Cryptocurrencies can be acquired by both mining and buying. Read a blog about what cryptocurrency mining and buying processes mean.
Hey everybody! In a previous blog post, I already mentioned briefly that cryptocurrencies can be acquired in two different ways – either by mining or by buying. Does it seem complicated? Let’s take a closer look at these cryptocurrency acquisition methods!
Mining of cryptocurrencies
The word “excavation” easily evokes an image of digging precious metal or soil from rock or soil. Mining cryptocurrencies can be equated to traditional mining on some level, but not quite!
The computing power of a computer is used to extract cryptocurrencies. Instead of beating the ground, the computer solves the complex mathematical calculations needed to validate the transmitted transmissions. The confirmation of transactions forms the block from which the blockchain, i.e. the public ledger, is formed.
At the end of solving complex mathematical calculations, the Miner, ie the person or entity carrying out the mining, receives a certain amount of cryptocurrency in return. Mining is also a competition for who decides the calculation first and gets paid for it! After confirming the transactions that have entered the network, the same process is repeated over and over again.
Buying cryptocurrencies is much simpler than mining, as the cryptocurrency to be purchased has already been mined. The buyer can obtain a suitable cryptocurrency from the trading venue of his choice. Cryptocurrency trading venues are very similar to traditional stock and fund brokers. One such trading venue is the company Binance, which has made buying and selling cryptocurrencies easy and safe.
This is how Binance works
Buying at Binance is similar to using a book-entry account. Start by registering and depositing the desired amount of dollars into your account. Then buying cryptocurrencies can begin! In Binance you can buy and sell the most used and popular cryptocurrencies: Bitcoin, Ethereum, and Litecoin. There are also hundreds of other crypts that can be purchased
However, be sure to familiarize yourself with the investment before making an investment decision. In addition to getting to know the investments, it is also good to be aware of what kind of investment strategy you want to follow yourself. Is your idea to make quick profits, invest in the long run, or something in between? It is also good to be aware that cryptocurrencies are highly volatile, meaning that their value varies, and both understand and internalize their risk tolerance.
Preservation of cryptocurrencies
After buying, cryptocurrencies need to be stored somewhere. Cryptocurrencies are a new kind of digital currency, and preserving and protecting them does not work in the same way as storing traditional fiat money.
Cryptographic currencies are generally stored in wallets that store cryptographic keys. These keys act as a kind of PIN for cryptocurrencies, they encrypt and decrypt data.
There are two types of cryptographic wallet keys, public and private. The public key works like a bank account number – it can be used to receive cryptocurrencies. The private key prevents the unauthorized use of funds, behind which are the cryptocurrencies themselves. The private key should be owned solely by the crypt holder, and not by anyone else.
The safest place to store crypts
There are also different types of crypto wallets – hot and cold.
Online “hot” wallets are popular for their ease, as it is easy to trade in cryptocurrencies when connected to the internet. Many cryptocurrency trading venues use this method of custody in their services.
Cold wallets are safer because the cryptocurrencies stored in them are not exposed to outside attacks and hacking.
As easy as opening a book-entry account
Yes, buying and selling cryptocurrencies is just as easy as investing in stocks and funds. Easier, because where the stock has to buy at least one whole, of the crypts you can buy small shares. So you don’t have to buy even one whole Bitcoin!
Example: Bitcoin consists of one hundred million Satoshi, which is a unit of account for Bitcoin. Ethereum, on the other hand, consists of a billion gwe, which is the unit of account of Ethereum.
Women, what do you say? Buying cryptocurrencies couldn’t be easier than this, so I’m not just collecting Satoshis!