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The advancement of the internet has brought about the development of various technologies. One of these developments is the birth of cryptocurrencies. Cryptocurrencies came into existence in 2009, with the first-ever crypto Bitcoin. This cryptocurrency took the world by storm, generating a lot of waves and publicity. However, most individuals initially thought it to be a Ponzi scheme or a scam. Therefore, it was ignored by a lot of people. Recently, cryptocurrency is one of the most talked-about digital currency platforms. In this article, we will discuss cryptocurrency account bitcoin.
WHAT IS A CRYPTOCURRENCY AND HOW DOES IT WORK?
WHAT IS CRYPTOCURRENCY?
Cryptocurrency, also known as crypto, is any digital currency that exists only virtually and can be used to make transactions. It is a digital currency that uses cryptography in confirming and protecting transactions. Cryptocurrency is a decentralized system or network, which means the network is not regulated or governed by any financial body. It uses a decentralized system to record and store transactions, and also issue new units
Cryptocurrency is a digital network that verifies a trader's transaction without the need of any bank. It operates as a peer-to-peer network that allows any individual to perform financial transactions. Cryptocurrency is a digital financial network that deals only online. It's used by individuals to transfer funds from one digital wallet to another. When these cryptocurrencies are transferred, the transaction is recorded in a public ledger called the blockchain. These cryptocurrencies are also stored and kept in a digital wallet.
Cryptocurrency is a highly encrypted and secured network. This network uses encryption in confirming transactions. That means the platform requires advanced coding, and encryption when performing a transaction, storing data, and publishing data on the public ledger known as the blockchain. The purpose of this is to ensure the safety of investors' funds.
As earlier stated, the first cryptocurrency currency to come into existence was Bitcoin. Bitcoin was introduced into the mainstream in 2009, by a tech wizard who goes by the name Satoshi. It is however still the most traded cryptocurrency with a current price value of $31,171.11.
HOW DOES CRYPTOCURRENCY WORK?
Cryptocurrencies operate on a distributed public record known as the blockchain. The blockchain records all the transactions performed by every crypto holder.
New crypto tokens are formed through a technique known as mining. This involves the use of a high-core computer system to solve difficult mathematical problems that produce tokens. The currencies can also be bought from a brokerage firm, and they can be stored in a cryptographic wallet.
A cryptocurrency trader is just an individual who possesses a token that allows him/her to perform transactions digitally. It also enables an individual to transfer these tokens from one trader to another. This transaction is carried out without a third party.
Even though Bitcoin has been in the crypto market since its inception, the crypto world is steadily growing and emerging financially. More financial use is expected in the crypto world. For instance, new technologies are being developed in the crypto world. Technologies such as NFTs.
WHAT IS A CRYPTOCURRENCY ACCOUNT BITCOIN?
A cryptocurrency account is a digital account used by a trader to perform crypto transactions. There are different types of crypto wallets available. But we will focus on the two main types which are:
- The Hosted Wallets
- The Self-Custody Wallets.
HOSTED WALLETS
The hosted wallets are the most popular and the easiest crypto wallet to possess. They are easy to use and easy to set up. When you purchase crypto through a broker, the crypto is automatically stored in a hotel wallet. It is referred to as a hosted wallet because a trusted third party stores the crypto on your behalf. For und, how a bank keeps a customer's money in the bank. The broker acts as a bank, and stores your crypto coins in a hosted wallet.
SELF-CUSTODY WALLETS
The Self-custody wallet is encrypted and can only be accessed by the owner by using his/her private keys. This type of wallet gives the user complete control over their crypto. It does need the Involvement of any third party or a manager. The broker only provides its software for the storage of the crypto with the crypto holder having encrypted access via a private key assignee to him or her. The good thing about this cryptocurrency account is that it gives traders more use of the platform. That means a trader can lend, trade, stake, etc with his or her crypto token.
However, there is a drawdown, if the crypto holder losses his or her private key, they won't have access to the crypto anymore. Additionally, if another person gets access to your cryptocurrency account bitcoin you will lose access to all your crypto.
HOW TO SET UP A CRYPTOCURRENCY ACCOUNT BITCOIN?
HOW TO SET UP A HOSTED WALLET:
Picking a reliable crypto platform is the number one thing every intending trader should do. A reliable and credible platform is a necessity. When picking a platform, ensure to pick a secured, user-friendly, and highly regulated broker.
- Create an account
- Create an account Put in all the required information, and generate a secure password.
- Ensure to employ 2-step verification also referred to as 2FA. This security creates an extra layer of safety.
- Startup a crypto transaction (Buy and sell).
HOW TO SET UP A NON-CUSTODIAL WALLET:
- Download a crypto software or wallet.
- Create an account
- Store your private key in a safe place, and ensure to keep it close.
- Your cryptocurrency account Bitcoin is all set and ready to use.
HOW DO TRADERS MAKE MONEY FROM A CRYPTOCURRENCY ACCOUNT BITCOIN?
A lot of individuals make money through crypto via different methods. These could include trading various other cryptos, or via staking, lending, and yield farming. The most popular form of crypto investment is by storing it in a crypto wallet and as the price of the crypto rises, so does the amount of crypto in your wallet. However, crypto trading is very risky, and just as the gain topples so do the losses.
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