The future of money is likely to be mostly digital. Besides the rise of cryptocurrencies like Bitcoin and Ethereum, more global central banks are researching and testing digital currencies. If you aren’t sure about digital currencies, you should learn about how they work and how to benefit from investing in them.
Digital currency has many benefits. Making payments with it is often quicker than traditional methods. Sending money internationally usually comes with high fees and currency conversions. However, digital currency costs are lower, and the process is simpler. Digital currency works 24/7, so transfers aren’t delayed on weekends or outside of business hours. Also, using a Bitcoin ATM or other ways to buy, sell, and transfer digital currency is often done anonymously.
Here’s how to navigate the world of digital currencies.
Introduction to Digital Currencies
Digital currency is any currency in electronic form. Much of the current currency is digital, though not exclusively so. Digital currency never takes physical form; it remains on a computer network and is exchanged electronically. This is similar to how Bitcoin ATMs transfer cryptocurrencies from one user to the next.
Cryptocurrencies, Stablecoins, and CBDCs
There are three types of digital currencies. CBDCs are digital currencies backed by fiat currency issued directly from a country’s central bank. By comparison, cryptocurrency is a non-sovereign digital currency supported by a distributed ledger. There are also stablecoins, digital currencies backed by fiat currency, held at commercial banks.
Established Cryptocurrency for Beginners
If you are starting out navigating digital currency and crypto, it’s best to avoid lesser-known cryptocurrencies and focus on digital currencies that have years of activity backing them. Even mid-tier cryptocurrencies have faltered and become virtually worthless. If you’re building a crypto portfolio or want to see what an investment may lead to, stick with the more established currencies.
Bitcoin and Ethereum
Bitcoin is the leader and pioneer in crypto. It was first launched in 2008, followed by thousands more. Ethereum was released in 2015 and is an improved, more efficient version of Bitcoin. These are the two dominating digital currencies in the crypto market, receiving the most attention and investment from experienced cryptocurrency trackers.
Buy and Sell Digital Currency
To buy and sell digital currency, one has to go to a market where it is available. There are online platforms and apps that offer crypto trading. Suppose you wish to trade cryptocurrency anonymously or without registering through an app. In that case, Bitcoin ATMs are available nationwide at gas stations. You may also find a BTC ATM in general stores, Walmart, and other common storefronts.
Potential Rise of Central Bank Digital Currency
Only a handful of countries, including Jamaica, Nigeria, and the Bahamas, currently have a central bank digital currency. Countries like Canada have no plans to issue digital currencies, though nearly all central banks are researching digital currency models. If governments agree, digital currencies could be a key aspect of future economics.
Cryptocurrency As Digital Currency
Cryptocurrency is the most common digital currency today. It is used as virtual money and traded for profit, like stocks. While the big names in crypto include Bitcoin and Ethereum, thousands of cryptocurrencies range in value from zero to exorbitantly high evaluations.
Cryptocurrencies Are Highly Volatile
As one of the most volatile assets in the investment game, cryptocurrency investing requires extensive research and careful decision-making. Even established currencies like Bitcoin have experienced drops in value and sudden rises. It is highly volatile, though this can sometimes work in an investor’s favour if they buy and sell at the right time.
How Cryptocurrency Is Controlled
Unlike the currency we use daily, crypto is based on blockchain technology. All transactions are secure, transparent, and decentralized, not controlled by any government or financial institution. Blockchain is near-unbreakable, unhackable, and unaltered. It is the most secure way to manage your own cryptocurrency.
How You Carry Digital Currency
A crypto wallet or digital wallet is how cryptocurrency is carried – in a way. A digital wallet does not store currency, unlike a physical wallet. It holds a digital key that allows access to it. From there, you can use your crypto wallet to buy or sell digital currency at a Bitcoin ATM or by other means.
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