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Blockchain technology opened a lot of opportunities, like digital currencies, to the world. The use of cryptocurrencies has gained traction over the past decade due to the increased number of sites that started accepting them as payments, especially when celebrities began openly talking about them.
Therefore, some people think that cryptocurrency is the future and will eventually replace fiat money or traditional, government-controlled coins. Safety in crypto transaction is perhaps one of the main reasons people believe in the power of cryptocurrency.
Capitalising on the inherent safety of blockchain technology may mean better protection against bank failures, hyperinflation, and disasters.
So, if you're comfortable with adding this type of investment to your portfolio, here's a guide on how to safely send and receive cryptocurrencies.
First things first
Before you buy your first cryptocurrency, you must know these basic things:
Cryptocurrencies have different networks
It's critical to remember that each chain has its own 'language' or cryptography. Hence, you can only transact with cryptocurrencies that have the same blockchain.
Different wallets can have the same format
Some digital currency wallets have the same format and starting code, which can sometimes be confusing. When doing transactions with crypto tokens, you have to be careful of the public address you're using to avoid sending your assets to the wrong wallet.
Lost funds are near impossible to retrieve
Extra precautions are necessary when transacting with digital currencies. Mistakenly sending your funds to the wrong wallet is almost impossible to retrieve.
So, it's always important to double- or triple-check the public address of the receiver's wallet to avoid losing money. If a QR code is available, always use this option to ensure the success of your transactions.
You need two keys to make it work
You'll need two keys when doing crypto transactions: the public key and private key. A public key is like an email address that you can share with others. On the other hand, the private key is like the password you'll need to access your wallet to send funds to another digital wallet.
How to safely send cryptocurrency
Sending cryptocurrency from one address to another varies slightly, depending on the wallet, but follows the basic procedure:
1. Ensure that the wallet you're sending crypto from has funds. A wallet can be a desktop wallet, a mobile wallet, or an exchange wallet.
2. When asked if you want to Receive or Send, choose to Send.
3. For wallets with multiple cryptocurrencies, make sure that you select the correct cryptocurrency you wish to send.
4. Check if you have the correct public address of the receiver's wallet. The public address can be a long series of alphanumeric code or in the form of a QR code. If it's the former, try to copy the address on your clipboard first to triple-check if it's correct. A QR code is more straightforward and eliminates potential human error. Thus, you can just scan the QR code, and you'll be on your way.
5. Ensure you select the correct denomination value you wish to use before typing in the amount you need to send. You have the option to send either in fiat (dollar) amount of cryptocurrency.
Be aware of the difference between the value of USD $3.50 from 3.5 bitcoin. If you have a QR code that comes with the requested amount, use that so you don't have to input the amount you need to send manually. Double-check if the amount designated is correct.
6. Before pressing the send button, double-check everything again. Triple-check the recipient's public address and see to it that you're sending it to the correct wallet. Confirm whether the address is from a reliable source, as these crypto transactions are irreversible.
7. Swipe or click 'send' to send cryptocurrency successfully.
How to safely receive cryptocurrency
Unlike sending cryptocurrencies, receiving is relatively more straightforward. To safely receive cryptocurrency, just follow these steps:
1. Open your wallet and swipe or click Receive.
2. Share your wallet's public address with the sender. If you're physically present with the sender, you can also have them scan your wallet's QR code if you have one.
If you're new to cryptocurrencies, keep in mind that you need to do your due diligence when transacting to avoid losing funds over human error. Remember that different wallets in varying networks can still have the same addresses because of similar protocols, so it's best to stay focused when making transactions.
Much has been said about the safety and security of digital money. However, the success of using these cryptocurrencies will boil down to how you, as the end-user, utilise the technology behind it.