What Is Cryptocurrency, And How Does It Work?

Cryptocurrency is an interesting new technology, but for many it seems to be something complicated. Let’s take a look at a few simple crypto terms to understand what cryptocurrency is, how it works, and how to buy crypto. 

How does crypto work?

So, how does cryptocurrency work? Cryptocurrency is a digital asset built on a blockchain, a decentralized database of transactions that consists of a chain of blocks with information. Every time someone buys crypto, this information gets recorded. These records cannot be changed. 

Decentralization and no control from governments or financial institutions removes a lot of risks, problems, and the possibility of your funds being blocked.

Types of exchanges 

The most popular way of how to purchase cryptocurrency is to do it on crypto exchanges. These platforms are divided into two types:

• CEX (centralized) is managed by the platform administration that acts as an intermediary between users and is responsible for the security and quality of services.
• DEX (decentralized) is an automated service based on blockchain technology without a single control center. Transactions take place directly between users without the participation of intermediaries.

Both types of exchanges have their own pros and cons, but CEXs are considered to be more beginner-friendly. 

WhiteBIT is the largest European centralized crypto exchange that offers more than 270 crypto assets and six fiat currencies, including USD, UAH, EUR, KZT, TRY, GEL. The total number of trading pairs is 350+.

The process of buying crypto on WhiteBIT:

• sign up on the exchange;
• pass KYC verification;
• go to the Main balance and deposit fiat currency (EUR, USD, etc.) using the payment system you prefer;
• transfer fiat to the Trade Balance;
• go to Trade, select the desired trading pair and place a trading order (executed instantly or upon reaching the specified conditions).

Now that you understand the basics, you can try your hand at cryptocurrency trading. Before doing it, do your research and invest only the funds you’re ready to lose.