Digital currency, also known as cryptocurrency, is an option for individuals seeking to invest, make purchases, or store value.
For newcomers, it may feel overwhelming, but with the right approach, getting digital currency securely and swiftly can be straightforward. Here are some tips for navigating the process.
Use a trustworthy platform or service
The first important step is choosing a reputable platform or service that provides strong security measures.
Always ensure the platform offers features like encryption and two-factor authentication to safeguard your personal data.
To further protect yourself, use unique, strong passwords for each account.
If you purchase cryptocurrency, you can store it in a digital wallet, which comes in two main types: hot wallets (online) and cold wallets (offline).
There are pros and cons to each, so make sure you do some research on hot vs. cold wallets to find the right options for you.
Explore quick ways to fund and complete a purchase
There are several ways to fund your account, such as using a card or a bank transfer.
Each method comes with its own set of fees and time frames.
For a quick, in-person option, you can consider using a Bitcoin ATM.
These machines allow you to purchase Bitcoin or other cryptocurrencies using cash.
Bitcoin ATMs should only be used to send cryptocurrency to yourself and not others.
Understand legal and tax obligations
It’s important to be aware of the legal and tax obligations related to digital currency.
The Internal Revenue Service (IRS) says that “For U.S. tax purposes, digital assets are considered property, not currency”.
This includes “convertible virtual currencies and cryptocurrencies such as Bitcoin”, “stablecoins” and “non fungible tokens (NFTs)”.
This means that “if you have digital asset transactions, you must report them whether or not they result in a taxable gain or loss”.
Keep an eye on any state-specific regulations and future changes in laws.
Be vigilant against digital scammers
It’s crucial to stay vigilant against digital currency scammers.
Phishing attacks, fake wallets, and fraudulent exchanges are some methods that could be used by scammers.
Always double-check the URLs of the platforms you use and avoid clicking on suspicious links.
Never share your passwords, and be cautious about “too good to be true” investment opportunities.
Digital currency doesn’t have to be complicated, but it’s important to approach it with the right knowledge, tools and care.
Remember, purchasing cryptocurrencies comes with risk and markets can be unpredictable. Always consult with a professional financial advisor before making any purchases or decisions.
This article does not constitute financial advice or recommendations to buy digital assets or cryptocurrency.
