What is Cryptocurrency?
Cryptocurrencies are digital currencies that verify transactions using mathematical algorithms called cryptography. Bitcoin is the most popular cryptocurrency, and differs from traditional currencies in that it has no central governing authority, no requirement for the transfer of personal information, and has a set supply of 21 million bitcoins that will ever be created, or “mined.”
While all bitcoin are actually “stored” on the blockchain, a decentralized ledger of transactions, you’ll need a digital wallet to maintain access to your bitcoin. These wallets store your public address—where people can send you bitcoin—and your private key, the string of characters that prove you own your bitcoin. Keeping your private key safe and secure is necessary to make sure no one can steal your bitcoin.
How to Buy Bitcoin
To buy bitcoin, you’ll need a wallet, an exchange, and funds with which to buy it. After you’ve set up your wallet, you’ll need to create an account on an exchange, which acts like the stock market for digital currencies. You exchange fiat currencies (like USD) for cryptocurrencies like bitcoin. Once you’ve purchased your bitcoin, you’ll want to transfer them to your wallet to keep them secure.
Using and Spending Bitcoin
Now that you own your own bitcoin, you’ll want to use and spend it. More and more retailers offer bitcoin as a payment method, as do many charities and non-profits. You can also simply give or sell your bitcoin to friends and family, or try your hand at betting with bitcoin with an online casino or sportsbook.
In the cryptocurrency marketplace, Bitcoin remains at the top. However, alternative crypto options referred to as 'altcoin' are becoming more popular among users. In this guide, we'll break down five popular altcoins you should know about.