What is Cryptocurrency and How Does it Work?

Cryptocurrencies are digital finances that have almost the same application as traditional money but are less widespread among the masses. The principal focus of crypto is made on investment and trading. They are also used for paying for services and goods; you can book travel tickets, accommodation, etc. using crypto if the service company allows it, or you can order food in a restaurant, pay at a gas station, etc. provided that they support this option.

There are many crypto projects that sell their tokens at an early stage of development, similar to large companies selling their shares to attack investors.

You can become a crypto owner in these ways:

1. You can participate in airdrops of crypto projects
2. You can be a player of play to earn games
3. You can buy crypto on trading exchanges
4. You can mine crypto developed in the Proof-of-Work mechanism
5. You can stake coins based on the Proof-of-Stake consensus.

We will talk about how to buy crypto.

To buy digital coins, most people register on large trading platforms such as the well-known Binance and popular in Europe WhiteBIT. These centralized exchanges make it possible to buy cryptocurrency with fiat money using a bank card. You can not do the same using decentralized platforms because in order to attach a bank card, a user needs to be verified, and to pass verification, there must be a central authority that does it. KYC is a know-your-client process that includes checking a user's documents to make sure one is not involved in any illegal activity. Only verified clients can access the full range of exchange tools and unlimited withdrawals. Without KYC, you can only do simple swaps on a spot market with limited withdrawals allowed.

Here is how the process of buying crypto looks like:

• Register an account and pass KYC
• Then when your bank card is attached, you may transfer the needed amount of funds to the account
• Then go to the trading section and find a calculator
• Choose the asset you wish to buy and the currency you have in your account
• See the current market price for your trade and the fee
• Pay the fee, and you will receive crypto coins to your account in a matter of seconds.

Then you may move your coins to an offline wallet - a ledger, for example, if you don't want to keep your funds on an exchange, or you may trade and convert your coins to others and generate income. Learn more about crypto investments on the WhiteBIT blog.