What Is Digital Currency: A Guide for Beginners

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What Is Digital Currency: A Guide for Beginners

It’s hard not to hear about Digital Currency everywhere you go these days, but do you really understand what crypto is and how it works? This article will explain all the basics in easy-to-understand terms, for complete Digital Currency beginners.

What Is Digital Currency?

Digital Currency is a digital currency that is typically built using blockchain technology. Unlike traditional currencies, digital currencies are not issued or regulated by central authorities, such as governments or banks.

How Did Digital Currency Come About?

Digital Currency first came about after the 2007-2008 financial crisis. It was created as an alternative to the world’s traditional currency, with the goal of creating a currency that wasn’t dependent on banks and governments for value.

What Is Mining Digital Currency?

Mining in the name given to the process by which new Digital Currency is created and enters the market. Crypto miners compete against one another using large amounts of computer processing power to validate crypto transactions and earn crypto coins doing so.

How Does Digital Currency Work?

Digital Currency is bought and sold via various different exchange platforms, much like national currencies, stocks, and other investment assets. You can use crypto for buying and selling things, just like real money. Like other types of assets, the value of Digital Currency rises and falls, and different digital currencies have different values.

Centralized vs. Decentralized Networks

Digital Currency is a decentralized currency, meaning that it does not rely on a single network or entity to control it. Crypto is built on top of decentralized blockchain technology, which means that the technology behind it is distributed across a wide range of networks and computers. This is what allows digital currencies to exist outside of traditional currency frameworks created by governments and financial institutions.

What Are the Main Different Types of Digital Currency?

Digital Coins and Altcoin (e.g., Ethereum)

Digital Coins was the first major Digital Currency, and it’s still one of the most popular among crypto investors. After Digital Coins’s huge success, other types of Altcoins were invented in the same style. Two of the most popular Digital Coins alternatives are Ethereum and Tether.

Tokens

Crypto tokens are another popular type of Digital Currency that represents a specific asset. For example, blockchain-powered startups are issuing their own tokens that you can buy to own a stake in them, just like how stocks work.

What Is PI Digital Currency?

PI Digital Currency is a relatively new type of Digital Currency that runs on the Pi network. It is touted as being the first crypto that you can mine from your phone via a mobile app.

Are Digital Currencies Legal?

The legality of digital currencies varies across the world. At the time of writing, Digital Currency is legal in much of the world but has been banned in 9 countries, including China. Since it is decentralized, it is hard to regulate Digital Currency, and it still inhabits somewhat of a legal gray area in many countries.

Why Are Digital Currencies So Popular?

• Doesn’t rely on governments and banks for value
• The value of many digital currencies is going up
• May become the money of the future
• An alternative investment to stocks and other assets
• Can be used for a growing number of day-to-day transactions

What Is Digital Currency Used For, If It Isn’t Physical Money?

Even though it’s not physical money, Digital Currency functions like traditional currency. Other than buying and selling it purely for investment purposes, you can use Digital Currency to buy and sell regular things.

Though crypto is still not an accepted form of currency everywhere, more and more companies are starting to offer goods and services in exchange for Digital Currency payments. For example, you can buy food using crypto at some restaurants and fast-food chains, including Subway. You can even buy a Tesla with crypto now!

The Newest Digital Currencies of 2022: Both Fake and Real

Lucky Block

Lucky Block is a new Digital Currency described as a crypto lottery. However, as with many new digital currencies, it’s hard to verify information about the company and its technology, so investing in this crypto is truly a gamble.

Shiba Inu

Shiba Inu is a crypto that’s been making a lot of headlines lately because it’s what’s known as a “meme coin,” or a coin created as a bit of a joke. However, it is now considered a legitimate Digital Currency by many. You can buy and sell it just like major digital currencies, but it may be much more volatile than more established crypto brands, such as Digital Coins.

Squid Crypto

Squid Crypto was a Digital Currency inspired by the vastly popular Squid Game series, but it turned out to be a complete scam. In this case, the scammers operated what is known as a “rug pull” scam, meaning they built up a bunch of hype, sold a bunch of Squid Crypto to investors, then disappeared with the money and didn’t let investors resell their crypto.

What Is The Safest Platform To Buy digital currencies?

Coinbase is one of the most popular crypto exchange platforms. Another one that’s considered secure is Binance. Though it may be safe to buy and sell crypto on these platforms, it’s important to know that it is still possible to fall victim to Digital Currency scams. This is because the platforms do not have control over the legitimacy of the currencies that are traded on them.

How Do I Protect Myself From Digital Currency Scams?

To protect yourself and your wallet from crypto scams, it’s very important to do your research before committing to buying any Digital Currency. There are thousands of different types of crypto available these days, and there are lots of scammers taking advantage of naive investors.

When you’re considering buying Digital Currency, make sure to research the company thoroughly. Look up the people involved and read opinions and reviews from other people who have invested in the crypto already to make sure it’s not a scam. Also, be very wary of any promises that sound too good to be true, because they probably are.

If you’ve fallen victim to a Digital Currency scam, contact Payback today. We will do everything we can to help you get your money back.