Cryptocurrencies have already changed our perception of money: borderless, banks-free, secure, and gradually developing, this digital capital is more than just money, it is a lifestyle. However, to make the most of it, one should be crypto literate in the times when even simple financial literacy is a rarity.
Reasons To Become Literate
They say that “financial ignorance carries significant costs”. And the saying works: today one of the biggest economic problems is the evident lack of financial literacy, and this point is especially obvious in connection with crypto. Even the curious ones tend to be demotivated from learning the ropes of the matter by the widespread attitude that crypto is too extra, a kind of luxury, so all and everyone must not boast of “bitcoins”. As a result, most people are far from understanding how blockchain technology works and being interested in investing. So, the legitimacy of the market is not in its best form. The good news is that learning crypto literacy means that you will have a clearer understanding of economic theory to realize where it comes from, how it gets its value, and why this value is changeable.
A Few Words On Financial Literacy
Let’s start our education with some point on financial literacy in a broad sense. What is it? Simply the skills that will help you to make wise and advantageous decisions with your finances.
Firstly, stay conscious and take care of your budgeting by spending less than you earn. This will enable you to save your money for further financial operations that will bring you times more money and positive emotions: the best investment is investment in yourself.
Secondly, stay away from debts as long as you can. A cool thing for today can turn into a continuous torture for a few years. Do you really need to buy this house now? Is it legit? Why not just keep on paying rent till you succeed? Ask yourself straightforward and clear questions. And be sure to answer them sincerely.
Last but not least, prepare yourself for an emergency bund to stay safe and sound with no work during 6 months or more. If this seems to be senseless, just look around: COVID-19 has imprisoned us in our houses with little possibilities to work. Not everyone has a chance to go remote or to freelance. But that’s not the worst: though governments are helping citizens in most countries of the world, the pandemy has shaken the markets so much that we can’t predict what can happen with finances later. However, just let’s hope for the best and take care of our future right now.
A Closer Look
Speaking about the major crypto characteristics, we should admit that cryptocurrencies can be exchanged for fiat currencies via special online markets. Their drawback is that they are pretty vulnerable to hacking. As for the pros and cons of crypto, it is secure, prompt, and independent. To get the clearer picture, read more here.
As for the way it operates, crypto works with a ledger, so all operations are public and fair. The ledger is a decentralized (self-run and self-governed) record-keeping system.
Nowadays crypto is legal in most countries. You can buy, sell, send and receive it almost all over the world. However, every government has its own rules to set. The most important thing is that you need to pay taxes for using your coins. Some operations are taxable, others are free. Again, policies vary depending on your country. Here you can get more information.
Though crypto is comparatively safe, the community faces unpleasant cases of theft from time to time. To be on the safe side, you should know how it happens.
Cyber thefts are mostly aimed at huge crypto companies. But ordinary people can also face them via malware, when someone downloads anything from the Internet using some public Wi-Fi network or via emails and irrelevant fake websites.
Crypto literacy can save you from tears of being hacked: though this type of currency is considered to be safe, you should take care of its security, for crypto-theft can happen in different ways. For example, in 2018 $534 million worth of NEM coins were stolen from Japanese Crypto exchange as a result of the so-called “Coincheck Hack”.
So, let’s point out the key aspects of preventing negative situations. To begin with, you need to pay much attention to your digital wallet. Choose only trustworthy sources. Then, do your best not to leave all what you have in the same place. Use a reliable API. Create strong passwords that can be invented and remembered by you only. Always set on 2-factor authentication. Use secure payment processing, such as NOWPayments.
Apart from dealing with currency, you should also check market changes and keep on educating yourself. Again, NOWPayments is here to save your back: read our blog to learn more about DeFi, crypto taxation system, and other intriguing topics.
So, what is our crypto literacy strategy for you?
- Keep on gaining financial knowledge with our blog and other relevant sources.
- Form financial habits.
- Achieve financial success.
- Analyze your personal strategies.
- Tell others about your positive experience.
- Make crypto your lifestyle with NOWPayments.
Cryptocurrency gives a lot of opportunities. To make the most of them, follow the rules to stay literate and use the trustworthy services only — such as NOWPayments.
Disclaimer: This article reflects its author’s opinion only and is not financial advice. We take no responsibility for the results of any trader’s decision or action.