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Contains commercial content / What is Cryptocurrency? 2023 Crypto Definition & Explanation

What is Cryptocurrency? 2023 Crypto Definition & Explanation

Alexander Foster
Alexander Foster
Last Updated on 19/11/2023

Your guide to cryptocurrencies – All about cryptos

We’re aware of the fact that many people might be completely new to cryptocurrencies. So we’ll make sure that you get all of your questions answered about the crypto revolution. So take a look below to see why getting into cryptocurrencies could be a great idea.

What is a cryptocurrency?

A cryptocurrency, or crypto, is simply a digital asset that works in a similar way to a regular currency like the British pound. As such, it’s basically a medium of exchange that you can use to buy goods or services. You can also receive payments in cryptocurrencies.

Yes, in the UK it is perfectly legal to use cryptocurrencies for buying things, trading or even playing casino games. Bear in mind that there are laws about who is allowed to host a crypto trading service or a cryptocurrency gambling platform. These laws are there to ensure that you receive adequate customer protection.

Are cryptocurrencies safe?

Yes, each cryptocurrency will use ultra-strong cryptography that verifies the transfer of the crypto assets and it secures each financial transaction. This cryptography is also used to limit the creation of additional units of the cryptocurrency.

How do cryptocurrencies work?

Regular currencies are centrally controlled by banking systems and financial organisations. Cryptocurrencies are different in that they use a decentralised system of control. As a result, each crypto transaction is held in a blockchain. This is a kind of distributed ledger technology that keeps a public database of each financial transaction featuring that cryptocurrency.

It’s been fascinating to see the many different ways that people use cryptocurrencies. From trading to gaming, there’s plenty of uses for this relatively new phenomenon. Here are some of the more common ways that you’ll be able to put your cryptos to good use.

Give crypto trading a try

Here’s where you simply get to speculate on the price movements of cryptocurrencies. For example, you could make a prediction that the price of Bitcoin is going to rise. Or you could predict that the value of XRP will fall. When you trade, you’ll basically be exchanging one cryptocurrency for another in a way that matches your prediction.

Don’t forget that the best kind of crypto platform UK has for trading will allow you to trade much more than cryptocurrencies. You might be able to do something like trade Litecoin for a fiat currency such as British pounds. Or you could even trade your Ether coins for a commodity such as gold. As long as it has a value you might be able to sell your cryptos in exchange for it. A great way to get started with cryptocurrencies without having to mine your cryptos. Here are the most common examples of things that you’ll be able to trade at a crypto trading site:

  • Cryptocurrencies: BTC, ETH, LTC, BNB, BCH, XRP
  • Fiat currencies: USD, GBP, EUR, AUD, CAD
  • Stocks: Apple, Alphabet, Facebook, Tesla, Amazon
  • Other: Indices, ETFs, CFDS, commodities

Getting started with crypto mining

This is where you get your computer to carry out a range of complicated arithmetical calculations where crypto transactions are verified and added to the blockchain. Sound fun? Probably not, but crypto mining is a great way of earning cryptocurrencies. Many people have found that cryptocurrency mining offers them a more reliable way to get cryptos compared to speculation such as trading.

Bear in mind that modern era Bitcoin mining requires a lot of processing power to achieve any kind of profitability. Despite this, mining can still be a great way to learn more about how cryptocurrencies work while earning a few more cryptos yourself. Here are some of the most popular cryptos to mine

  • Bitcoin (BTC)
  • Monero (XMR)
  • Ethereum Classic (ETC)

Take a spin with some crypto gambling

The crypto gambling scene has exploded in the past decade. This means that you can play a variety of classic casino games with crypto stakes and pick up your winnings in cryptocurrencies too. The range of casino games featured at crypto gambling sites is immense. You could play anything from a simple three-reel slot game to an immersive game of blackjack. As such it’s little surprise that gambling is one of the most popular ways for people to use their cryptocurrencies.

As a result, we simply had to carry out detailed crypto reviews of all top casino sites that accept cryptocurrency payments. This is because there are a handful of rogue operators out there, and we want to make sure that you get to play at a legit crypto casino. So we’ll be checking that each crypto casino featured here offers you a safe and legal way to play. Here are the five trust features that we look for in all crypto casino sites.

  • Licensing from the UK Gambling Commission
  • SSL level encryption technologies
  • 24/7 customer support
  • Responsible gambling tools
  • Good reputation from customers

Why you should trust our crypto reviews – Transparency and honesty

While the cryptocurrency revolution is hugely exciting, it can also be confusing. After all, there is a large amount of misinformation out there so that you can often be led astray. This has been made all the more difficult as a result of a range of dodgy providers who went out of their way to deceive people who wanted to invest in Bitcoin for the first time around. Such occasions didn’t just happen during the ‘ICO gold rush’, but they continue to this very day. The ongoing popularity of Bitcoin and the hype that it generates unfortunately means that there will be plenty of swindlers out there.

So this is why we have worked hard to ensure that you get to use a crypto platform UK users can trust. Our reviews are all carried out by our team of cryptocurrency experts who are more than happy to call out a bad operator if it has been found that it offers a less than satisfactory service. We should note that we are completely unaffiliated with all of our featured crypto brokers and recommended cryptocurrency  gambling sites. The only reason that we’d suggest that you use a crypto platform is if we truly believe that it’s legal, safe and offers good value for money.

Tips for crypto newbies – Great cryptocurrency advice for rookies

Everybody has to start somewhere. For those looking to buy their first cryptocurrency, it can seem like there are plenty of options. While this is undoubtedly a good thing, it can also be confusing to know where to begin. For example, should you sign up to a crypto broker? Or would a crypto trading site be a better option?

The key thing is to ask yourself what you want to use your cryptocurrencies for. If it’s a long-term investment that you might want to use a crypto broker, whereas if you’re just looking for entertainment, then a crypto casino might suit your needs better. However, regardless of what you want to use a crypto, there are some simple rules you should follow when you use cryptocurrencies.

Get a good crypto wallet

A wallet is where you’ll keep the private keys of your cryptocurrencies. It will basically let you stay in control of your assets. You’ll need to make sure that your wallet is safe enough to withstand hacking attempts, viruses and malware. This is why some people use hardwallets that aren’t connected to the internet. Bear in mind that hardwallets cost more cash up front, but they could save you a lot of money in the long run.

Find a decent broker or exchange

If you want to simply buy a cryptocurrency such as Bitcoin, you’ll want to use an exchange. Here you’ll get to buy a range of cryptos in exchange for your standard currency. You’ll be able to deposit money in the account that you create and then exchange it for cryptocurrencies from there. Bear in mind that online brokers will allow you to speculate on the price of cryptocurrencies without you actually owning the crypto itself.

Research the best cryptocurrencies

Everybody’s heard of Bitcoin. But there are hundreds of cryptocurrencies out there and more arriving on the scene all of the time. Each of these cryptos will offer something unique that could make it a great trading option. For example, Litecoin offers very fast transactions, while XRP’s parent company, Ripple, has become popular with the banking sector. As such it can really pay off to do your homework about what it is that makes each crypto unique. After all, it’s this attention to detail that will help you spot which cryptocurrencies to buy, and which cryptos to avoid.

Anticipate the volatility of cryptos

Volatility basically refers to how quickly the value of something changes. Most cryptocurrencies are very volatile. This means that the price of a crypto could shoot up one day, and then suffer a massive fall the next. As such, investing in cryptocurrencies can be pretty risky. Despite this, the value of cryptos like Bitcoin have shown some remarkable gains over the long term. This shows that timing is everything when it comes to crypto trading, and you’ll need to anticipate those crushing lows so that you can truly enjoy those soaring highs. The best way to do this is to be cautious with your investments and stay within your limits.

Get to grips with blockchain technology

You don’t have to be a complete nerd to know how cryptocurrencies work. But having a good understanding of blockchain technology can help you see the true value of these cryptocurrencies. You’ll see why there are regular ‘burnings’ of Binance Coin, and understand why there was a hard fork in Bitcoin that led to the creation of Bitcoin Cash. All of which will set you up perfectly for predicting the future price movements of your favourite crypto.

Realise the vulnerability of cryptos

It’s important to remember that cryptocurrencies have only been with us for little more than a decade. For every success story like Bitcoin there are hundreds of failed cryptocurrencies that fell by the wayside. As such, it’s always a good idea to treat the arrival of a seemingly exciting new crypto with a good amount of scepticism. After all, the price of Bitcoin plummeted by nearly half of its value on one day in 2017, and it could happen to your preferred crypto. As such it’s little wonder that the UK’s Financial Conduct Authority warns against investing in crypto assets. Despite this, it’s clear that many people have successfully added cryptos as part of a diversified investment portfolio.

Finding the best broker to buy crypto

There are many decent crypto brokers out there. Here are the key features that we look for in any broker who has cryptocurrencies.

  • Trading options – Make sure that the broker features your favourite crypto.
  • Online security – All good brokers will have encrypted websites to make sure that your data and deposits stay in safe hands.
  • UK broker location – A UK broker will be subject to FCA licensing which means that you’ll get a fair and honest trading service.
  • Transparent fees – You should know how much you’ll have to pay for each transaction that you execute.
  • Safe payments – You should be able to buy cryptos safely with fiat currencies or other cryptocurrencies

Crypto Reviews FAQ

💪What is the best crypto platform UK has at the moment?

There is plenty of debate about which is the best crypto platform in the UK. Ultimately it depends as each crypto UK user will be looking for something different. So be sure to read our crypto reviews where we’ll take a look at how well each platform can meet your needs. We’ll even help you see the best crypto to invest in.

💰What is the best way to buy crypto UK has to offer?

You’ll find that the UK currently gives you many different ways for buying a range of cryptocurrencies. This means that you can look forward to purchasing top cryptos like Bitcoin, Ether and XRP. We’ve prepared a guide to the different kinds of crypto platform UK residents can use to buy cryptocurrencies. Don’t forget to pick one of the best crypto wallets before you visit these sites. 

👀Is there a crypto UK ban?

Like many other countries, the UK was fairly slow to adapt its laws to the rapid growth of cryptocurrencies. As such, there have been many crypto UK users who have feared that some kind of ban might be implemented on the use of Bitcoin and so on. So take a look at our guide to cryptocurrencies to see trading is still permitted in the UK. 

❓What is the crypto UK regulation?

In terms of cryptocurrency regulations UK currently has some fairly specific laws. These govern things like which sites are allowed to let you buy Bitcoin and so on. However, it’s worth noting that these laws are subject to change. But with our guide to the regulations of crypto UK residents will quickly get to see the different ways that they can legally buy and sell cryptocurrencies. 

📱Where can I find a good crypto app review?

It’s fairly unsurprising to find that many of the top kinds of crypto platform UK has at the moment will aim to make their services as mobile-friendly as possible. After all, most crypto fans will probably like to do things like trading from a smartphone or tablet. So read our crypto reviews to see which of these brands have created their own apps for you to make good use of your cryptocurrencies.

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Trading financial products carries a high risk to your capital, especially trading leverage products such as CFDs. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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