Cryptocurrency has been a buzz word for the last couple of years. Trading, owning, and speculating in cryptos has really picked up since the onset of the COVID-19 pandemic. The fact that some are very inexpensive can be very alluring to some. One issue that has come up is that sometimes people find themselves owning a certain cryptocurrency that they want to convert into another one. Here we will detail how to convert cryptocurrency onlin.
Cryptocurrencies – Overview
Any coin created virtually through cryptographic methods is technically a cryptocurrency. In layman’s terms, it is a form of currency existing only digitally and relying exclusively on encryption for the security of transactions. This digital money is submitted as an entry on the blockchain – a global ledger that keeps a record of every crypto-transaction made.
Ever heard of Bitcoin, Ripple, or Ethereum? These are different types of cryptocurrency and are now in use by many organizations. For instance, Big Four accountancy firm E&Y accepts Bitcoin as a form of payment for its consultancy services.
The Australian Securities Exchange is also going to soon implement blockchain technology in the clearing and settlement system of share trading. Since 10% of global GDP will be stored on blockchain-related technology by 2025, it looks like they are moving in the right direction!
Other technologies that make cryptocurrencies possible include blockchain, consensus ledger, and acyclic directional graph.
Blockchain is thought of as a revolutionary technology. In its simplest form, blockchain is a decentralized ledger which is distributed to all network participants. The blockchain contains the entire history of past transactions, and each new block, or transaction, is built upon the previous one. To change a past block all the previous blocks that have been created since that particular block would need to be changed.
How to Buy Cryptocurrencies
If you are interested in investing in cryptocurrencies, you have several places where you can purchase them. Before you do pull the trigger, you must understand cryptocurrencies are very volatile and that you should use extreme caution and perform due diligence.
Some crypto exchanges include Robinhood, Coinbase, and Godex.
How to Exchange Cryptocurrencies
A downside to many exchanges is that if you purchase one type of crypto and want to exchange it for another they will charge high transaction fees. Plus, you will need to keep your coins on their exchange in an account (wallet) in order to exchange.
There are other options if you have a wallet and want to exchange a current holding for another coin. One huge advantage of these is that you can keep your coins where they are. You don’t need to transfer them to a new wallet on another site. An example of this is Godex. Here, you don’t even need to open an account or provide them any data. Just put your wallet details in and within a short amount of time you will have converted your existing holdings into a new coin!
Other advantages of Godex include:
- They support the idea of cryptocurrency as a secure and anonymous way to store wealth.
- More than 200 coins and tokens are available on their online cryptocurrency exchange and they continue to add more.
- There is no limit on the amount you can exchange.
- The exchange rate is fixed at the time of the transaction. This way you will not lose money if the exchange rate changes during the actual execution of the transaction.
Although cryptocurrency investing and the use of them everyday is becoming more mainstream, there are still a lot of questions that need to be addressed. For instance, taxation of cryptos is still unclear in many jurisdictions. Plus there are not a ton of vendors that accept cryptocurrency as payment (for now).
On top of this, there is still the looming risk of a sharp decline in prices. We have seen this in the past with almost every crypto including Bitcoin. However, if you HODL and are in it for the long term, you may see some capital appreciation. That is if cryptocurrencies aren’t banned on a country wide or global scale.