Post Menu and Details.
- What is the technology on which bitcoin operates?
- What are crypto banks?
- How to invest in cryptocurrency through crypto banks?
- What is the difference between traditional banks and crypto banks?
- What is the role of blockchain technology?
Reading time: ~4 minutes
You must have heard about bitcoin or cryptocurrencies. Cryptocurrencies are internet money whose value grew from zero to $60,000 in 2021. So what is the exact meaning of cryptocurrency? Why it rose to prominence? Is bitcoin different from cryptocurrencies? Cryptocurrency is a decentralized digital currency that works on a distributed ledger known as the blockchain. Anyone across the world can access cryptocurrencies using an internet connection to send, receive and store them. All you need is an internet connection to transfer money, as cryptocurrencies are global currencies that can be accessed from anywhere and by anyone.
Bitcoin is also a cryptocurrency, but it is the first cryptocurrency that was created in the crypto world. All cryptocurrencies other than bitcoin are known as altcoins. Bitcoin is one of the most established cryptocurrencies across the world. It was launched back in 2009, and the market capitalization of bitcoin has crossed $1 trillion. It is the only cryptocurrency that is used as both a medium of payment and a store of value. Some crypto analysts even compare bitcoin with cold and refer to bitcoin as “digital gold.”
What is the technology on which bitcoin operates?
Cryptocurrencies are digital assets that all operate on a distributed, open, public, and permissionless ledger known as a blockchain ledger. The blockchain ledger records all the transactions of bitcoin publicly and that too in real-time without involving third parties. Blockchain is a long chain that is composed of multiple nodes (computers/participants) who does the work of solving complicated mathematical puzzles to verify the bitcoin transactions. The transactions are recorded in the blockchain, making it a secure network to store and transfer data. To know more about bitcoin, you can visit here primebitprofit
Earlier, if anyone wants to sell or buy cryptocurrencies, there were only a few options, but today crypto banks have emerged like traditional banks. So, let us know what exactly crypto banks are and how are they useful?
What are crypto banks?
Crypto banks are the banking and investment online applications that allow users to buy, sell and hold digital currencies in an easy and safe manner. Unlike crypto wallets, crypto banks provide prepaid debit cards, cryptocurrency wallets, and federally insured bank accounts. Another best thing is that services offered by crypto banks are regulated. Earlier, there were only a few crypto banks like Wirex, Bitwala, and Coinbase, but today, there is a long list of crypto banks that is growing at rapid speed.
The new crypto investors should definitely go with crypto banks as it is extremely safe to open an account with crypto banks.
How to invest in cryptocurrency through crypto banks?
The concept of cryptocurrency and its market is slightly complicated as compared to bonds or stocks, but investing in cryptocurrencies will definitely provide you with unexpected returns. Also, investing in cryptocurrencies through crypto banks is a simple process. Let us explore the process of buying cryptocurrencies through some points that are as follows:
- Signup on the crypto bank and register by providing the required details like name, email address, and more.
- Make sure to complete the Know Your Customer (KYC) process. Users need to submit the documents required to complete KYC. It is a time-taking process as it might take a few hours or a day.
- Ensure to create a backup of your digital wallet so as to secure it and get hold of your coins even if any loss or hack takes place.
- You will see a long list of cryptocurrencies offered by crypto banks. Select the cryptocurrency that you want to invest in and decide the number of crypto coins that you want to buy.
- Make sure to input the right details of your banks or the method from which you want to buy coins.
- Input the right details and click on the option of buy and wait to get the transaction completed.
These are the specific steps that every investor needs to follow. Additionally, it is important to have a crypto wallet first to store your crypto investment. The process of buying bitcoin may be different from one crypto bank to another, but most of these steps are the same on all platforms.
What is the difference between traditional banks and crypto banks?
Cryptocurrencies and blockchain have become the talk of the town. These topics are the only ones that are discussed in the financial market. People faced a global financial crisis in 2008, and during that time, the crypto industry introduced the new cryptocurrency known as bitcoin. This made all the investors and traders get attracted to a cryptocurrency that is independent of banks and the government. People lost their trust in traditional banks and fiat currencies that the government issued.
Today, cryptocurrencies have proved their potential, attracting massive users to invest in cryptocurrencies and earn amazing profits. Traditional banks take a lot of time in processing the transactions and involve many intermediaries. Along with it, each transaction and data were shared with the government, which means there was no space left for the privacy of users. This attracted people, and they started investing and using cryptocurrencies to perform transactions and for investment purposes.
Increasing users of cryptocurrencies have led to increased demand for platforms that allow easy buy and sell of crypto coins. This led to the development of platforms known as crypto banks or crypto exchanges that provide convenience to users to buy, sell, hold and store cryptocurrencies.
What is the role of blockchain technology?
Traditional bank users faced a lot of obstacles with policy, interest rates, and regulations set by banks. On the other hand, the crypto payment systems offered great services to users by eliminating the need for intermediaries, and people find crypto banks more suitable that process transactions fast and also allow users to hold the digital currencies anonymously.
Satoshi Nakamoto, therefore, introduced the crypto banks that followed the decentralized blockchain technology for recording transactions. But this decentralized banking system also has its benefits and challenges that every user must be aware of.
Thank you for reading!