What are digital currencies? A cryptocurrency is a type of digital cash, which is a different way to pay that is made with the help of encryption methods. Because they use encryption technology, cryptocurrencies can be used as both a payment and a way to keep track of money online. You need a cryptocurrency wallet in order to use coins.
These wallets can be software that runs in the cloud, on your computer, or on your phone or tablet. Wallets are the place where you keep your encryption keys, which are used to prove who you are and link to your cryptocurrency.
What are the dangers of using digital currencies? Cryptocurrencies are still fairly new, and the market for these digital currencies is very unstable. Since cryptocurrencies don’t need banks or any other third party to control them, they are usually not protected and are hard to turn into US dollars or euros.
Also, since cryptocurrencies are intangible assets based on technology, they can be stolen just like any other intangible asset based on technology. Lastly, since you put your cryptocurrencies in a digital wallet, if you lose your wallet (or access to it or copies of it), you’ve lost your entire cryptocurrency investment.
