The Key Factors to Understand Before Buying Cryptocurrencies

The Key Factors to Understand Before Buying Cryptocurrencies

Cryptocurrencies like Bitcoin and Litecoin have been big news in the last few years, mainly due to the spectacular price rises that we’ve seen in the sector. If you’re thinking of buying some digital money for the first time, what are the key points you need to consider before you go ahead?

How to Store Them

One of the main issues people have with cryptocurrencies is that they can be awkward to store. This isn’t due so much a lack of security as the fact that they’re so secure that you can lose access to your own tokens if you aren’t extremely careful. Forget the keys and it’s going to be almost impossible for you to get into your wallet.

In fact, it’s been estimated that some three million or more Bitcoin has been lost forever for various reasons such as lost keys or lost laptops. However, if you take a moment before starting to consider your options and how to store your keys, this shouldn’t be a problem.

The different types of cryptocurrency wallets include hot and cold wallets. Hot wallets are kept online, while cold wallets are stored offline. This means that a hot wallet is easier to use for someone who makes frequent transactions and wants fast access every time. However, a cold wallet should be safer, particularly in the case of someone who doesn’t move their tokens around much.

someone who doesn’t move their tokens around much

Where to Spend Them

There are two main reasons for buying cryptocurrencies. The first is as an investment, since these volatile currencies have varied a lot in price and have helped some people to earn impressive returns in little time. The high levels of volatility make it an interesting but potentially risky type of investment that you should research fully before opening.

The other reason to buy cryptos is to spend the tokens, as this type of digital money makes it easy to send money to anyone anywhere in the world, or to pay online for a huge variety of goods and services. In addition, in some countries there are cities classed as Bitcoin hotspots, although in other places you’ll find it difficult to get anyone to accept them. Naturally, most of these Bitcoin hotspots are major cities, such as San Francisco, New York and London, due to them being financial and tech hubs, although there are some smaller towns and cities that have embraced this world.

Another popular use for the main cryptos is to gamble online. If we look at the FAQ section from one of the main crypto casinos, we can see that Bitcoin, Ether, and Tether are among the tokens accepted. Transfers go through almost instantly and the casino doesn’t charge fees, so the only cost of doing this comes from any transaction fee on the cryptocurrency network.

By bearing these points in mind, you can decide which token suits you and how to use it so that you make the most of the possibilities offered by cryptos.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.