Are you planning on getting started with investing in cryptocurrency? If so, like many newbie investors you’re probably wondering how does cryptocurrency work?
In this article, we will provide you with a breakdown of how cryptocurrency works so you will have a better understanding of crypto before you invest in it.
How Cryptocurrency Works
When two cryptocurrency users engage in a transaction, that transaction will occur between their cryptocurrency wallets or the public address of each wallet.
To initiate the transaction, the user who is sending cryptocurrency to another wallet will need to login to their cryptocurrency wallet with a private key, and once the transaction is finished it will be added to a public ledger or the “block chain” as it’s also known in the world of cryptocurrency.
The beauty of cryptocurrency is that every transaction is encrypted and secure so the user will never have to be concerned about losing money with cryptocurrency due to their wallet or network not being secure.
Where to Get A Cryptocurrency Wallet
In 2019, it’s easy to get a cryptocurrency wallet because so many are available. One of the most popular cryptocurrency wallets is Coinbase. The company has been in existence since 2012 and currently is the leader in the cryptocurrency market since most people who use cryptocurrency have at least one wallet with Coinbase that they use to store their cryptocurrency.
Before getting started with buying cryptocurrency, or cryptocurrency trading, it’s best to remember that there will be tax implications. You will have to pay capital gains on your profits, so it’s best to keep track of all your transactions and focus on paying your taxes quarterly to avoid having to pay a hefty capital gains tax bill each year.
If you have questions about cryptocurrency please leave us a comment or question below!