Ever since the cryptocurrency was developed, a lot of investors have been involved themselves with cryptocurrency. A lot of individuals have been investing, and right after you invest, a lot of people have been holding their cryptocurrency in the hope that it will get a higher value in the future; on the other hand, a lot of people have been spending their cryptocurrency for some reason. It can be to justify its liquidation, to keep the network running, or even when you just want to purchase something.
In storing your cryptocurrency, there are a lot of options to choose from; a crypto wallet is the most popular platform as of now. A crypto wallet can be the same as a digital vault in which you will be able to save and collect your cryptocurrency securely. In this platform, you can also send your cryptocurrency on other e-wallets and do transactions for your cryptocurrency. There are two classified wallet types, the hot and cold wallet, as they call it.
On the hot wallet, these are the online wallets that one can access on devices that can be connected to the internet, like computers or phones. This is the most convenient way in which you can store your crypto since most of the transactions on the blockchain system will be online. However, on hot wallets, it was developed to store a small or limited amount of cryptocurrency. Hot wallets are also prone to risks since they are connected to the internet; even though there is very little chance that you might lose your cryptocurrency, it can still happen. It may happen during transactions.
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Meanwhile on the cold wallets, this is the offline option of storing your cryptocurrency. Since this is an offline method and cannot be accessed on any device, there are fewer risks on storing and it is known as the safest way. This is not prone to hacks and cryptocurrency being stolen; that is because its address and the private key is not registered to the internet. Basically, it has specially designed software in which users can access to view their details and make configurations without the risk of their private key.
Spending your Crypto
Luckily just like traditional digital currency and physical money, options and possibilities have also opened up for cryptocurrency. Nevertheless, it is still important to remember that cryptocurrency is known as a store of value, which means the longer it is stored and existing, it may gain value or depreciate. It is also known to be compared to gold than it is to a traditional currency like the dollar, yen or pound. Cryptocurrencies’ value hiking wildly makes investors think twice about spending their cryptocurrency in exchange for goods and services that can also be bought with traditional physical money.
Right now, there are a lot of financial institutions making ways to normalise the use of cryptocurrency for merchants in day to day transactions. A lot of leading online retailers had also provided cryptocurrency option payment for their customers as well, like Microsoft, Shopify, Newegg, and Overstock, to name a few. In some cases like Etsy, even though they don’t directly accept cryptocurrency, their merchants have a way to accept cryptocurrency as a payment.
Even though it is not that popular to spend cryptocurrency offline, there are still merchants accepting cryptocurrency in an offline method, like Starbucks, Home Depot, and Whole Foods, to name a few.
Note: These cryptocurrency payment methods might not be available for all of their stores and are only available at select locations.
After investing in cryptocurrency, it is for you to decide what plans you have on it, whether it be storing to gain value over time or to use it as a payment for goods and services to serve its purpose. Nevertheless one must always consider cryptocurrency’s values, and should spend it in a wise way.