Cryptocurrencies explained simply.
In this guide, you will learn everything you need to know about cryptocurrencies: how they work, what types there are and how you can buy and store them. Dive into this fascinating world with us and discover the exciting opportunities that cryptocurrencies offer.
Cryptocurrencies have fundamentally changed the way we deal with money. But what are cryptocurrencies actually? Put simply, they are digital currencies that exist independently of banks or governments.
Here, you will learn everything you need to know about cryptocurrencies.
Cryptocurrencies are based on blockchain technology. The blockchain is essentially a public digital register that stores all transactions securely and transparently. Anyone can view the transactions on the blockchain, but the parties involved remain pseudonymous. This transparency creates trust and the technology ensures that no one can manipulate the blockchain.
Bitcoin is the first digital currency, which was introduced in 2009. It is decentralized, which means that no one has control over it. The total supply is limited to 21 million coins. This is why Bitcoin is often referred to as digital gold and used as a hedge against inflation.
In addition to Bitcoin, there are now countless other cryptocurrencies and projects, all of which are referred to as altcoins. Altcoins offer various functions and features, such as faster transactions, scalability or innovative technologies. Well-known altcoins are Ethereum, Ripple, Litecoin and Dogecoin.
Cryptocurrencies can be purchased in various ways, for example via crypto exchanges, cryptocurrency vending machines or Cryptonow gift cards. It is important to thoroughly research the risks and opportunities before making a purchase. Once purchased, you should keep the cryptocurrency safe to avoid loss or theft.
To store your cryptocurrencies securely, you need a wallet, i.e. a digital purse. There are two types of wallets: custodial and non-custodial. Custodial wallets are convenient but less secure, as a third-party provider manages your private keys. Non-custodial wallets are more secure as you have control over the private keys, but you are fully responsible for securing them.
Cryptocurrencies offer the potential for high returns, independence from traditional currencies and the opportunity to participate in the digital future of money. However, there are also risks, such as significant price fluctuations. It is important to research both the opportunities and the risks before investing in cryptocurrencies.
Cryptocurrencies have a number of advantages over conventional financial systems. You can use them to send money quickly and easily across national borders without having to rely on intermediaries such as banks. They also offer increased privacy and security thanks to advanced encryption techniques. Most importantly, cryptocurrencies also enable people without access to traditional banking services to participate in the financial system, thereby promoting financial inclusion.
The basis for cryptocurrencies is the revolutionary blockchain technology.
Put simply, the blockchain is a kind of digital notebook in which all transactions are stored. The blockchain is publicly accessible and is checked by many computers in the network. Everyone can view the transactions in the blockchain, but the parties involved are pseudonymous. This transparency creates trust and prevents anyone from manipulating the blockchain. This article explains blockchain technology in detail.
Blockchain technology not only has an impact on cryptocurrencies, but also on many other areas. For example, it can help to make supply chains more transparent or process contracts without intermediaries. The possibilities are almost endless, and blockchain has the potential to revolutionize many industries. Read more here.
You now know what cryptocurrencies are and how they work. Now let's take a look at the different types of currencies.
Bitcoin is the first and best-known cryptocurrency. Since its launch in 2009, it has gained a large following and paved the way for other cryptocurrencies. One of the core characteristics is Bitcoin's limited total supply. There will never be more than 21 million Bitcoins. This limitation makes Bitcoin scarce and more akin to the concept of gold than a traditional currency. This is why Bitcoin is often referred to as "digital gold". Another important aspect of Bitcoin is its decentralization and its independence from governments and banks. This means that no one has control over Bitcoin, just like with gold. Find out more about Bitcoin here.
In addition to Bitcoin, there are many other cryptocurrencies and projects, also known as altcoins. These offer different functions and features. Some focus on transaction speed, scalability or innovative technologies such as self-executing contracts. Well-known altcoins include Ethereum, Ripple, Litecoin and Dogecoin. You can find out more about altcoins in this article.
If you want to buy a currency, there are various options available to you. It is important to understand the options in order to make the right decision for you. Below we show you which options are available.
There are various methods of acquiring cryptocurrencies. One popular option is to buy via crypto exchanges (Cryptonow Trade®), where you can trade cryptos online. Another option is cryptocurrency ATMs, where you can buy and sell cryptocurrencies directly. There are also voucher cards (Cryptonow Wallet®) that simplify the purchase of cryptocurrencies. Whichever method you choose, find out about the risks and opportunities before you invest. You can read more about how to buy cryptocurrencies here.
After purchasing cryptocurrencies, it is important to store them securely to avoid loss or theft. We will show you below which methods there are for safe storage.
To own or trade cryptocurrencies, you need a wallet. In other words, a digital wallet for cryptocurrencies in which you can store and send your cryptos securely. There are different types of wallets, including third-party custody and self-custody. With third-party custody, a crypto exchange or broker manages your cryptocurrencies. This is convenient as your coins are always available. However, there is a risk that your cryptocurrencies could become the target of theft more quickly. With self-custody, you have full control over your cryptocurrencies. You are in "real" possession and your coins are stored more securely. However, you are also responsible for keeping your access data safe, as loss can lead to you losing access to your coins.
Choosing the right wallet depends on your individual situation. If you trade cryptocurrencies frequently and want to access your wallet regularly, an online wallet might be the more suitable option. However, if you have a large amount of cryptocurrencies and want to store them securely in the long term, we recommend the most secure option of an offline wallet such as the Cryptonow Wallet®. This article explains the storage methods in more detail.
Before you invest in cryptocurrencies, it is advisable to familiarize yourself with the opportunities and risks of the crypto world. Find out more below about the potential benefits and risks of trading and investing in cryptocurrencies so that you can make informed decisions.
Cryptocurrencies offer the possibility of high returns and independence from traditional currencies. Through diversification, they can represent a versatile investment option, while transactions are generally less expensive. They also enable participation in the digital future of money. However, high price fluctuations and the risk of fraud must also be taken into account, as cryptocurrencies are not regulated. The responsibility for safe storage lies with the users. In this article, you can find out more about five opportunities and five risks.
We hope this guide has given you a comprehensive insight into the world of cryptocurrencies. Remember that this is just a first step into a vast and constantly evolving field. Stay curious, keep learning and explore the many opportunities that cryptocurrencies offer.
This article does not constitute investment advice or a solicitation to buy or sell digital assets or other financial instruments or to enter into any other financial transaction. The main purpose of this article is to provide general information. No representations or warranties, express or implied, are made regarding the fairness, accuracy, completeness, or correctness of this article or the opinions contained therein. Therefore, it is advisable not to rely on the fairness, accuracy, completeness, or correctness of this article or the opinions contained herein. Some statements in this article may contain forward-looking expectations based on our current views and assumptions. These statements are subject to uncertainties and may lead to actual results, performance, or events differing from the statements made in this article.
The Cryptonow Group and its subsidiaries, as well as any advisory or representative persons, cannot be held liable in any way for this article.
It is important to note that investing in digital assets carries risks as well as potential gains.
