Before You Consider Purchasing A Crypto Currency, Make Sure You Understand How They Work And The Risks Associated With Them. 

CryptoCurrencies, such as Bitcoin, Ether and LiteCoin, are digital mediums of exchange that use Cryptography as a method to help ensure the security and data integrity of the system. 

Different CryptoCurrencies can be used in different ways. For example, some may be used as a way to purchase goods or conduct business online.

CryptoCurrencies are not issued or backed by a central bank or monetary authority and in many cases CryptoCurrencies have not been subject to traditional financial sector regulations. However, this may change as Governments and Regulators around the world consider new rules to oversee the use and sale of CryptoCurrencies. Some CryptoCurrencies, particularly those offered in initial coin offerings (ICOs) and initial token offerings (ITOs), may be subject to securities regulation. 

How CryptoCurrencies Work?

In some ways, sending and receiving CryptoCurrencies is a lot like sending email. To start receiving email, you create an email address that you can share with other people. To send an email from that address, you need to know both your address and a password, which only you know and which you don’t share with other people. Similarly, to acquire CryptoCurrencies, you are assigned an Address (often called a “public key”) that you can share with others. When you obtain an Address, you also receive a Password (called a “private key”) that you can use to send CryptoCurrency from your address, and which you do not share with other people. 

Purchasing CryptoCurrencies

CryptoCurrencies are often purchased through online CryptoCurrency Trading Platforms (commonly called CryptoCurrency “exchanges”), which allow users to buy, sell or exchange cryptocurrencies for other cryptocurrencies or conventional money (like dollars), often for a fee.

CryptoCurrency trading platforms operate around the world. These platforms may be especially susceptible to fraud and market manipulation. In addition, the same CryptoCurrency may trade for significantly different prices on different platforms. These platforms are also subject to significant operational risks: because they hold the private keys for their users’ CryptoCurrency, they are often the target of Cyber Attacks intended to gain access to these keys and steal users’ CryptoCurrency. Cyber Attacks may also be intended to disrupt trading on these platforms. 

Users may experience problems placing and executing trades over a platform, due to technical problems on that platform or because the platform has temporarily halted trading in one or more cryptocurrencies. In addition, there is no guarantee that a platform will have sufficient cash on hand to meet users’ withdrawal requests. These platforms typically place limits on the amount of cash that a user can withdraw in a single day.

Some companies offer cryptocurrencies for sale at a physical kiosk, often branded as an “ATM,” which lets you insert cash in exchange for a CryptoCurrency. If you already have a public key, the kiosk can send your CryptoCurrency to that public key; otherwise, the kiosk often can assign you new public and private keys and then print these keys off for you on a slip of paper. Before purchasing cryptocurrencies at a kiosk, make sure you understand the fees you are being charged. Keep any private keys you receive secure, and do not share them with anyone. 

CryptoCurrency Risks

Before you consider purchasing any type of CryptoCurrency, understand the risks, including:

• High Volatility – CryptoCurrencies are prone to large swings in market value, gaining or losing hundreds or even thousands of dollars over the course of a day. This makes holding cryptocurrencies risky; any CryptoCurrencies you own could stand to lose some or all of their market value at any time.
• Lack Of Oversight – Regulation and oversight are intended to protect the interests of users. In the absence of regulation and oversight, a user may be left with few remedies if they lose money as a result of a CryptoCurrency transaction. 
• Risk of fraud – Some fraudsters have tried to capitalize on market interest in cryptocurrencies by creating new scams, or rebranding existing scams. They are looking for people who are seeking opportunities to get in “on the ground floor” with cryptocurrencies.