Cryptocurrencies have emerged as a revolutionary force in the world of finance, challenging traditional notions of currency and introducing a decentralized approach to transactions. Let us consider the fundamental concepts of crypto coins, the underlying blockchain networks, and the process of trading cryptocurrencies into fiat currencies.
What is cryptocurrency
Cryptocurrencies, often referred to as coins, are digital or virtual currencies that use cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies operate on decentralized networks based on blockchain technology. The first coin that was introduced was Bitcoin, Bitcoin was introduced in 2009. This coin was the pioneer in the cryptocurrency space, with the rise of Bitcoin, new coins were introduced, each with its unique features and use cases. These coins include Ethereum, BNB, Tron, Lite Coin, Dash Wallet, Bitcoin Cash, USDT, BUSD, Ripple, and DOGE.
Why cryptocurrency?
Blockchain, the underlying technology of most cryptocurrencies, is a distributed ledger that records all transactions across a network of computers. This decentralised and transparent system ensures that transactions are secure, verifiable, and tamper-resistant. Each block in the blockchain contains a list of transactions, and once a block is completed, it is linked to the previous one, forming a chain. This decentralized and immutable structure eliminates the need for a central authority, such as a bank, to validate transactions.
How Cryptocurrencies Are Created and Transferred
Most cryptocurrencies operate on mining, where powerful computers compete to solve complex mathematical problems. The first computer to solve the problem adds ‘a new block’ to the blockchain and gets rewarded with newly created cryptocurrency coins. This process creates new coins while validating and securing the entire network.
Once created, cryptocurrencies can be transferred between users through their respective blockchain networks. The decentralized nature of these networks ensures that transactions are secure, transparent, and resistant to censorship.
How can you store your cryptocurrency?
Cryptocurrency is built on decentralization which allows you to have total control over your coins. No need for a middleman or an entity such as banks or other financial institutions. For you to store or hold any coin, you need a decentralized wallet such as Trust Wallet, MetaMask, Phantom, Blockchain etc. These wallets give you absolute control over your digital funds making it impossible for anyone to have access to your funds. To get started with a decentralized wallet, you would need to download the mobile app from your app store or Play Store. Once you’ve downloaded this, a wallet can be created and secured with a 12 or 24 secret phrase. Do well to store your recovery phrase in a place that can’t be compromised.
Converting your Crypto to Local Currency
While cryptocurrencies have gained popularity as an investment, their practical use often requires converting them into fiat currency (traditional money like dollar or naira). The process of converting cryptocurrencies into fiat is known as “Trading.”
Here are the general steps involved in trading crypto into fiat:
1. Choose a Cryptocurrency Exchange: To sell your coin, you must use a cryptocurrency exchange. Some trusted exchange platform Includes Presto where you can seamlessly trade your cryptocurrencies to Naira.
2. Account Verification: Most exchanges require users to verify their identity before allowing fiat withdrawals. This typically involves providing identification documents like a passport or driver’s license. Presto only requires basic verification such as email or number verification.
3. Deposit Cryptocurrency: Transfer the cryptocurrency you want to sell from your wallet to the exchange platform.
4. Sell your desired amount: On the Presto, you can place a sell order for the amount of cryptocurrency you wish to convert into fiat. Transactions are confirmed in minutes.
5. Withdraw Fiat: Once your transaction is confirmed, withdraw the fiat currency to your linked bank account. Presto supports all the available banks in Nigeria.
Crypto is here to stay and as the narrative continues to develop, users need to stay informed and adapt to changes in financial technology to make informed decisions you can trust Presto to keep you updated on premium updates
Get started with Presto today.
