ℹ️ Skipped - page is already crawled
| Filter | Status | Condition | Details |
|---|---|---|---|
| HTTP status | PASS | download_http_code = 200 | HTTP 200 |
| Age cutoff | PASS | download_stamp > now() - 6 MONTH | 0.2 months ago |
| History drop | PASS | isNull(history_drop_reason) | No drop reason |
| Spam/ban | PASS | fh_dont_index != 1 AND ml_spam_score = 0 | ml_spam_score=0 |
| Canonical | PASS | meta_canonical IS NULL OR = '' OR = src_unparsed | Not set |
| Property | Value |
|---|---|
| URL | https://www.kaspersky.com/resource-center/definitions/what-is-cryptocurrency |
| Last Crawled | 2026-03-31 01:21:57 (7 days ago) |
| First Indexed | 2019-06-19 14:02:21 (6 years ago) |
| HTTP Status Code | 200 |
| Meta Title | What is Cryptocurrency and How Does it Work? |
| Meta Description | Cryptocurrency is a digital currency using cryptography to secure transactions. Learn about buying cryptocurrency and cryptocurrency scams to look out for. |
| Meta Canonical | null |
| Boilerpipe Text | Cryptocurrency – meaning and definition
Cryptocurrency, sometimes called crypto-currency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. Cryptocurrencies don't have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.
What is cryptocurrency?
Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.
Cryptocurrency received its name because it uses
encryption
to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety.
The first cryptocurrency was
Bitcoin
, which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.
How does cryptocurrency work?
Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders.
Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets.
If you own cryptocurrency, you don’t own anything tangible. What you own is a key that allows you to move a record or a unit of measure from one person to another without a trusted third party.
Although Bitcoin has been around since 2009, cryptocurrencies and applications of blockchain technology are still emerging in financial terms, and more uses are expected in the future. Transactions including bonds, stocks, and other financial assets could eventually be traded using the technology.
Cryptocurrency examples
There are thousands of cryptocurrencies. Some of the best known include:
Bitcoin:
Founded in 2009, Bitcoin was the first cryptocurrency and is still the most commonly traded. The currency was developed by Satoshi Nakamoto – widely believed to be a pseudonym for an individual or group of people whose precise identity remains unknown.
Ethereum:
Developed in 2015, Ethereum is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum. It is the most popular cryptocurrency after Bitcoin.
Litecoin:
This currency is most similar to bitcoin but has moved more quickly to develop new innovations, including faster payments and processes to allow more transactions.
Ripple:
Ripple is a distributed ledger system that was founded in 2012. Ripple can be used to track different kinds of transactions, not just cryptocurrency. The company behind it has worked with various banks and financial institutions.
Non-Bitcoin cryptocurrencies are collectively known as “altcoins” to distinguish them from the original.
How to buy cryptocurrency
You may be wondering how to buy cryptocurrency safely. There are typically three steps involved. These are:
Step 1: Choosing a platform
The first step is deciding which platform to use. Generally, you can choose between a traditional broker or dedicated cryptocurrency exchange:
Traditional brokers.
These are online brokers who offer ways to buy and sell cryptocurrency, as well as other financial assets like stocks, bonds, and ETFs. These platforms tend to offer lower trading costs but fewer crypto features.
Cryptocurrency exchanges.
There are many cryptocurrency exchanges to choose from, each offering different cryptocurrencies, wallet storage, interest-bearing account options, and more. Many exchanges charge asset-based fees.
When comparing different platforms, consider which cryptocurrencies are on offer, what fees they charge, their security features, storage and withdrawal options, and any educational resources.
Step 2: Funding your account
Once you have chosen your platform, the next step is to fund your account so you can begin trading. Most crypto exchanges allow users to purchase crypto using fiat (i.e., government-issued) currencies such as the US Dollar, the British Pound, or the Euro using their debit or credit cards – although this varies by platform.
Crypto purchases with credit cards are considered risky, and some exchanges don't support them. Some credit card companies don't allow crypto transactions either. This is because cryptocurrencies are highly volatile, and it is not advisable to risk going into debt — or potentially paying high credit card transaction fees — for certain assets.
Some platforms will also accept ACH transfers and wire transfers. The accepted payment methods and time taken for deposits or withdrawals differ per platform. Equally, the time taken for deposits to clear varies by payment method.
An important factor to consider is fees. These include potential deposit and withdrawal transaction fees plus trading fees. Fees will vary by payment method and platform, which is something to research at the outset.
Step 3: Placing an order
You can place an order via your broker's or exchange's web or mobile platform. If you are planning to buy cryptocurrencies, you can do so by selecting "buy," choosing the order type, entering the amount of cryptocurrencies you want to purchase, and confirming the order. The same process applies to "sell" orders.
There are also other ways to invest in crypto.
These include payment services like PayPal, Cash App, and Venmo, which allow users to buy, sell, or hold cryptocurrencies. In addition, there are the following investment vehicles:
Bitcoin trusts:
You can buy shares of Bitcoin trusts with a regular brokerage account. These vehicles give retail investors exposure to crypto through the stock market.
Bitcoin mutual funds:
There are Bitcoin ETFs and Bitcoin mutual funds to choose from.
Blockchain stocks or ETFs:
You can also indirectly invest in crypto through blockchain companies that specialize in the technology behind crypto and crypto transactions. Alternatively, you can buy stocks or ETFs of companies that use blockchain technology.
The best option for you will depend on your investment goals and risk appetite.
How to store cryptocurrency
Once you have purchased cryptocurrency, you need to store it safely to protect it from hacks or theft. Usually, cryptocurrency is stored in crypto wallets, which are physical devices or online software used to store the private keys to your cryptocurrencies securely. Some exchanges provide wallet services, making it easy for you to store directly through the platform. However, not all exchanges or brokers automatically provide wallet services for you.
There are different wallet providers to choose from. The terms “hot wallet” and “cold wallet” are used:
Hot wallet storage:
"hot wallets" refer to crypto storage that uses online software to protect the private keys to your assets.
Cold wallet storage:
Unlike hot wallets, cold wallets (also known as hardware wallets) rely on offline electronic devices to securely store your private keys.
Typically, cold wallets tend to charge fees, while hot wallets don't.
What can you buy with cryptocurrency?
When it was first launched, Bitcoin was intended to be a medium for daily transactions, making it possible to buy everything from a cup of coffee to a computer or even big-ticket items like real estate. That hasn’t quite materialized and, while the number of institutions accepting cryptocurrencies is growing, large transactions involving it are rare. Even so, it is possible to buy a wide variety of products from e-commerce websites using crypto. Here are some examples:
Technology and e-commerce sites:
Several companies that sell tech products accept crypto on their websites, such as newegg.com, AT&T, and Microsoft. Overstock, an e-commerce platform, was among the first sites to accept Bitcoin. Shopify, Rakuten, and Home Depot also accept it.
Luxury goods:
Some luxury retailers accept crypto as a form of payment. For example, online luxury retailer Bitdials offers Rolex, Patek Philippe, and other high-end watches in return for Bitcoin.
Cars:
Some car dealers – from mass-market brands to high-end luxury dealers – already accept cryptocurrency as payment.
Insurance:
In April 2021, Swiss insurer
AXA announced that it had begun accepting Bitcoin as a mode of payment
for all its lines of insurance except life insurance (due to regulatory issues). Premier Shield Insurance, which sells home and auto insurance policies in the US, also accepts Bitcoin for premium payments.
If you want to spend cryptocurrency at a retailer that doesn’t accept it directly, you can use a cryptocurrency debit card, such as BitPay in the US.
Stay Safe While Exploring Cryptocurrency
Kaspersky Premium protects you from phishing sites and crypto scams. Secure your investments with real-time threat detection.
Try Premium for Free
Cryptocurrency fraud and cryptocurrency scams
Unfortunately, cryptocurrency crime is on the rise. Cryptocurrency scams include:
Fake websites:
Bogus sites which feature fake testimonials and crypto jargon promising massive, guaranteed returns, provided you keep investing.
Virtual Ponzi schemes:
Cryptocurrency criminals promote non-existent opportunities to invest in digital currencies and create the illusion of huge returns by paying off old investors with new investors’ money. One scam operation, BitClub Network, raised more than $700 million before its perpetrators
were indicted in December 2019
.
"Celebrity" endorsements:
Scammers pose online as billionaires or well-known names who promise to multiply your investment in a virtual currency but instead steal what you send. They may also use messaging apps or chat rooms to start rumours that a famous businessperson is backing a specific cryptocurrency. Once they have encouraged investors to buy and driven up the price, the scammers sell their stake, and the currency reduces in value.
Romance scams:
The FBI warns of a trend in
online dating scams
, where tricksters persuade people they meet on dating apps or social media to invest or trade in virtual currencies. The FBI’s Internet Crime Complaint Centre fielded more than 1,800 reports of crypto-focused romance scams in the first seven months of 2021, with losses reaching $133 million.
Otherwise, fraudsters may pose as legitimate virtual currency traders or set up bogus exchanges to trick people into giving them money. Another crypto scam involves fraudulent sales pitches for individual retirement accounts in cryptocurrencies. Then there is straightforward cryptocurrency hacking, where criminals break into the digital wallets where people store their virtual currency to steal it.
Is cryptocurrency safe?
Cryptocurrencies are usually built using blockchain technology. Blockchain describes the way transactions are recorded into "blocks" and time stamped. It's a fairly complex, technical process, but the result is a digital ledger of cryptocurrency transactions that's hard for hackers to tamper with.
In addition, transactions require a two-factor authentication process. For instance, you might be asked to enter a username and password to start a transaction. Then, you might have to enter an authentication code sent via text to your personal cell phone.
While securities are in place, that does not mean cryptocurrencies are un-hackable. Several high-dollar hacks have cost cryptocurrency start-ups heavily. Hackers hit Coincheck to the tune of $534 million and BitGrail for $195 million, making them
two of the biggest cryptocurrency hacks of 2018
.
Unlike government-backed money, the value of virtual currencies is driven entirely by supply and demand. This can create wild swings that produce significant gains for investors or big losses. And cryptocurrency investments are subject to far less regulatory protection than traditional financial products like stocks, bonds, and mutual funds.
Four tips to invest in cryptocurrency safely
According to Consumer Reports, all investments carry risk, but some experts consider cryptocurrency to be one of the riskier investment choices out there. If you are planning to invest in cryptocurrencies, these tips can help you make educated choices.
Research exchanges:
Before you invest, learn about cryptocurrency exchanges. It’s estimated that there are over 500 exchanges to choose from. Do your research, read reviews, and talk with more experienced investors before moving forward.
Know how to store your digital currency:
If you buy cryptocurrency, you have to store it. You can keep it on an exchange or in a digital wallet. While there are different kinds of wallets, each has its benefits, technical requirements, and security. As with exchanges, you should investigate your storage choices before investing.
Diversify your investments:
Diversification is key to any good investment strategy, and this holds true when you are investing in cryptocurrency. Don't put all your money in Bitcoin, for example, just because that's the name you know. There are thousands of options, and it's better to spread your investment across several currencies.
Prepare for volatility:
The cryptocurrency market is highly volatile, so be prepared for ups and downs. You will see dramatic swings in prices. If your investment portfolio or mental wellbeing can't handle that, cryptocurrency might not be a wise choice for you.
Cryptocurrency is all the rage right now, but remember, it is still in its relative infancy and is considered highly speculative. Investing in something new comes with challenges, so be prepared. If you plan to participate, do your research, and invest conservatively to start.
One of the best ways you can stay safe online is by using a comprehensive antivirus.
Kaspersky Internet Security
defends you from malware infections, spyware, data theft and protects your online payments using bank-grade encryption.
Related articles:
What is cryptojacking and how does it work?
What is Bitcoin?
Four common cryptocurrency scams
Scam websites and how to avoid them
How safe are money e-transfers? |
| Markdown | [Skip to main content](https://www.kaspersky.com/resource-center/definitions/what-is-cryptocurrency#main)
Home
Business
Partners
About us
Security Solutions
[PREMIUM PROTECTIONKaspersky PremiumBEST SELLERComplete protection for your devices, online privacy & identity](https://www.kaspersky.com/premium)[ADVANCED PROTECTIONKaspersky PlusCombines security, performance & privacy features in one app](https://www.kaspersky.com/plus)[STANDARD PROTECTIONKaspersky StandardEnhanced protection with device performance booster](https://www.kaspersky.com/standard)
[View All Solutions](https://www.kaspersky.com/home-security)
Privacy & Kids
[PARENTAL CONTROLSKaspersky Safe KidsFlexible parental controls & GPS tracker for your kids.](https://www.kaspersky.com/safe-kids)[VPNKaspersky VPN Secure Connection The private and secure VPN to enjoy the Internet without compromising on speed.](https://www.kaspersky.com/vpn-secure-connection)[PASSWORD PROTECTIONKaspersky Password ManagerBank-grade security vault for your passwords & documents.](https://www.kaspersky.com/password-manager)
[Renew Licence](https://www.kaspersky.com/renewal-center/home)
[Support](https://support.kaspersky.com/)
[Product updates](https://www.kaspersky.com/downloads#update-product)
[Trials](https://www.kaspersky.com/downloads#compare-table)
[go to homepage](https://www.kaspersky.com/)
- [Home](https://www.kaspersky.com/home-security)
- [Kaspersky Premium](https://www.kaspersky.com/premium)
- [Kaspersky Plus](https://www.kaspersky.com/plus)
- [Kaspersky Standard](https://www.kaspersky.com/standard)
- [Kaspersky Safe Kids](https://www.kaspersky.com/safe-kids)
- [Kaspersky VPN Secure Connection](https://www.kaspersky.com/vpn-secure-connection)
- [Kaspersky Password Manager](https://www.kaspersky.com/password-manager)
- [Renew Licence](https://www.kaspersky.com/renewal-center/home)
- [Support](https://support.kaspersky.com/)
- [Product updates](https://www.kaspersky.com/downloads#update-product)
- [Trials](https://www.kaspersky.com/downloads#compare-table)
- Business
- [KSOS Portal](https://ksos.kaspersky.com/#/auth/layout/ksos)
- [Trials & Downloads](https://www.kaspersky.com/small-to-medium-business-security/downloads)
- [Renew SMB licence](https://www.kaspersky.com/renewal-center/business)
- [Find a partner](https://locator.kaspersky.com/b2b/)
- [Company Account](https://companyaccount.kaspersky.com/account/login)
- [Kaspersky TIP](https://tip.kaspersky.com/home)
- [Support](https://support.kaspersky.com/us/business)
- [Cloud Console](https://ksc.kaspersky.com/)
- [Product Training & Certification](https://support.kaspersky.com/learning)
- Partners
- [Providers for business](https://locator.kaspersky.com/b2b/)
- [Consumer solutions providers](https://locator.kaspersky.com/b2c/)
- [Partnership with distributors](https://locator.kaspersky.com/distributors/%20)
- [Find a learning center](https://locator.kaspersky.com/learning/?locale=en)
- [Kaspersky United Partner Portal](https://partners.kaspersky.com/)
- [Become a B2B partner](https://partners.kaspersky.com/login/)
- [Become a Build partner](https://www.kaspersky.com/partners/technology/benefits)
- [Become a B2C partner](https://www.kaspersky.com/partners/b2c/contact)
- [Become a CBA partner](https://www.kaspersky.com/partners/cba)
- [Allowlist Program](https://www.kaspersky.com/partners/allowlist-program)
- About us
- [Get to know us](https://www.kaspersky.com/about)
- [Transparency](https://www.kaspersky.com/about/transparency)
- [Corporate News](https://www.kaspersky.com/about/press-releases)
- [Press center](https://www.kaspersky.com/about/press-center)
- [Kaspersky Academy](https://academy.kaspersky.com/)
- [Expertise Centers](https://www.kaspersky.com/about/expertise-centers)
- [Awards & Recognitions](https://www.kaspersky.com/about/awards)
- [Top 3 Rankings](https://www.kaspersky.com/top3)
- [Sponsorships](https://www.kaspersky.com/about/sponsorships/)
- [Security Bulletin](https://lp.kaspersky.com/global/ksb2025/)
- [Case Studies](https://www.kaspersky.com/enterprise-security/resources/case-studies)
- [Policy blog](https://www.kaspersky.com/about/policy-blog)
- [Careers](https://careers.kaspersky.com/)
- [Contact us](https://www.kaspersky.com/about/contact)
My Account
Personal
[Sign in to My Kaspersky](https://my.kaspersky.com/)
[Renew your license](https://www.kaspersky.com/renewal-center/home)
[Downloads](https://www.kaspersky.com/downloads)
[Support for Home](https://support.kaspersky.com/b2c/global)
Business
[Sign in to KSOS portal](https://ksos.kaspersky.com/)
[Kaspersky Business Hub](https://cloud.kaspersky.com/)
[Renew License](https://www.kaspersky.com/renewal-center/vsb)
[Support for Business](https://support.kaspersky.com/business)
Americas
[América Latina](https://latam.kaspersky.com/?ignoreredirects=true)[Brasil](https://www.kaspersky.com.br/?ignoreredirects=true)[United States](https://usa.kaspersky.com/?ignoreredirects=true)[Canada - English](https://www.kaspersky.ca/?ignoreredirects=true)[Canada - Français](https://www.kaspersky.ca/fr?ignoreredirects=true)
Africa
[Afrique Francophone](https://afrique.kaspersky.com/)[Maroc](https://www.kaspersky.ma/)[South Africa](https://www.kaspersky.co.za/?ignoreredirects=true)[Tunisie](https://afrique.kaspersky.com/)
Middle East
[Middle East (English)](https://me-en.kaspersky.com/?ignoreredirects=true)[الشرق الأوسط (Arabic)](https://me.kaspersky.com/?ignoreredirects=true)
Western Europe
[Belgique & Luxembourg](https://www.kaspersky.be/?ignoreredirects=true)[Danmark](https://www.kaspersky.dk/?ignoreredirects=true)[Deutschland & Schweiz](https://www.kaspersky.de/?ignoreredirects=true)[España](https://www.kaspersky.es/?ignoreredirects=true)[France](https://www.kaspersky.fr/?ignoreredirects=true)[Italia & Svizzera](https://www.kaspersky.it/?ignoreredirects=true)[Nederland](https://www.kaspersky.nl/?ignoreredirects=true)[Norge](https://no.kaspersky.com/?ignoreredirects=true)[Österreich](https://www.kaspersky.de/?ignoreredirects=true)[Portugal](https://www.kaspersky.pt/?ignoreredirects=true)[Sverige](https://www.kaspersky.se/?ignoreredirects=true)[Suomi](https://www.kaspersky.fi/?ignoreredirects=true)[United Kingdom](https://www.kaspersky.co.uk/?ignoreredirects=true)
Eastern Europe
[Česká republika](https://www.kaspersky.cz/)[Magyarország](https://hu.kaspersky.com/)[Polska](https://www.kaspersky.com.pl/)[România](https://www.kaspersky.ro/)[Srbija](https://www.kaspersky.rs/)[Türkiye](https://www.kaspersky.com.tr/?ignoreredirects=true)[Ελλάδα (Greece)](https://www.kaspersky.gr/)[България (Bulgaria)](https://bg.kaspersky.com/)[Қазақстан - Русский (Kazakhstan - Russian)](https://www.kaspersky.kz/)[Қазақстан - Қазақша (Kazakhstan - Kazakh)](https://www.kaspersky.kz/kk)[Россия и Белару́сь (Russia & Belarus)](https://www.kaspersky.ru/?ignoreredirects=true)[Україна (Ukraine)](https://ukraine.kaspersky.com/)
Asia & Pacific
[Australia](https://www.kaspersky.com.au/?ignoreredirects=true)[India](https://www.kaspersky.co.in/?ignoreredirects=true)[Indonesia (Bahasa)](https://id.kaspersky.com/?ignoreredirects=true)[Malaysia - English](https://www.kaspersky.my/?ignoreredirects=true)[Malaysia - Bahasa Melayu](https://www.kaspersky.my/ms/?ignoreredirects=true)[New Zealand](https://www.kaspersky.com.au/?ignoreredirects=true)[Việt Nam](https://www.kaspersky.com.vn/)[ไทย (Thailand)](https://www.kaspersky.co.th/)[한국 (Korea)](https://www.kaspersky.co.kr/)[中国 (China)](https://www.kaspersky.com.cn/?ignoreredirects=true)[香港特別行政區 (Hong Kong SAR)](https://www.kaspersky.com.hk/)[台灣 (Taiwan)](https://www.kaspersky.com.tw/)[日本語 (Japan)](https://www.kaspersky.co.jp/)
For all other countries
[Global Website](https://www.kaspersky.com/?ignoreredirects=true)
[Home](https://www.kaspersky.com/)
[Home Products](https://www.kaspersky.com/home-security)
[Resource Center](https://www.kaspersky.com/resource-center)
[Definitions](https://www.kaspersky.com/resource-center/definitions)
What is Cryptocurrency and how does it work?
# What is Cryptocurrency and how does it work?
## Cryptocurrency – meaning and definition
Cryptocurrency, sometimes called crypto-currency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. Cryptocurrencies don't have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.
## What is cryptocurrency?
Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.
Cryptocurrency received its name because it uses [encryption](https://www.kaspersky.com/resource-center/definitions/encryption) to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety.
The first cryptocurrency was [Bitcoin](https://www.kaspersky.com/resource-center/definitions/what-is-bitcoin), which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.
## How does cryptocurrency work?
Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders.
Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets.
If you own cryptocurrency, you don’t own anything tangible. What you own is a key that allows you to move a record or a unit of measure from one person to another without a trusted third party.
Although Bitcoin has been around since 2009, cryptocurrencies and applications of blockchain technology are still emerging in financial terms, and more uses are expected in the future. Transactions including bonds, stocks, and other financial assets could eventually be traded using the technology.
## Cryptocurrency examples
There are thousands of cryptocurrencies. Some of the best known include:
**Bitcoin:**
Founded in 2009, Bitcoin was the first cryptocurrency and is still the most commonly traded. The currency was developed by Satoshi Nakamoto – widely believed to be a pseudonym for an individual or group of people whose precise identity remains unknown.
**Ethereum:**
Developed in 2015, Ethereum is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum. It is the most popular cryptocurrency after Bitcoin.
**Litecoin:**
This currency is most similar to bitcoin but has moved more quickly to develop new innovations, including faster payments and processes to allow more transactions.
**Ripple:**
Ripple is a distributed ledger system that was founded in 2012. Ripple can be used to track different kinds of transactions, not just cryptocurrency. The company behind it has worked with various banks and financial institutions.
Non-Bitcoin cryptocurrencies are collectively known as “altcoins” to distinguish them from the original.
## How to buy cryptocurrency
You may be wondering how to buy cryptocurrency safely. There are typically three steps involved. These are:
**Step 1: Choosing a platform**
The first step is deciding which platform to use. Generally, you can choose between a traditional broker or dedicated cryptocurrency exchange:
- **Traditional brokers.** These are online brokers who offer ways to buy and sell cryptocurrency, as well as other financial assets like stocks, bonds, and ETFs. These platforms tend to offer lower trading costs but fewer crypto features.
- **Cryptocurrency exchanges.** There are many cryptocurrency exchanges to choose from, each offering different cryptocurrencies, wallet storage, interest-bearing account options, and more. Many exchanges charge asset-based fees.
When comparing different platforms, consider which cryptocurrencies are on offer, what fees they charge, their security features, storage and withdrawal options, and any educational resources.
**Step 2: Funding your account**
Once you have chosen your platform, the next step is to fund your account so you can begin trading. Most crypto exchanges allow users to purchase crypto using fiat (i.e., government-issued) currencies such as the US Dollar, the British Pound, or the Euro using their debit or credit cards – although this varies by platform.
Crypto purchases with credit cards are considered risky, and some exchanges don't support them. Some credit card companies don't allow crypto transactions either. This is because cryptocurrencies are highly volatile, and it is not advisable to risk going into debt — or potentially paying high credit card transaction fees — for certain assets.
Some platforms will also accept ACH transfers and wire transfers. The accepted payment methods and time taken for deposits or withdrawals differ per platform. Equally, the time taken for deposits to clear varies by payment method.
An important factor to consider is fees. These include potential deposit and withdrawal transaction fees plus trading fees. Fees will vary by payment method and platform, which is something to research at the outset.
**Step 3: Placing an order**
You can place an order via your broker's or exchange's web or mobile platform. If you are planning to buy cryptocurrencies, you can do so by selecting "buy," choosing the order type, entering the amount of cryptocurrencies you want to purchase, and confirming the order. The same process applies to "sell" orders.
**There are also other ways to invest in crypto.** These include payment services like PayPal, Cash App, and Venmo, which allow users to buy, sell, or hold cryptocurrencies. In addition, there are the following investment vehicles:
- **Bitcoin trusts:** You can buy shares of Bitcoin trusts with a regular brokerage account. These vehicles give retail investors exposure to crypto through the stock market.
- **Bitcoin mutual funds:** There are Bitcoin ETFs and Bitcoin mutual funds to choose from.
- **Blockchain stocks or ETFs:** You can also indirectly invest in crypto through blockchain companies that specialize in the technology behind crypto and crypto transactions. Alternatively, you can buy stocks or ETFs of companies that use blockchain technology.
The best option for you will depend on your investment goals and risk appetite.
## How to store cryptocurrency
Once you have purchased cryptocurrency, you need to store it safely to protect it from hacks or theft. Usually, cryptocurrency is stored in crypto wallets, which are physical devices or online software used to store the private keys to your cryptocurrencies securely. Some exchanges provide wallet services, making it easy for you to store directly through the platform. However, not all exchanges or brokers automatically provide wallet services for you.
There are different wallet providers to choose from. The terms “hot wallet” and “cold wallet” are used:
- **Hot wallet storage:** "hot wallets" refer to crypto storage that uses online software to protect the private keys to your assets.
- **Cold wallet storage:** Unlike hot wallets, cold wallets (also known as hardware wallets) rely on offline electronic devices to securely store your private keys.
Typically, cold wallets tend to charge fees, while hot wallets don't.
## What can you buy with cryptocurrency?
When it was first launched, Bitcoin was intended to be a medium for daily transactions, making it possible to buy everything from a cup of coffee to a computer or even big-ticket items like real estate. That hasn’t quite materialized and, while the number of institutions accepting cryptocurrencies is growing, large transactions involving it are rare. Even so, it is possible to buy a wide variety of products from e-commerce websites using crypto. Here are some examples:
**Technology and e-commerce sites:**
Several companies that sell tech products accept crypto on their websites, such as newegg.com, AT\&T, and Microsoft. Overstock, an e-commerce platform, was among the first sites to accept Bitcoin. Shopify, Rakuten, and Home Depot also accept it.
**Luxury goods:**
Some luxury retailers accept crypto as a form of payment. For example, online luxury retailer Bitdials offers Rolex, Patek Philippe, and other high-end watches in return for Bitcoin.
**Cars:**
Some car dealers – from mass-market brands to high-end luxury dealers – already accept cryptocurrency as payment.
**Insurance:**
In April 2021, Swiss insurer [AXA announced that it had begun accepting Bitcoin as a mode of payment](https://www.axa.ch/en/ueber-axa/blog/trend/bitcoin-cryptocurrency%20.html) for all its lines of insurance except life insurance (due to regulatory issues). Premier Shield Insurance, which sells home and auto insurance policies in the US, also accepts Bitcoin for premium payments.
If you want to spend cryptocurrency at a retailer that doesn’t accept it directly, you can use a cryptocurrency debit card, such as BitPay in the US.
### Stay Safe While Exploring Cryptocurrency
Kaspersky Premium protects you from phishing sites and crypto scams. Secure your investments with real-time threat detection.
[Try Premium for Free](https://www.kaspersky.com/downloads/premium-free-trial?icid=rc-text-banner-premium-free&utm_source=rc&utm_medium=seo&utm_campaign=text-banner&utm_term=premium)
## Cryptocurrency fraud and cryptocurrency scams
Unfortunately, cryptocurrency crime is on the rise. Cryptocurrency scams include:
**Fake websites:** Bogus sites which feature fake testimonials and crypto jargon promising massive, guaranteed returns, provided you keep investing.
**Virtual Ponzi schemes:** Cryptocurrency criminals promote non-existent opportunities to invest in digital currencies and create the illusion of huge returns by paying off old investors with new investors’ money. One scam operation, BitClub Network, raised more than \$700 million before its perpetrators [were indicted in December 2019](https://www.justice.gov/usao-nj/page/file/1224881/download).
**"Celebrity" endorsements:** Scammers pose online as billionaires or well-known names who promise to multiply your investment in a virtual currency but instead steal what you send. They may also use messaging apps or chat rooms to start rumours that a famous businessperson is backing a specific cryptocurrency. Once they have encouraged investors to buy and driven up the price, the scammers sell their stake, and the currency reduces in value.
**Romance scams:** The FBI warns of a trend in [online dating scams](https://www.kaspersky.com/resource-center/threats/beware-online-dating-scams), where tricksters persuade people they meet on dating apps or social media to invest or trade in virtual currencies. The FBI’s Internet Crime Complaint Centre fielded more than 1,800 reports of crypto-focused romance scams in the first seven months of 2021, with losses reaching \$133 million.
Otherwise, fraudsters may pose as legitimate virtual currency traders or set up bogus exchanges to trick people into giving them money. Another crypto scam involves fraudulent sales pitches for individual retirement accounts in cryptocurrencies. Then there is straightforward cryptocurrency hacking, where criminals break into the digital wallets where people store their virtual currency to steal it.
[](https://www.kaspersky.com/premium)
## Is cryptocurrency safe?
Cryptocurrencies are usually built using blockchain technology. Blockchain describes the way transactions are recorded into "blocks" and time stamped. It's a fairly complex, technical process, but the result is a digital ledger of cryptocurrency transactions that's hard for hackers to tamper with.
In addition, transactions require a two-factor authentication process. For instance, you might be asked to enter a username and password to start a transaction. Then, you might have to enter an authentication code sent via text to your personal cell phone.
While securities are in place, that does not mean cryptocurrencies are un-hackable. Several high-dollar hacks have cost cryptocurrency start-ups heavily. Hackers hit Coincheck to the tune of \$534 million and BitGrail for \$195 million, making them [two of the biggest cryptocurrency hacks of 2018](https://www.investopedia.com/news/largest-cryptocurrency-hacks-so-far-year/).
Unlike government-backed money, the value of virtual currencies is driven entirely by supply and demand. This can create wild swings that produce significant gains for investors or big losses. And cryptocurrency investments are subject to far less regulatory protection than traditional financial products like stocks, bonds, and mutual funds.
## Four tips to invest in cryptocurrency safely
According to Consumer Reports, all investments carry risk, but some experts consider cryptocurrency to be one of the riskier investment choices out there. If you are planning to invest in cryptocurrencies, these tips can help you make educated choices.
**Research exchanges:**
Before you invest, learn about cryptocurrency exchanges. It’s estimated that there are over 500 exchanges to choose from. Do your research, read reviews, and talk with more experienced investors before moving forward.
**Know how to store your digital currency:**
If you buy cryptocurrency, you have to store it. You can keep it on an exchange or in a digital wallet. While there are different kinds of wallets, each has its benefits, technical requirements, and security. As with exchanges, you should investigate your storage choices before investing.
**Diversify your investments:**
Diversification is key to any good investment strategy, and this holds true when you are investing in cryptocurrency. Don't put all your money in Bitcoin, for example, just because that's the name you know. There are thousands of options, and it's better to spread your investment across several currencies.
**Prepare for volatility:**
The cryptocurrency market is highly volatile, so be prepared for ups and downs. You will see dramatic swings in prices. If your investment portfolio or mental wellbeing can't handle that, cryptocurrency might not be a wise choice for you.
Cryptocurrency is all the rage right now, but remember, it is still in its relative infancy and is considered highly speculative. Investing in something new comes with challenges, so be prepared. If you plan to participate, do your research, and invest conservatively to start.
One of the best ways you can stay safe online is by using a comprehensive antivirus. [Kaspersky Internet Security](https://www.kaspersky.com/internet-security/) defends you from malware infections, spyware, data theft and protects your online payments using bank-grade encryption.
**Related articles:**
- [What is cryptojacking and how does it work?](https://www.kaspersky.com/resource-center/definitions/what-is-cryptojacking)
- [What is Bitcoin?](https://www.kaspersky.com/resource-center/definitions/what-is-bitcoin)
- [Four common cryptocurrency scams](https://www.kaspersky.com/resource-center/definitions/cryptocurrency-scams)
- [Scam websites and how to avoid them](https://www.kaspersky.com/resource-center/preemptive-safety/scam-websites)
- [How safe are money e-transfers?](https://www.kaspersky.com/resource-center/threats/how-safe-are-money-etransfers)
[](https://www.kaspersky.com/downloads/premium-free-trial?icid=rc-premium-free-trial-skyscrapper-300x600&utm_source=rc&utm_medium=seo&utm_campaign=seo-new-300x600&utm_term=premium)
## What is Cryptocurrency and how does it work?
Kaspersky
Cryptocurrency is a digital currency using cryptography to secure transactions. Learn about buying cryptocurrency and cryptocurrency scams to look out for.
Share with your friends
- [](https://www.facebook.com/sharer/sharer.php?u=https://www.kaspersky.com/resource-center/definitions/what-is-cryptocurrency)
- [](http://twitter.com/share?url=https://www.kaspersky.com/resource-center/definitions/what-is-cryptocurrency)
- [](https://www.linkedin.com/sharing/share-offsite/?url=https://www.kaspersky.com/resource-center/definitions/what-is-cryptocurrency)
- [](https://wa.me/?text=https://www.kaspersky.com/resource-center/definitions/what-is-cryptocurrency)
## Related articles
### [AI Agents: What Is the Hype About Openclaw and the Threat to Personal Data?](https://www.kaspersky.com/resource-center/definitions/ai-agents)
OpenClaw shows how powerful AI agents have...
[Read More](https://www.kaspersky.com/resource-center/definitions/ai-agents)
### [What is Digital Forensics?](https://www.kaspersky.com/resource-center/definitions/digital-forensics)
Who is responsible for cybercrime, and how can...
[Read More](https://www.kaspersky.com/resource-center/definitions/digital-forensics)
### [What is a Remote Access Trojan (RAT)? A cybersecurity guide](https://www.kaspersky.com/resource-center/definitions/what-is-a-rat-remote-access-trojan)
Discover the risks of RAT malware and how to...
[Read More](https://www.kaspersky.com/resource-center/definitions/what-is-a-rat-remote-access-trojan)
### [What is authorization vs authentication?](https://www.kaspersky.com/resource-center/definitions/authentication-vs-authorization)
Discover the key differences between...
[Read More](https://www.kaspersky.com/resource-center/definitions/authentication-vs-authorization)
### [What is Two Factor Authentication (2FA) and Why is it Essential for Online Security](https://www.kaspersky.com/resource-center/definitions/what-is-2fa)
Learn how Two-factor authentication (2FA) adds an...
[Read More](https://www.kaspersky.com/resource-center/definitions/what-is-2fa)
### [What is WPA2 (Wireless Protected Access 2)?](https://www.kaspersky.com/resource-center/definitions/wireless-protected-access-2)
WPA2 security is essential for keeping your...
[Read More](https://www.kaspersky.com/resource-center/definitions/wireless-protected-access-2)
### [What is passwordless authentication and how does it work](https://www.kaspersky.com/resource-center/definitions/what-is-passwordless-authentication)
Discover how passwordless authentication works,...
[Read More](https://www.kaspersky.com/resource-center/definitions/what-is-passwordless-authentication)
### [What is identity theft and how to prevent it](https://www.kaspersky.com/resource-center/definitions/what-is-identity-theft)
Identity theft can lead to serious consequences....
[Read More](https://www.kaspersky.com/resource-center/definitions/what-is-identity-theft)
### [Preparing for Quantum Computing in Cybersecurity](https://www.kaspersky.com/resource-center/definitions/what-is-quantum-computing)
Is quantum computing the greatest cybersecurity...
[Read More](https://www.kaspersky.com/resource-center/definitions/what-is-quantum-computing)
### [What is Data Integrity and Why is it Important?](https://www.kaspersky.com/resource-center/definitions/what-is-data-integrity)
Maintaining data integrity is crucial for...
[Read More](https://www.kaspersky.com/resource-center/definitions/what-is-data-integrity)
[Home Solutions](https://www.kaspersky.com/home-security)
- [Kaspersky Standard](https://www.kaspersky.com/standard)
- [Kaspersky Plus](https://www.kaspersky.com/plus)
- [Kaspersky Premium](https://www.kaspersky.com/premium)
- [Kaspersky Safe Kids](https://www.kaspersky.com/safe-kids)
- [Kaspersky VPN Secure Connection](https://www.kaspersky.com/vpn-secure-connection)
- [Kaspersky Password Manager](https://www.kaspersky.com/password-manager)
- [All Solutions](https://www.kaspersky.com/home-security)
Device Specific Solutions
- [Android Antivirus](https://www.kaspersky.com/android-antivirus)
- [Mac Antivirus](https://www.kaspersky.com/mac-antivirus)
- [Mobile Security](https://www.kaspersky.com/mobile-security)
- [Windows Antivirus](https://www.kaspersky.com/windows-antivirus)
- [Linux Antivirus](https://www.kaspersky.com/linux-antivirus)
Small & Medium Business
- [Kaspersky Small Office Security](https://www.kaspersky.com/small-business-security/small-office-security)
- [Kaspersky Next EDR Foundations](https://www.kaspersky.com/next-edr-foundations)
- [Kaspersky Next EDR Optimum](https://www.kaspersky.com/next-edr-optimum)
- [Kaspersky Next XDR Optimum](https://www.kaspersky.com/next-xdr-optimum%20)
- [Kaspersky Next MXDR Optimum](https://www.kaspersky.com/next-mxdr-optimum%20)
- [All Products](https://www.kaspersky.com/small-to-medium-business-security)
Enterprise Solutions
- [Kaspersky Next](https://www.kaspersky.com/next)
- [Cybersecurity Services](https://www.kaspersky.com/enterprise-security/cybersecurity-services)
- [Kaspersky MDR](https://www.kaspersky.com/enterprise-security/managed-detection-and-response)
- [Kaspersky Next XDR Expert](https://www.kaspersky.com/enterprise-security/xdr)
- [Kaspersky Threat Intelligence](https://www.kaspersky.com/enterprise-security/threat-intelligence)
- [Hybrid Cloud Security](https://www.kaspersky.com/enterprise-security/cloud-security)
- [All Solutions](https://www.kaspersky.com/enterprise-security)
© 2026 AO Kaspersky Lab
- [Privacy Policy](https://www.kaspersky.com/web-privacy-policy)
- [Anti-Corruption Policy](https://www.kaspersky.com/anti-corruption-policy)
- [License Agreement B2C](https://www.kaspersky.com/end-user-license-agreement)
- [License Agreement B2B](https://www.kaspersky.com/business/eula)
- [Contact Us](https://www.kaspersky.com/about/contact)
- [About Us](https://www.kaspersky.com/about)
- [Partners](https://www.kaspersky.com/partners)
- [Blog](https://www.kaspersky.com/blog/)
- [Resource Center](https://www.kaspersky.com/resource-center)
- [Press Releases](https://www.kaspersky.com/about/press-releases)
- [Sitemap](https://www.kaspersky.com/sitemap)
- [Careers](https://careers.kaspersky.com/)
- [Unsubscribe from Push Notifications](https://www.kaspersky.com/unsubscribe-from-push-notifications)
Global
Americas
[América Latina](https://latam.kaspersky.com/?ignoreredirects=true)[Brasil](https://www.kaspersky.com.br/?ignoreredirects=true)[United States](https://usa.kaspersky.com/?ignoreredirects=true)[Canada - English](https://www.kaspersky.ca/?ignoreredirects=true)[Canada - Français](https://www.kaspersky.ca/fr?ignoreredirects=true)
Africa
[Afrique Francophone](https://afrique.kaspersky.com/)[Maroc](https://www.kaspersky.ma/)[South Africa](https://www.kaspersky.co.za/?ignoreredirects=true)[Tunisie](https://afrique.kaspersky.com/)
Middle East
[Middle East (English)](https://me-en.kaspersky.com/?ignoreredirects=true)[الشرق الأوسط (Arabic)](https://me.kaspersky.com/?ignoreredirects=true)
Western Europe
[Belgique & Luxembourg](https://www.kaspersky.be/?ignoreredirects=true)[Danmark](https://www.kaspersky.dk/?ignoreredirects=true)[Deutschland & Schweiz](https://www.kaspersky.de/?ignoreredirects=true)[España](https://www.kaspersky.es/?ignoreredirects=true)[France](https://www.kaspersky.fr/?ignoreredirects=true)[Italia & Svizzera](https://www.kaspersky.it/?ignoreredirects=true)[Nederland](https://www.kaspersky.nl/?ignoreredirects=true)[Norge](https://no.kaspersky.com/?ignoreredirects=true)[Österreich](https://www.kaspersky.de/?ignoreredirects=true)[Portugal](https://www.kaspersky.pt/?ignoreredirects=true)[Sverige](https://www.kaspersky.se/?ignoreredirects=true)[Suomi](https://www.kaspersky.fi/?ignoreredirects=true)[United Kingdom](https://www.kaspersky.co.uk/?ignoreredirects=true)
Eastern Europe
[Česká republika](https://www.kaspersky.cz/)[Magyarország](https://hu.kaspersky.com/)[Polska](https://www.kaspersky.com.pl/)[România](https://www.kaspersky.ro/)[Srbija](https://www.kaspersky.rs/)[Türkiye](https://www.kaspersky.com.tr/?ignoreredirects=true)[Ελλάδα (Greece)](https://www.kaspersky.gr/)[България (Bulgaria)](https://bg.kaspersky.com/)[Қазақстан - Русский (Kazakhstan - Russian)](https://www.kaspersky.kz/)[Қазақстан - Қазақша (Kazakhstan - Kazakh)](https://www.kaspersky.kz/kk)[Россия и Белару́сь (Russia & Belarus)](https://www.kaspersky.ru/?ignoreredirects=true)[Україна (Ukraine)](https://ukraine.kaspersky.com/)
Asia & Pacific
[Australia](https://www.kaspersky.com.au/?ignoreredirects=true)[India](https://www.kaspersky.co.in/?ignoreredirects=true)[Indonesia (Bahasa)](https://id.kaspersky.com/?ignoreredirects=true)[Malaysia - English](https://www.kaspersky.my/?ignoreredirects=true)[Malaysia - Bahasa Melayu](https://www.kaspersky.my/ms/?ignoreredirects=true)[New Zealand](https://www.kaspersky.com.au/?ignoreredirects=true)[Việt Nam](https://www.kaspersky.com.vn/)[ไทย (Thailand)](https://www.kaspersky.co.th/)[한국 (Korea)](https://www.kaspersky.co.kr/)[中国 (China)](https://www.kaspersky.com.cn/?ignoreredirects=true)[香港特別行政區 (Hong Kong SAR)](https://www.kaspersky.com.hk/)[台灣 (Taiwan)](https://www.kaspersky.com.tw/)[日本語 (Japan)](https://www.kaspersky.co.jp/)
For all other countries
[Global Website](https://www.kaspersky.com/?ignoreredirects=true)
We use cookies to make your experience of our websites better. By using and further navigating this website you accept this. Detailed information about the use of cookies on this website is available by clicking on [more information](https://www.kaspersky.com/third-party-tracking).
Accept and Close
 |
| Readable Markdown | ## Cryptocurrency – meaning and definition
Cryptocurrency, sometimes called crypto-currency or crypto, is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. Cryptocurrencies don't have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.
## What is cryptocurrency?
Cryptocurrency is a digital payment system that doesn't rely on banks to verify transactions. It’s a peer-to-peer system that can enable anyone anywhere to send and receive payments. Instead of being physical money carried around and exchanged in the real world, cryptocurrency payments exist purely as digital entries to an online database describing specific transactions. When you transfer cryptocurrency funds, the transactions are recorded in a public ledger. Cryptocurrency is stored in digital wallets.
Cryptocurrency received its name because it uses [encryption](https://www.kaspersky.com/resource-center/definitions/encryption) to verify transactions. This means advanced coding is involved in storing and transmitting cryptocurrency data between wallets and to public ledgers. The aim of encryption is to provide security and safety.
The first cryptocurrency was [Bitcoin](https://www.kaspersky.com/resource-center/definitions/what-is-bitcoin), which was founded in 2009 and remains the best known today. Much of the interest in cryptocurrencies is to trade for profit, with speculators at times driving prices skyward.
## How does cryptocurrency work?
Cryptocurrencies run on a distributed public ledger called blockchain, a record of all transactions updated and held by currency holders.
Units of cryptocurrency are created through a process called mining, which involves using computer power to solve complicated mathematical problems that generate coins. Users can also buy the currencies from brokers, then store and spend them using cryptographic wallets.
If you own cryptocurrency, you don’t own anything tangible. What you own is a key that allows you to move a record or a unit of measure from one person to another without a trusted third party.
Although Bitcoin has been around since 2009, cryptocurrencies and applications of blockchain technology are still emerging in financial terms, and more uses are expected in the future. Transactions including bonds, stocks, and other financial assets could eventually be traded using the technology.
## Cryptocurrency examples
There are thousands of cryptocurrencies. Some of the best known include:
**Bitcoin:**
Founded in 2009, Bitcoin was the first cryptocurrency and is still the most commonly traded. The currency was developed by Satoshi Nakamoto – widely believed to be a pseudonym for an individual or group of people whose precise identity remains unknown.
**Ethereum:**
Developed in 2015, Ethereum is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum. It is the most popular cryptocurrency after Bitcoin.
**Litecoin:**
This currency is most similar to bitcoin but has moved more quickly to develop new innovations, including faster payments and processes to allow more transactions.
**Ripple:**
Ripple is a distributed ledger system that was founded in 2012. Ripple can be used to track different kinds of transactions, not just cryptocurrency. The company behind it has worked with various banks and financial institutions.
Non-Bitcoin cryptocurrencies are collectively known as “altcoins” to distinguish them from the original.
## How to buy cryptocurrency
You may be wondering how to buy cryptocurrency safely. There are typically three steps involved. These are:
**Step 1: Choosing a platform**
The first step is deciding which platform to use. Generally, you can choose between a traditional broker or dedicated cryptocurrency exchange:
- **Traditional brokers.** These are online brokers who offer ways to buy and sell cryptocurrency, as well as other financial assets like stocks, bonds, and ETFs. These platforms tend to offer lower trading costs but fewer crypto features.
- **Cryptocurrency exchanges.** There are many cryptocurrency exchanges to choose from, each offering different cryptocurrencies, wallet storage, interest-bearing account options, and more. Many exchanges charge asset-based fees.
When comparing different platforms, consider which cryptocurrencies are on offer, what fees they charge, their security features, storage and withdrawal options, and any educational resources.
**Step 2: Funding your account**
Once you have chosen your platform, the next step is to fund your account so you can begin trading. Most crypto exchanges allow users to purchase crypto using fiat (i.e., government-issued) currencies such as the US Dollar, the British Pound, or the Euro using their debit or credit cards – although this varies by platform.
Crypto purchases with credit cards are considered risky, and some exchanges don't support them. Some credit card companies don't allow crypto transactions either. This is because cryptocurrencies are highly volatile, and it is not advisable to risk going into debt — or potentially paying high credit card transaction fees — for certain assets.
Some platforms will also accept ACH transfers and wire transfers. The accepted payment methods and time taken for deposits or withdrawals differ per platform. Equally, the time taken for deposits to clear varies by payment method.
An important factor to consider is fees. These include potential deposit and withdrawal transaction fees plus trading fees. Fees will vary by payment method and platform, which is something to research at the outset.
**Step 3: Placing an order**
You can place an order via your broker's or exchange's web or mobile platform. If you are planning to buy cryptocurrencies, you can do so by selecting "buy," choosing the order type, entering the amount of cryptocurrencies you want to purchase, and confirming the order. The same process applies to "sell" orders.
**There are also other ways to invest in crypto.** These include payment services like PayPal, Cash App, and Venmo, which allow users to buy, sell, or hold cryptocurrencies. In addition, there are the following investment vehicles:
- **Bitcoin trusts:** You can buy shares of Bitcoin trusts with a regular brokerage account. These vehicles give retail investors exposure to crypto through the stock market.
- **Bitcoin mutual funds:** There are Bitcoin ETFs and Bitcoin mutual funds to choose from.
- **Blockchain stocks or ETFs:** You can also indirectly invest in crypto through blockchain companies that specialize in the technology behind crypto and crypto transactions. Alternatively, you can buy stocks or ETFs of companies that use blockchain technology.
The best option for you will depend on your investment goals and risk appetite.
## How to store cryptocurrency
Once you have purchased cryptocurrency, you need to store it safely to protect it from hacks or theft. Usually, cryptocurrency is stored in crypto wallets, which are physical devices or online software used to store the private keys to your cryptocurrencies securely. Some exchanges provide wallet services, making it easy for you to store directly through the platform. However, not all exchanges or brokers automatically provide wallet services for you.
There are different wallet providers to choose from. The terms “hot wallet” and “cold wallet” are used:
- **Hot wallet storage:** "hot wallets" refer to crypto storage that uses online software to protect the private keys to your assets.
- **Cold wallet storage:** Unlike hot wallets, cold wallets (also known as hardware wallets) rely on offline electronic devices to securely store your private keys.
Typically, cold wallets tend to charge fees, while hot wallets don't.
## What can you buy with cryptocurrency?
When it was first launched, Bitcoin was intended to be a medium for daily transactions, making it possible to buy everything from a cup of coffee to a computer or even big-ticket items like real estate. That hasn’t quite materialized and, while the number of institutions accepting cryptocurrencies is growing, large transactions involving it are rare. Even so, it is possible to buy a wide variety of products from e-commerce websites using crypto. Here are some examples:
**Technology and e-commerce sites:**
Several companies that sell tech products accept crypto on their websites, such as newegg.com, AT\&T, and Microsoft. Overstock, an e-commerce platform, was among the first sites to accept Bitcoin. Shopify, Rakuten, and Home Depot also accept it.
**Luxury goods:**
Some luxury retailers accept crypto as a form of payment. For example, online luxury retailer Bitdials offers Rolex, Patek Philippe, and other high-end watches in return for Bitcoin.
**Cars:**
Some car dealers – from mass-market brands to high-end luxury dealers – already accept cryptocurrency as payment.
**Insurance:**
In April 2021, Swiss insurer [AXA announced that it had begun accepting Bitcoin as a mode of payment](https://www.axa.ch/en/ueber-axa/blog/trend/bitcoin-cryptocurrency%20.html) for all its lines of insurance except life insurance (due to regulatory issues). Premier Shield Insurance, which sells home and auto insurance policies in the US, also accepts Bitcoin for premium payments.
If you want to spend cryptocurrency at a retailer that doesn’t accept it directly, you can use a cryptocurrency debit card, such as BitPay in the US.
### Stay Safe While Exploring Cryptocurrency
Kaspersky Premium protects you from phishing sites and crypto scams. Secure your investments with real-time threat detection.
[Try Premium for Free](https://www.kaspersky.com/downloads/premium-free-trial?icid=rc-text-banner-premium-free&utm_source=rc&utm_medium=seo&utm_campaign=text-banner&utm_term=premium)
## Cryptocurrency fraud and cryptocurrency scams
Unfortunately, cryptocurrency crime is on the rise. Cryptocurrency scams include:
**Fake websites:** Bogus sites which feature fake testimonials and crypto jargon promising massive, guaranteed returns, provided you keep investing.
**Virtual Ponzi schemes:** Cryptocurrency criminals promote non-existent opportunities to invest in digital currencies and create the illusion of huge returns by paying off old investors with new investors’ money. One scam operation, BitClub Network, raised more than \$700 million before its perpetrators [were indicted in December 2019](https://www.justice.gov/usao-nj/page/file/1224881/download).
**"Celebrity" endorsements:** Scammers pose online as billionaires or well-known names who promise to multiply your investment in a virtual currency but instead steal what you send. They may also use messaging apps or chat rooms to start rumours that a famous businessperson is backing a specific cryptocurrency. Once they have encouraged investors to buy and driven up the price, the scammers sell their stake, and the currency reduces in value.
**Romance scams:** The FBI warns of a trend in [online dating scams](https://www.kaspersky.com/resource-center/threats/beware-online-dating-scams), where tricksters persuade people they meet on dating apps or social media to invest or trade in virtual currencies. The FBI’s Internet Crime Complaint Centre fielded more than 1,800 reports of crypto-focused romance scams in the first seven months of 2021, with losses reaching \$133 million.
Otherwise, fraudsters may pose as legitimate virtual currency traders or set up bogus exchanges to trick people into giving them money. Another crypto scam involves fraudulent sales pitches for individual retirement accounts in cryptocurrencies. Then there is straightforward cryptocurrency hacking, where criminals break into the digital wallets where people store their virtual currency to steal it.
[](https://www.kaspersky.com/premium)
## Is cryptocurrency safe?
Cryptocurrencies are usually built using blockchain technology. Blockchain describes the way transactions are recorded into "blocks" and time stamped. It's a fairly complex, technical process, but the result is a digital ledger of cryptocurrency transactions that's hard for hackers to tamper with.
In addition, transactions require a two-factor authentication process. For instance, you might be asked to enter a username and password to start a transaction. Then, you might have to enter an authentication code sent via text to your personal cell phone.
While securities are in place, that does not mean cryptocurrencies are un-hackable. Several high-dollar hacks have cost cryptocurrency start-ups heavily. Hackers hit Coincheck to the tune of \$534 million and BitGrail for \$195 million, making them [two of the biggest cryptocurrency hacks of 2018](https://www.investopedia.com/news/largest-cryptocurrency-hacks-so-far-year/).
Unlike government-backed money, the value of virtual currencies is driven entirely by supply and demand. This can create wild swings that produce significant gains for investors or big losses. And cryptocurrency investments are subject to far less regulatory protection than traditional financial products like stocks, bonds, and mutual funds.
## Four tips to invest in cryptocurrency safely
According to Consumer Reports, all investments carry risk, but some experts consider cryptocurrency to be one of the riskier investment choices out there. If you are planning to invest in cryptocurrencies, these tips can help you make educated choices.
**Research exchanges:**
Before you invest, learn about cryptocurrency exchanges. It’s estimated that there are over 500 exchanges to choose from. Do your research, read reviews, and talk with more experienced investors before moving forward.
**Know how to store your digital currency:**
If you buy cryptocurrency, you have to store it. You can keep it on an exchange or in a digital wallet. While there are different kinds of wallets, each has its benefits, technical requirements, and security. As with exchanges, you should investigate your storage choices before investing.
**Diversify your investments:**
Diversification is key to any good investment strategy, and this holds true when you are investing in cryptocurrency. Don't put all your money in Bitcoin, for example, just because that's the name you know. There are thousands of options, and it's better to spread your investment across several currencies.
**Prepare for volatility:**
The cryptocurrency market is highly volatile, so be prepared for ups and downs. You will see dramatic swings in prices. If your investment portfolio or mental wellbeing can't handle that, cryptocurrency might not be a wise choice for you.
Cryptocurrency is all the rage right now, but remember, it is still in its relative infancy and is considered highly speculative. Investing in something new comes with challenges, so be prepared. If you plan to participate, do your research, and invest conservatively to start.
One of the best ways you can stay safe online is by using a comprehensive antivirus. [Kaspersky Internet Security](https://www.kaspersky.com/internet-security/) defends you from malware infections, spyware, data theft and protects your online payments using bank-grade encryption.
**Related articles:**
- [What is cryptojacking and how does it work?](https://www.kaspersky.com/resource-center/definitions/what-is-cryptojacking)
- [What is Bitcoin?](https://www.kaspersky.com/resource-center/definitions/what-is-bitcoin)
- [Four common cryptocurrency scams](https://www.kaspersky.com/resource-center/definitions/cryptocurrency-scams)
- [Scam websites and how to avoid them](https://www.kaspersky.com/resource-center/preemptive-safety/scam-websites)
- [How safe are money e-transfers?](https://www.kaspersky.com/resource-center/threats/how-safe-are-money-etransfers) |
| Shard | 180 (laksa) |
| Root Hash | 8981804672672209180 |
| Unparsed URL | com,kaspersky!www,/resource-center/definitions/what-is-cryptocurrency s443 |