We Answer 10 Questions About Cryptocurrency
By ROKKEX on Altcoin Academy
It is that time of the month when we sit down to answer ten questions that you have likely already googled. We have hand-picked ten commonly searched questions about cryptocurrency and answered them below. Keep reading if you are curious, want to learn or check your knowledge.
What is a cryptocurrency?
It is a digital asset representing money in the digital marketplace. It is based on open-source software, cryptography, and networking.
What are the benefits of cryptocurrency?
Cryptocurrency is:
- Decentralized. There is no single central party that is in control of cryptocurrency management, this way avoiding corruption, bureaucracy, or any hierarchy.
- Secure. Due to the advanced cryptography, the path of every blockchain transaction is encrypted. All of them are anonymous but fully trackable in the ledger. This system prevents scams and keeps track of every coin that has been issued.
- Fast. Crypto transactions are usually processed in a matter of a few minutes.
- Global. Cryptocurrency allows a fully global market to flourish. The transactions are made peer-to-peer, no matter in what country the sender and receiver are located. There is no need to explain your payment or pay high fees that would be required for many international payments done through central banks.
Where should I store my cryptocurrency?
There are several different hot and cold wallets in which you could keep your crypto money. Your choices are as follows:
- Exchange
- Paper wallet
- Hardware wallet
- Software wallet
- Web wallet
- Mobile wallet
If you would like to know more, please check our article — Which Crypto Wallet Should You Choose.
Can people steal my crypto?
Yes and no. Your cryptocurrency is kept in a wallet that has a private key. Your assets cannot be accessed without it. Thus, if you lose it and someone finds it or if you just give the key away to someone for some unknown reason, then that someone will be able to access your money and do as they wish with it.
Keep in mind that if you leave your crypto assets in the exchange wallet, the private keys belong to the exchange. That is why you should make sure that your exchange platform follows appropriate security standards and has a hack prevention system.
How do cryptocurrency transactions work?
Every transaction goes directly from person to person/company. However, each exchange has to be confirmed before it is processed. This is called mining. It is done by miners that compete who will be first to verify the transaction and place it in the block on the blockchain.
It is quite complicated to explain it in short, so we would advise you to read our article — How Much Do You Really Know About Crypto Mining?
Is cryptocurrency a scam?
Again, yes and no. If we look at the top 100 of the most popular cryptocurrencies’ list, none of them will be scams. However, as we got a chance to learn from insanely popular ICOs and some terrible new altcoins developers, the possibility for an asset to be a scam is quite high.
You have to be smart while investing and buying new coins. We highly advise you to analyze the project, the team, their work, and their background.
What can I buy with cryptocurrency?
You can buy pretty much anything. More and more stores and services around the world are starting to accept at least a few of the most popular cryptocurrencies. If you still have doubts, a guy bought a Lamborghini from the official Lamborghini dealership using Bitcoin back in 2013.
How many cryptocurrencies exist?
There are thousands of different cryptocurrencies by now. Some of the most popular are Bitcoin, Litecoin, Ripple, Bitcoin Cash, and Ethereum.
What determines the price of cryptocurrency?
There are quite a few things that determine cryptocurrency prices. The primary driver, just as with anything else, would be the demand and supply. However, many things affect their balance. Cryptocurrencies demand is known to react fast and big to various social, political, or economic events. A great example was price jumps of various cryptocurrencies after Trump’s ‘not being a fan of bitcoin’ tweet or the development of the Trade War between the US and China.
Is cryptocurrency legal?
It depends on your country’s laws. Some countries have banned cryptocurrencies; some have banned mining; some are still trying to put the limitations in place. As cryptocurrencies are still relatively new and developing, the laws around them are also still developing.
If you are curious about why some countries are deeming digital assets as illegal, check out our article Why Does Government Try To Control Cryptocurrency?
Once again, we are through with our ten questions, this time on the cryptocurrency. We hope you have learned something new or found the answer you were looking for.
At ROKKEX, we take security extremely seriously, and our crypto exchange is built on ‘Security First’ principle. We want to share our expertise with the broader public for the world to become happy, safe, and wise :)
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