Cryptocurrencies are an alternative currency to some of the more familiar mediums of exchange. They are decentralised from a central banking system and work through a distributed ledger technology that essentially serves as a public transaction database. In 2009 we witnessed the first introduction of this technology through the likes of bitcoin. Today, there are over 4,000 altcoins – alternatives to bitcoins. If you happen to be a bit confused about the ins and outs of cryptocurrency, fear not, for you are not alone.
Buy It or Mine It
As you would do with physical money, with bitcoin you may purchase and sell goods using an online service. Should you wish to spend time mining bitcoin, instead of just buying it with a more common currency like the dollar or euro, you can run software on a computer in order to perform the complex operations that reward you with a portion of bitcoin. On your own, it will be highly unlikely that your computer can outperform other machines that are mining bitcoin at the same time. Instead, you could join a group in order to spread the workload and see some return in the form of bitcoin.
If you decide to buy or mine a cryptocurrency, you may be thinking about just what you can do with this alternative currency. At the moment you may buy and sell bitcoins as you would buy and sell shares. The price of bitcoin fluctuates and you should, therefore, be patient and remember: ‘buy low, sell high!’
What Can You Buy With Cryptocurrencies
Moreover, you could buy aeroplane tickets and pay for hotel bookings with cryptocurrency. CheapAir for instance, allows you to book your holiday – flights and hotels included – with bitcoin. You may also upload bitcoins to your Microsoft account allowing you to pay for movies, games and music.
A charming food delivery website by the name of pizzaforcoins now accepts over 50 different cryptocurrencies, and the crypto-friendly online retailer Overstock allows you to pay for laptops, furniture, televisions, etc. So that’s food and entertainment for you, what more do you need?
Since cryptocurrencies are not reliant on a third party, like a bank, to act as a mediator, the speed at which you can send a transaction is astounding. We all know that a bank transaction may take a few days in order to be completed – bitcoin transactions take less than a day. Moreover, banks tend to charge for their services when you wish to send money abroad. You can circumvent these charges through the use of cryptocurrencies.
Not all companies accept bitcoins and it is important to mention that before you decide to buy some, you should check the stores you tend to visit and see if they are crypto-friendly. Otherwise, you may be better off paying with regular currencies.