How to own a piece of the Crypto pie
There is some joy that comes with having something you can call your own. One of the ways you can do this is by adding digital assets to your existing portfolio. In the previous article, we focused on the introduction to cryptocurrencies and blockchain. To enhance free and fair elections, countries should consider adopting voting systems that are built on blockchain technology! Currently, this technology is being deployed to improve healthcare.
Before we dive into it, let’s remember that cryptocurrencies are digital currencies. Like fiat currencies, they can be used as a store of value or as a means of exchange. In addition, just like fiat money, cryptocurrencies are stored in a wallet but in this case a digital wallet. Wallets are classified into hot or cold. A hot wallet is linked to the internet whereas a cold wallet is “offline” and is also termed a hardware wallet. After a basic understanding of cryptocurrencies, it might be time to consider owning a piece of the crypto pie.
Various ways to own some crypto
- Through mining.
Mining is the process of validating cryptocurrency transactions on a blockchain network and adding them to a distributed ledger. Through this process, new coins are created. Special machines solve cryptographic hashes (which are complex mathematical difficulties). Miners compete with other (peers) and the one that solves the difficulty first adds the block on the distributed ledger and receives the reward.
Mining requires a specialized Graphic Processing Unit (GPU). In earlier days, mining used to happen on normal computers using a special CPU chip Currently, application-specific integrated circuit (ASIC) miners are used. However, miners consume a lot of electricity and need to be connected to a reliable source of power. It would also be more profitable to do pool mining rather than mine as an individual. All miners are required to be part of an online crypto mining pool.
2. Buy crypto from a centralized exchange
You can also consider buying your digital assets from an exchange. As the name suggests, an exchange is a platform where you can buy and sell or exchange one crypto for another.
Many exchanges require one to submit personal information such as full name, location, and identification documents. The Know Your Customer (KYC) process helps identify that the customer is the person they claim to be and prevents incidents of illegal activities such as money laundering, tax evasion, funding terrorism among others. Although one may still create an account in an exchange without being KYC-verified, the account may be limited until verification is successful.
A centralized exchange is where the assets are held by an escrow service and the “middle man” element is in play.
Some of the popular exchanges include KuCoin, Coinbase, and Binance.
3. Peer-to-peer transaction
A peer-to-peer transaction is a form of decentralized exchange that does not use escrow services. This creates a “trustless” environment. The individuals or groups involved can stay anonymous. This may be riskier than when you opt to use a centralized exchange since the parties involved are not verified.
Peer-to-peer exchanges allow parties to buy crypto with cash or other forms.
4. Performing tasks to get crypto rewards
Some projects require users to perform tasks and earn crypto rewards upon successful completion of the tasks. Others offer referral bonuses as well. For example, Adbank has the BLADE app where users perform tasks and get rewarded with ADB tokens. In addition, users get a referral bonus when they invite their friends to use the app.
Now that you know how to own a piece of crypto pie, we shall discuss ways to grow your crypto portfolio in the next article.
Whereas adding crypto assets to your investment portfolio is something worth considering, it would be prudent to research and decide what you want to achieve before venturing into the crypto space.
The writer is the Marketing Coordinator at Adbank. Earn #freecrypto with the #BLADE app.