tokens. “Native tokens” were accepted as legal, U.S. property in 2014.
Coinbase
- Regulated exchange
- An easy-to-use platform
- Free crypto training offered
Coinbase
Here’s what make the United States IRS account for crypto today:
- Being contracted—Most contracts are recognized by the order of law, and crypto contracts establish the same obligations as written contracts do.
- Being legal—With many legal products and service being bought by crypto, the legality of spending e-coins relates to the legality of your purchasing.
- Being funded for government services—By accepting crypto on a national scale, it gives the U.S. government its grounds for taxing crypto gains and deposits.
Just keep in mind that the cash value of all crypto is the true financial measure of all blockchain. Blockchain defines crypto because blockchain is programmed by tokenized coins. Blockchain and crypto coexist on a single contract. The utility of a blockchain gets serviced only if fees are paid via native tokens.
There’s over a trillion in USD invested in crypto, but new users of blockchain are also.
These new users will have to buy and sell crypto when using DLT contracts, NFTs or VR games. The developers of smart contracts “bound” blockchain to the value of their native tokens.
When you’re bound by crypto, you have to spend crypto in order to transact something.
This binding contract is how native tokens work, and these tokens keep crypto alive in 2023.
When you operate Ethereum, for example, you have to transact in its native coin—ether (ETH). Crypto remains relevant largely because investors tie blockchain to real services paid in native coins. The first investors not only kept their contracts, but the tech they invested in did also.
The 2023 industry we see now, being built on smart contracts, grows on the financial backing of cryptocurrencies. If you’re not already bought into it, a $1-trillion market is what it’s valued at. Bitcoin sits with its share dominance now holding $519 billion of all crypto’s capitalization.
Here’s the Growing Crypto Landscape:
Crypto can be bought and sold based on market capitalization.
Capitalization is, essentially, the total value of an outstanding product or its service use. The total number of people using something in the market is also capitalization. In charts and on diagrams, it’s measured as the amount of a specific coin in circulation. Though bitcoin’s share supersedes all the others, here are a few that add to the global capitalization of crypto:
- Ethereum
- Cardano
- XRP
- Dogecoin
- Polygon
- Polkadot
- Litecoin
- Shiba Inu
- Solana
- Tron
How to Buy and Sell Crypto?
You won’t find the world’s top-rated coins in a typical bank. In the world of blockchain, individuals are their own bankers. You have to account for your own wallet and file your taxes accordingly. The safest way to buy and sell crypto is with a digital exchange or wallet. Regulated exchanges are convenient places to trade crypto when using the internet.
There are two legal options for trading crypto, and these are blockchain exchanges or brokers.
Binance
- Low fees
- One of the largest crypto exchanges
- Fee discount for using native BNB
Binance
Blockchain exchanges
Centralized exchanges will convert fiat cash, which are dollars or euros, into cryptocurrencies. The key here is that it’s fiat currency that gets deposited for the transaction. The more coins you buy from a CEX, the more actual currency you’ll need to deposit beforehand.
These exchanges are regulated and, therefore, require an account verification. Verifiable information includes bank, phone and mailing data. With a human factor at its core, CEX exchanges often get managed by a board of administrators. Coinbase even got as far as being listed on the U.S. stock exchange.
Binance, Crypto.com and Kraken are among the largest CEXs in the market right now.
You can trade with them or consider diversifying your portfolio with more decentralization.
Coinbase
- Regulated exchange
- An easy-to-use platform
- Free crypto training offered
Coinbase
Decentral exchanges
Decentralized exchanges are also regulated, but you’ll buy or sell cryptocurrencies based on the exchange’s liquidity. Your top DEXs offer the same services as a CEX exchange but with their liquidity provided through a proof model for staking crypto. By creating its own native token, a DEX exchange relies on a pool of invested cash to transact its trading through.
On these exchanges, you can deposit your money to invest in the exchange or to be converted into another cryptocurrency. For investors who “stake” their coins into a decentralized exchange, they will have their purchase of native tokens put on hold. That sum is held as their funding, which in this case is the liquidity that would be used to transact user orders.
Investors see the value in decentralized exchanges due to the decentralized-finance (DeFi) industry. The core of this industry operates as a decentralized exchange. The PoS staking used by DEX exchanges enables platforms to exchange value without a central custodian. With no mediators involved, DEX exchanges have better resilience against being hacked.
Brokerage platforms
The top brokers offer securities trading online. In recent years, they’ve provided products tied to cryptocurrencies. You can buy or sell crypto through modern brokers, but you cannot own crypto through these agents. Brokers only offer price contracts that accurately follow the spot prices of crypto. Your order’s price is honored by regulated brokers.
To offer price contracts for the value of a crypto, brokers working in the U.S. rely on CFDs, ETFs or something similar. Regardless of the receipt name, these derivatives agree to pay or bill you the sum your order specified. You will not, however, own any crypto by doing this.
Start your search for a crypto broker among these:
- eToro
- Capital.com
- Libertex
Buy and sell crypto from an ATM (ATM)
The Bitcoin ATM is an emerging discovery, and people are finding it across the entire globe each day. Online exchanges are the most used for buying crypto, but ATMs offer a reliable alternative to internet surfing. No accounts are required and no identification will be asked.
However, you need a crypto wallet to receive funds into. There were roughly 69,000-bitcoin ATMs in the U.S. in 2023. The five countries with most bitcoin ATMs in the world include:
- The United States: 67,962
- Canada: 2,657
- Spain 215
- Poland: 114
- El Salvador 212
The difference in peer-to-peer exchange
eToro
- Number 1 copy trading platform
- Integrated social network for traders
- Trading cryptocurrency CFDs
eToro
A pure peer-to-peer exchange is another way to trade fiat or e-coins into crypto. What defines these exchanges more clearly is their time cycles. You won’t immediately transact at any price you see listed. Instead, you directly speak with the person holding the crypto you’re buying. Your price is settled as an agreement you make with the seller, and the crypto is yours.
These sites rely on internal messaging to forward deals with you and a seller. Some transactions require you to make an appointment or a few video meetings. You will complete transactions at a time or date specified by you and the seller.
Many of the past peer-to-peer exchanges have developed since their launch in 1999 with Napster. Today, P2Ps have developed to work as or become DEX exchanges. Traditional peer-to-peer exchanges were direct-messaging sites for people buying or selling bitcoin.
As far as market capitalization, here are a few 2023 exchanges around the globe:
- Binance—$4.953 trillion
- OKX—$960 billion
- UpBit—$800 billion
- Coinbase—$775.09 billion
Binance, being the largest by far, offers the lowest risk on liquidity.
The more transactions processed on an exchange, the more buy or sell orders you get access to. These orders are made by global users who want to time their purchases and sales. Binance’s liquidity makes it easier for you to find your price regardless of season or price.
If you’re looking for more than liquidity, consider the services and account requirements of:
- KuCoin
- Crypto.com
- Huobi
- Gate.io
- Krake
If you’re using a broker to exchange crypto, then consider the reputation of CFDs from eToro. To diversify your options, the following brokers also have price contracts for crypto:
- Capital.com
- Eightcap
- Swissquote
- Sax Bank
- AvaTrade
How to Manage Your Account and Data
Thanks to blockchain, we can make our purchases completely anonymous, which includes trades on decentralized exchanges. Just keep in mind that working anonymous isn’t the same as working in secrecy. Yes, there are dark networks and malicious scammers out there, and the internet empowered these obscure users in a way.
If society choses autonomy, then it would call for complete decentralization. This is why being anonymous is important. Even the identity of law-abiding citizens have to be concealed, or the computer code cannot truly be autonomous and decentralized. If the users of a blockchain remain identifiable, then a system’s transactions remain more corruptible.
The concept is called transactional anonymity, for only your wallet appears on a blockchain. Not including your identity, the blockchain will record this data set that’s inherent to its operation:
- Date
- Transaction amount
- Block data/number
- Wallet address/recipient wallet
- Fees
If you’re specifically looking for anonymity, then consider Monero, Zcash and Secret wallets. Without breaking any U.S. laws, transactions in these agency wallets will hide more data than a standard blockchain can.
Anonymous blockchains are specifically programmed to hide:
- User/Seller identity
- Transaction amount
- IP addresses
- Recipient identity
Monero is an ideal example of the development of anonymity. Though blockchain is ideal for hiding user identity, XMR coins go a step further to conceal the nature of a transaction.
The Role Your Wallet Plays
A crypto wallet keeps a user’s identity anonymous. Wallets are storage hard and software units used as a medium of crypto. Wallets enable you to buy things or convert crypto coins into different coins. There are two types of wallets. You need to determine which one or combination works best. The two are cold and hot, and you can learn more about them below:
Cold wallets
This wallet is referred to as cold because it doesn’t use the internet. Through a passcode-locked USB key, data about the wallet’s address gets stored. You can write this data on a sheet of paper, but the USB key conceals it. Through a USB key, additionally, you can transfer data about your crypto onto a computer. You won’t need the internet to do this via a cold wallet. Here are the most recommended cold wallets around:
- Trezos
- Ledger
Hot wallets
Hot wallets are how you make purchases online when you’re using crypto. The transactions you enter through blockchain call for some sort of wallet address. A hot wallet provides a standard set of public and private keys to use. This data allows other wallets to transact with yours.
You will need a hot wallet only if you want the flexibility of operating web3.0. This includes anytime you buy things, but you don’t need a hot wallet to own crypto. Most of the centralized exchanges offer hot wallets, and these can be used to make purchases around the web.
Look here for agencies that strictly provide wallets and related services:
- Metamask
- Guarda
- Trust Wallet
