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FAQ

Buying cryptocurrency has never been so easy

FAQ

What is cryptocurrency?

Cryptocurrency (or “crypto”) is a digital currency that can be used to buy goods and services, but uses an online ledger with strong cryptography to secure online transactions.

How are cryptocurrency transactions recorded? 

Cryptocurrency transactions are recorded on a shared, digital ledger called a blockchain. This is decentralized technology, spread across many computers, that records every transaction. 

Are blockchain and cryptocurrencies the same?

No. Blockchain is the technology that allows for cryptocurrencies to work. It is a decentralized and digital ledger of transactions used for cryptocurrencies and other assets/functions. It is important to separate the technology behind cryptocurrencies from the actual cryptocurrencies.

What are the top cryptocurrencies today?

The most popular and widely heard of cryptocurrency is Bitcoin. As of early January 2021, the total cryptocurrency market is over $1 trillion, and Bitcoin is around $700 billion. Believe it or not, there are over 7,800 cryptocurrencies in existence and growing. The top five, with over 80 percent of the market value, are Bitcoin, Ethereum, XRP, Tether, and Litecoin. 

What is Bitcoin?

Bitcoin is a first digital cryptocurrency. It was created in January 2009. It follows the ideas set out in a whitepaper by the mysterious and pseudonymous Satoshi Nakamoto. The identity of the person or persons who created the technology is still a mystery. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and, unlike government-issued currencies, it is operated by a decentralized authority.

Why are there so many cryptocurrencies?

People saw the success of Bitcoin and tried to improve existing functionality and provide new functionality with new cryptocurrencies. Additionally, investors and developers were certainly trying to make money.

Can cryptocurrencies fail?

Yes. It is estimated that close to 2,000 cryptocurrencies have failed. This is for a variety of reasons: lack of funding at start and after launch, failure to evolve, and a few were outright frauds. Many of the failures happened during the initial coin offering boom of 2017–2018.

What is a crypto wallet?

Simply put, crypto wallets are places to store digital assets more securely than just on an exchange.  You hold your wallet via an exchange account, custody wallet, or outside of the exchange. You can establish an online or “hot” wallet that is internet connected—to your desktop, table or mobile phone. There is also the option to store on a device that is not connected to the internet (“cold” wallet). Cold wallets are the most secure way to store your cryptocurrency, but they are meant for longer-term holdings as they are not connected to the internet. With cold storage, you must remember your private keys (identifier number for your cryptocurrency).

Is it true you can trade 24/7?

Yes, on many exchanges you can place an order at 11 a.m. Sunday or any other day and time. Cryptocurrencies trade 24 hours a day, seven days a week, 365 days in year.

How volatile is it really?

Very! The charts below show the previous five-year price history Bitcoin and Ethereum. Each currency has experienced over a 50 percent drop in the past five years.

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