Cryptocurrencies are internet-based coins that can be used to pay for goods and services online or at physical locations. Unlike real-world currencies – with many being divisible by hundred, as the dollar – Bitcoin and other currencies can even be divisible by a million. In the case of Bitcoin, each fraction is called a Satoshi.
How to send and receive coins?
You can send coins (or fractions of coins) directly to an encrypted wallet held by another user. For this, you both need a wallet – a free piece of software that keeps your coins safe. The easiest way to send coins is to scan a code generated by either side of the transaction. This can be used to both send and receive funds. Each transaction comes with a fee, which fluctuates over time.
Urgent payment fees
Since Bitcoin is a very popular coin used by hundreds of thousands of people, there are many transactions being performed every day. That’s why it can take up to several hours for a transaction to be processed. Users who want their transactions to be processed quicker can pay a higher fee to have their transaction bumped to the top of the queue.
If you plan to send a significant amount of funds over the Bitcoin network, it is good practice to first send a single Satoshi. This is the smallest fraction of Bitcoin and is worth around a HUNDREDTH of a US cent, or TEN THOUSANDTH of a dollar. By sending this amount you can validate that the wallet exists and is owned by that particular receiver. Since Bitcoin transactions cannot be reversed, it’s is extremely wise to perform this step before sending large amounts. All standard fees apply
Different types of wallets
There are different types of wallets. The most common are wallets kept online. To use all of their functions, you need a password. There are other types of wallets, such as offline versions printed on paper, and hardware wallets that look like USB thumb drives. The later versions are considered safer because they are kept offline.
What is a private key?
Anyone can send money to a particular wallet, but in order to take funds OUT of a wallet, you need a private key. This is an alphanumeric code that gives you access to your funds and allows you to spend your crypto. When accounts are hacked, this is usually what is taken. That is why it’s essential that private keys are kept in a safe location.
What is a public address?
Have you ever seen a QR code on a website with a request to donate to a particular creator? This is a public address code. It allows anyone around the world to send money to a particular wallet. It’s impossible to withdraw money from any account just by knowing the public address
How to back up a wallet?
In order to back up a wallet, users need to generate a 12 or 24 – word backup phrase which can be used to recover access to a wallet in the case the device holding the wallet is lost or destroyed.
How to store a cold wallet?
A cold wallet is a way to store your crypto in an offline environment. Keep your hardware wallets and paper wallets in a dry, safe and temperature-controlled space.
The industry has largely adopted Google authenticator, a two-step verification software that makes it next to impossible for hackers to break into your system.
How to track transactions?
All Bitcoin transactions can be tracked on blockchain.com, by typing in the transaction hash number generated once the transaction is made. Click to see how to track mined Bitcoin Vault
List of trusted cryptocurrency wallets
Some of the most well known and trusted wallets in the industry are CoinBase and BitPay in terms of hot wallets, while Trezor and Ledger are two of the most popular cold wallets in the industry. It is recommended to do your own due diligence and make sure that you are using the most suitable digital wallet for your needs!
What are cryptocurrency exchanges?
A cryptocurrency exchange is a place where you can trade one cryptocurrency for another, or fiat currency for a cryptocurrency (and vice versa) or simply just purchase coins and add them to your wallet. You can do this with traditional credit cards or with our cryptocurrencies, or both, depending on the type of exchange. There are some exchanges that offer more coins than others, as well as more attractive layouts. Before choosing an exchange make some research about fees and spreads – the difference between the buying and selling price – because these can differ significantly between sites.
What to prepare for KYC/AML processes?
In order to set up an account with a reputable exchange, you will need to prove your identity. This makes the service safer overall. In order to do this, you will need to scan or show some kind of identity. Have at hand your driving license, government-issued identification card or passport. You might also be required to take a selfie or short video saying stating your identity together with the date. KYC stands for “know your client”, and AML stands for “anti-money laundering”.
Fees and rates of exchanges
Fees differ between exchanges and range anywhere between 0.05% and 6% per transaction. Always research the best option before committing to a transaction.
How to convert fiat to crypto
There are a number of exchanges that allow you to use your credit card to buy crypto. Some exchanges allow you to deposit money onto their account and then pay for crypto once you decide to buy. There are also P2P networks, and even crypto-ATM machines which you can use to do this.
List of trusted cryptocurrency exchanges
No two exchanges are created the same. Many exchanges are more convenient for beginners, while others enable features exclusively for professional traders. Coineal, Binance and Kraken are among some of the most popular and trusted exchanges in the world. It must be stated that it is very important to read Terms and Conditions, be aware of any fees and legalities, and your own conduct due diligence before using any cryptocurrency exchange.