How to Use Cryptocurrencies

Cryptocurrency is everywhere these days, so is it time you started using it too? If you're considering introducing crypto coins into your everyday life, but you're not sure where to start, you're in the right place. Here you'll learn everything you need to know about how to use cryptocurrencies, including what they are, their pros and cons, the kinds of things you can do with crypto, where to buy them, how to use them and, perhaps most importantly, how to keep them safe.

What is Cryptocurrency?

A cryptocurrency is a form of money that can buy and sell things or trade for profit. Crypto comes from the Greek kruptos, meaning hidden, which means that every transaction is protected by a decentralised system using cryptography and is virtually impossible to hack or abuse.

Cryptocurrencies are referred to as coins, but they are digital-only currencies. The movement and creation of crypto coins such as Bitcoin are recorded and verified by blockchain technology, a virtual ledger of all transactions.

You can buy cryptocurrencies or create them, as is the case with Bitcoin, which can be mined. Bitcoin mining involves harnessing the problem-solving capabilities of computers to verify blocks in the blockchain, with crypto coins offered as a reward for completion.

There are somewhere in the region of 19,000 cryptocurrencies currently being publicly traded. Here are several of the most popular cryptocurrencies in circulation.

Bitcoin

Launched in 2009 by the person/group called Satoshi Nakamoto, Bitcoin was the first cryptocurrency and is still the most popular crypto coin today. Abbreviated to BTC and carrying the symbol ₿, Bitcoin can be bought or mined and is accepted at a wide range of online sites, including various Bitcoin online casinos. Though it has been in circulation for many years, the cryptocurrency is still subject to market fluctuations, making it pretty volatile.

Litecoin

Whereas Bitcoin mining only uses the GPU of computers, Litecoin, invented in 2011 by Charlie Lee, also harnesses the CPU, making transactions much faster and more efficient. Inspired by Bitcoin, Litecoin, abbreviated to LTC and using the symbol Ł, is still almost identical to the original coin in almost every way, making it a popular alternative to BTC. Litecoin is accepted at many online locations, including many online casinos.

Ether

Crowd-funded into existence in 2015 after its creation by Vitalik Buterin in 2013, Ether, abbreviated to ETH and carrying the symbol Ξ, is another very popular cryptocurrency. Ether operates on its decentralised blockchain platform called Ethereum, the most common platform for NFTs. The altcoin (alternative to Bitcoin) is second only to Bitcoin in market share. It is accepted at many sites, with numerous crypto casinos also offering deposits and gameplay in ETH.

Dogecoin

Launched in 2013 by Billy Markus and Jackson Palmer, Dogecoin started life as a satirical response to Bitcoin and claimed it would take over the world. Abbreviated to DOGE and the symbol Ð, Dogecoin features the Shiba Inu dog from the hugely popular meme. Its widespread use is also a result of much faster transaction confirmation times, with Dogecoin's 1 minute much more attractive than Bitcoin's 10.

Tether

Created and launched in 2014 as Realcoin by Reeve Collins, Brock Pierce and Craig Sellars, Tether is a unique cryptocurrency. Its value is tied to a fiat currency, the US dollar, with 1 Tether always being equal to $1. As a result, its abbreviation is USDT and carries the symbol ₮. The idea behind such a cryptocurrency was to sidestep the volatility issues that many other coins experience, with USDT given the appropriate label of stablecoin to reflect this. It's debatable whether Tether can be classed as a true cryptocurrency, as it isn't technically decentralised, and the issuing company's legal problems stemming from the revelation that only 2.9% of circulating coins are backed by actual USD also make the coin somewhat controversial. However, it is still a very popular choice.

Pros and Cons of Cryptocurrency

When debating whether or not to start using cryptocurrency, it's common to feel a little apprehensive as the coins are still relatively new compared to traditional fiat currencies. As with any life change, it pays to do a little research to see if this new way of transacting is suitable for you.

Opinions on cryptocurrency vary, with some thinking it's the future of money while others believe it's just a passing phase. To help you decide where your opinion lies, here's a look at the pros and cons of cryptocurrencies.

Cryptocurrency Pros

There are numerous reasons to suggest that the uptake of cryptocurrencies is beneficial:

• Decentralised: About all cryptocurrencies are decentralised. This means their supply and verification are not controlled by a single entity but rather by the general public. As a result, many people believe that cryptocurrencies are more secure and less likely to be devalued through banking actions such as inflation.
• Investment value: Many see cryptocurrencies as a way to make money, with their growing popularity suggesting the value could be increasing. Some investors choose to buy cryptocurrencies to safeguard their assets against the threat of another financial crash.
• Security: The blockchain technology on which cryptocurrencies operate results in much higher security than traditional fiat currencies. The encrypted nature of the recorded transactions makes it virtually impossible for fraudsters to take advantage.
• Anonymity: Cryptocurrency transactions do not require any personal data at any stage, making them perfect for those who wish to remain anonymous in their online activities.
• Passive income potential: Unlike traditional fiat currencies, some cryptocurrencies offer the opportunity to generate a passive income, such as the case with Bitcoin mining (i.e. using your computer to verify transactions on the blockchain) and crypto staking (i.e. checking the validity of blocks in the blockchain to prevent fraud). This is an attractive feature of cryptocurrencies, with many enjoying the extra independence of a passive income.
• Way out of financial inequality: Many typically underserved communities see cryptocurrencies as a way of levelling the playing field. To date, El Salvador and the Central African Republic are two countries that have made Bitcoin legal tender to improve their respective economies.

Cryptocurrency Cons

As with all things in life, there are a few drawbacks to cryptocurrencies that you should be aware of:

• Early days: Cryptocurrencies are still very fresh and new compared to traditional fiat currencies and their supported systems. Many people are holding back on venturing into this new arena until it has been proven by the test of time.
• Volatility: Unlike traditional currencies, whose values tend to be pretty stable over time, cryptocurrencies are still highly volatile. Crypto coin values can also be affected by many more influences, such as the opinions of others (particularly those in the public eye and those who may have large stakes in the various cryptocurrencies) and advances/bugs in the technology.
• Legalities: Cryptocurrencies are still unfamiliar territory for most countries in the world, with a few locations even banning them entirely. Though many governments are moving to incorporate cryptocurrencies into the system, it will take time.
• Environmental impact: A Cambridge University study recently concluded that the yearly Bitcoin mining energy output exceeds 121 teraWatt hours, more than the total energy requirements of large countries such as Argentina and the Netherlands. This is a result of the vast amounts of energy needed by mining computers, which has an impact on climate change. On the other hand, not all cryptocurrencies are such massive power drains. Some Bitcoin mining operations have committed to reducing their impact on the environment by pumping the generated heat into local communities, offsetting their energy consumption and using renewable power sources.

Why Buy Cryptocurrency?

You'd want to buy cryptocurrency as numerous as the reasons we use traditional currencies. In general, cryptocurrencies can do many of the same things that you use your current local currency to do. The only caveat is that there aren't quite as many sites accepting cryptocurrencies as those accepting fiat currencies, but the numbers are increasing.

So, what sort of things can you do with cryptocurrencies? Here's a look at the most common uses for crypto coins that you might think about partaking in yourself.

Investment

One of the biggest reasons people are buying cryptocurrencies right now is for the investment potential. Many people see cryptocurrencies as the money of the future and an inevitable and long-awaited step in our financial evolution. As more people start using these alternative coins in their daily lives, their stability increases and their value. Investors foreseeing an upward trend in cryptocurrencies take advantage by buying the crypto coins in large amounts. At the same time, the value is still low in the gamble that it will increase over time. They can then sell their more valuable cryptocurrency stocks for a profit.

Online Shopping

Cryptocurrencies are also changing the way we do business online. Just as online shopping was initially regarded as unsafe and untrustworthy, online cryptocurrency purchases are not yet as common as traditional money buying and selling. Still, new sites accepting the various crypto coins are popping up regularly. A wide range of existing retailers in various markets offers cryptocurrencies as a form of payment, including Microsoft, Amazon, Home Depot and more. You can also use your crypto funds to buy gift cards in traditional currencies.

Online Gambling

One industry that has seen a significant uptake in cryptocurrencies is online gambling. An increasing number of crypto online casinos and sports betting sites accept deposits and even allow you to play and bet in various popular cryptocurrencies. Members of these sites can use their cryptocurrency balance to access a wide range of industry-leading casino games such as slots, Blackjack, Roulette, Poker and Baccarat and bet on top world sports and esports.

Crypto casinos, as they're often referred to, also offer the unique ability to play a separate collection of provably fair games that use blockchain technology to verify the fairness of their outcomes. One of the many advantages of cryptocurrency casino gaming is the opportunity to win real crypto funds if you strike it lucky, adding an element of investment potential to your entertainment.

Where to Buy Cryptocurrency

The first thing you'll need to do if you want to use cryptocurrency is getting some! That means locating a site that allows you to buy cryptocurrency. Two main types of sites offer you the opportunity to buy crypto coins: centralised and decentralised exchanges, each offering pros and cons.

Centralised Exchanges

The most common site for buying cryptocurrency is a centralised exchange (CEX). Think of these as your typical high street bureau de change: they offer a wide range of cryptocurrencies in exchange for your money at market value rates, with a small percentage of commission charged for the service. The advantages of these centralised crypto exchange sites are that they're easy to use, ideal for beginners, and offer a level of security in their oversight of every transaction. On the downside, since these sites attract traffic, they can be a target for hackers.

Decentralised Exchanges

Decentralised exchanges (DEXs) offer extra security for those who are a little savvier regarding the technical aspect of cryptocurrencies. These sites offer a platform via which individuals can trade with each other directly without paying excessive fees for the privilege. As a result, you can expect fees to be much lower. The drawback is that you need some confidence and skill to navigate these peer-to-peer sites, but many feel the reduced threat of cyber attacks is worth the effort.

How to Buy Cryptocurrency

Buying cryptocurrencies is just as simple as getting your money exchanged for the local currency of your next holiday destination.

Here's a step-by-step guide on how to buy cryptocurrency:

1. Choose your exchange: Decide whether you want to use a centralised exchange such as Binance or Bitfinex or a decentralised exchange such as Coinbase, Gemini or Kraken.
2. Select payment method: Whether you're using a centralised or decentralised exchange, you'll be able to buy crypto coins using your currency, e.g. USD, GBP, EUR or even your existing cryptocurrency if you have it, e.g. BTC to ETH. The most common payment methods tend to be debit/credit cards and bank transfers.
3. Pick a storage option: While many people choose to keep their purchased cryptocurrency on the exchange at which they bought it, you also have the option of storing it in a digital wallet. Hot wallets such as Trust Wallet and Coinbase Wallet have some online connectivity for ease of use. In contrast, cold wallets like Ledger and Trezor are completely offline, physical devices for maximum security crypto storage.

Keeping Your Cryptocurrency Safe

Just like you wouldn't go running through the streets flashing the contents of your wallet, there are certain actions you should avoid if you want to benefit from the extra security and anonymity of cryptocurrencies.

Private Key

One of the most important aspects of cryptocurrency wallets is your private key. Think of this as the PIN for your bank or credit card: if someone gets hold of that, they could potentially drain your account. The private key to your cryptocurrency account gives you access to your funds and allows you to complete transactions. Do not share this private key with anyone. In addition, because of the nature of cryptocurrencies, there is no way to retrieve this key if you forget it, so make sure you memorise it, write it down, and keep it safe to refer back to it if you need to.

Storage

As mentioned above, exchanges and wallets all have varying degrees of protection against security threats. If you choose to store your coins on the exchange site where you purchased them, take extra care not to share your login details with anyone and use multi-factor authentication.

If you prefer to keep your crypto coins in a digital wallet, bear in mind that not all wallets are created equal. Hot wallets are specially designed for crypto storage and give you the added benefit of limited online connectivity. However, that connection is secure and still offers that connectivity potential gateway to your coins by unscrupulous hackers. It might be worth using a cold wallet, an offline, physical device that you can keep your coins on for the ultimate security.

How to Spend Cryptocurrency

Spending your hard-mined coins is just about the same as using an online payment service such as your PayPal account. All you need to do is select your cryptocurrency as the payment method, and you'll usually be directed to your exchange/wallet to log in and complete the transaction.

Since online gambling is one of the most popular uses of cryptocurrency, let's take a look at how to deposit at a crypto online casino as an example:

1. Sign up: Choose a trustworthy online casino that's been carefully reviewed on various markers, such as those featured on our site and open an account.
2. Visit the Cashier: Once logged in, access the cashier or click on the deposit button, and you'll be taken to the list of available payment methods.
3. Choose your payment method: Crypto casinos offer members the ability to deposit in numerous cryptocurrencies such as Bitcoin, Litecoin, Ether, Dogecoin, Tether and others, either by depositing to the casino directly or via a range of popular wallets. Click to choose the option you prefer.
4. Copy/Scan: At this stage, you'll either be required to copy the online casino's wallet address, or you'll be asked to scan the QR code to visit the exchange/wallet's website with the details prefilled.
5. Enter and confirm how much you want to deposit, then click to proceed with the transaction.

Deposited crypto funds usually arrive immediately, at which point you can then use them to play any of the online bitcoin slots.

Protecting Against Cryptocurrency Volatility

It's important to realise that cryptocurrency is not quite the same as traditional currencies in several key ways: their highly volatile nature. Unlike stable currencies such as USD, GBP and EUR, the value of cryptocurrencies can vary wildly from one day to the next, even from hour to hour. It's wise to protect yourself against such fluctuations by only investing small amounts.

What makes cryptocurrency casino gaming so attractive is that you have some control over the effects of market fluctuations by deciding when to deposit and withdraw. By depositing and playing when the value is low and withdrawing when the value is high, you can get the most out of every crypto coin.

The Legalities of Cryptocurrency

One final point about cryptocurrencies worth highlighting is that they aren't yet legal everywhere. In some countries, they are not legal, so it pays to do your homework and be aware of the current legal situation in your country.

Some countries are more restrictive than others regarding online crypto gambling, so check that gambling in your location is permitted before joining an online crypto casino.

Final Words

There's no denying that cryptocurrencies are here to stay in some form or another, so the sooner you can get to grips with these digital coins and understand how they work, the better. Though many people find the concept a little confusing, it only takes a few minutes to figure out what it's all about and realise that cryptocurrencies are available to anyone and everyone. Whether you're into the next big investment opportunity, want to convert your savings into something other than traditional cash, or fancy loading up your digital wallet with funds for online shopping or even casino gaming, it's all possible with cryptocurrencies.

FAQs

Need to know more about using cryptocurrencies? Check our FAQs.