According to Dan Schatt and Domenic Carosa, two executives of San Mateo, California-based decentralized finance (DeFi) startup Earnity, the proper approach to purchasing cryptocurrency is to first learn about it. And the first step is understanding the basics.
Cryptocurrency, or crypto, is the term used to describe digital or virtual tokens. These tokens utilize cryptography for more secure transactions. This is also done to control the creation of new units.
Cryptos are decentralized. They are not under the control of any government or financial institution.
Cryptos can be traded on exchanges like stocks and commodities. In addition, there are various ways to purchase cryptocurrencies, including buying and holding them, mining them, and participating in initial coin offerings (ICOs).
You will need a digital wallet to buy and hold cryptocurrencies. A digital wallet is software wherein you can store your public and private keys. It interacts with various blockchain networks to allow you to send and receive digital assets. There are several types of wallets, including desktop, mobile, web, and hardware wallets.
You will need specialized hardware known as an ASIC miner to mine cryptocurrencies. ASIC miners are dedicated devices that can mine cryptocurrencies at a much faster rate than traditional computers.
To participate in ICOs, you must create a cryptocurrency wallet and send funds to the ICO’s unique address. It is imperative to be very careful when participating in ICOs, as many are scams. Thus, only purchase reputable ICOs.
Cryptos are still a relatively new purchase, so conduct research before buying. Make sure you understand and are on top of the risks involved. If you still have questions, you can also consult financial advisors or seek advice from successful buyers like Dan Schatt and Domenic Carosa of Earnity. Moreover, be sure to store your cryptocurrencies safely and never share your private keys with anyone.