Cryptocurrency

cryptocurrency

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Cryptocurrency

cryptocurrency

Uploaded by

nguyenthithutrangt67

Available Formats

Download as DOCX, PDF, TXT or read online on Scribd

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1. What is cryptocurrency?

Cryptocurrency is a digital payment system that operates independently of banks, using

encryption and decentralized technology to verify transactions and maintain a public ledger
called the blockchain. Cryptocurrency transactions occur directly between users, eliminating the
need for intermediaries. It's stored in digital wallets and is characterized by decentralization,
transparency, security, and the potential for speculative trading.

2. How does cryptocurrency work?

Cryptocurrency operates on a decentralized blockchain platform, eliminating the need for third-
party intervention. When transactions occur, information is transmitted through the blockchain
network to be verified by nodes in the system. Cryptocurrency mining is the process of creating
new coins by solving complex mathematical problems. Users store cryptocurrency in digital
wallets and conduct secure transactions using a pair of public and private keys. Cryptocurrency
is a decentralized, transparent, and secure payment system.

3. Give some examples of cryptocurrency

Bitcoin, Ethereum, Litecoin, Ripple

4. How to buy cryptocurrency?

Step 1: Choose a platform: Decide between a traditional broker or a cryptocurrency exchange.
Step 2: Fund your account: Deposit fiat currency via debit/credit cards, ACH transfers, or wire
transfers.
Step 3: Place an order: Use the platform's interface to buy or sell cryptocurrency.

5. How to store cryptocurrency?

 Choose a wallet: Use a physical device or online software to store private keys securely.
 Consider hot (online) vs. cold (offline) wallets for different security levels.
 Ensure security measures like strong passwords and backups.
 Be cautious online and avoid sharing sensitive information.

6. What can you buy with cryptocurrency?

You can buy various products and services with cryptocurrency:
 Technology and electronics from websites like newegg.com, AT&T, and Microsoft.
 Items from e-commerce platforms like Overstock, Shopify, Rakuten, and Home Depot.
 Luxury goods such as watches from Bitdials.
 Cars from car dealerships, ranging from mass-market brands to luxury dealers.
 Insurance policies from companies like AXA and Premier Shield Insurance (for select
policies).
 If a retailer doesn't directly accept cryptocurrency, you can use a cryptocurrency debit card
like BitPay in the US to make purchases.
7. Cryptocurrency fraud and scams
 Fake websites offering guaranteed returns on investments.
 Virtual Ponzi schemes like BitClub Network, where old investors are paid with new investors'
money.
 Scammers impersonating celebrities to endorse fake investment opportunities.
 Romance scams where individuals are tricked into investing in cryptocurrencies.
 Fraudulent virtual currency traders or exchanges.
 Bogus sales pitches for individual retirement accounts in cryptocurrencies.
 Direct hacking of digital wallets to steal cryptocurrency.
8. Is cryptocurrency safe?
Cryptocurrencies are constructed using blockchain technology, which securely records
transactions in blocks with timestamps. Despite security measures like two-factor
authentication, they remain vulnerable to hacking, as evidenced by significant breaches like
those affecting Coincheck and BitGrail in 2018. Unlike traditional currencies, cryptocurrencies'
value is driven solely by supply and demand, leading to price volatility. Moreover,
cryptocurrency investments lack the regulatory safeguards of traditional financial products.

9. Tips to invest in cryptocurrency safely?

 Research exchanges: Explore various cryptocurrency exchanges, read reviews, and seek
advice from experienced investors before investing.
 Understand storage options: Learn about digital wallets and exchange storage options. Each
has its benefits, technical requirements, and security features.
 Diversify investments: Spread investments across multiple cryptocurrencies instead of
focusing solely on popular options like Bitcoin.
 Be prepared for volatility: Cryptocurrency markets are highly volatile, with significant price
fluctuations. Ensure your investment portfolio can withstand such volatility.
 Consider the speculative nature: Cryptocurrency is still emerging and speculative. Invest
conservatively and be prepared for challenges.